Google is quietly upping its offer in Hermantown, dangling cash and city-ready infrastructure in a bid to lock in a sprawling data-center campus near Duluth. The proposal would turn a big chunk of rural land into a multi-phase server hub, and it has already sparked protests, lawsuits and a bruising public review.
A draft development agreement reviewed by St. Cloud Live says the developer would build water, sewer and road infrastructure to Hermantown specifications and then hand those systems over to the city. The same draft spells out near-term payments and long-term tax terms: about $150,000 in year one, an estimated $4.5 million in lifetime payments to the city, and an upfront $850,000 payment to Independent School District 700, with the district projected to receive about $40 million over 28 years. The document reportedly pegs the present value of the tax abatement at about $33.5 million and includes proportional clawbacks if job targets are not met, according to the reporting.
As outlined in the City of Hermantown’s updated AUAR scoping document, officials are weighing a development scenario of up to 1.8 million square feet across a roughly 278-acre study area. The concept includes four 300,000-square-foot server buildings plus offices, warehouse space, utility pads and parking, with buildout potentially phased over eight to ten years. The city opened a 30-day comment period on March 31 that runs through April 30, 2026.
Energy pledge: wind, batteries and a $5 million fund
Minnesota Power says it has reached an electric service agreement with Google that would support roughly 700 megawatts of new clean resources, including about 300 MW of wind and 400 MW of battery storage. Under the arrangement, Google would also contribute $5 million to energy-affordability and efficiency programs for low- and moderate-income customers. In a press release, the utility said Google will pay for the required grid connections and that the ESA will be filed with the Minnesota Public Utilities Commission for public review. The utility is pitching the deal as a way to expand renewables without raising rates for existing customers.
Hermantown officials have been blunt about the tradeoffs. City Administrator John Mulder told St. Cloud Live, “what’s really happening here is: the taxes that they’re paying are being paid to us, and we’re paying them back for the infrastructure they’re giving to us.” Local business leaders and the Hermantown Area Chamber have backed that economic-development framing, while residents and organized opponents argue the planning process has lacked transparency, according to local reporting and TV coverage.
Legal fight and public comment
Environmental groups and local activists are not convinced. The Minnesota Center for Environmental Advocacy is among the organizations that have sued Hermantown, arguing the city’s earlier review did not adequately assess water, wetlands and other environmental impacts, as reported by the Star Tribune. Local coverage has also followed a volunteer group called Stop the Hermantown Data Center and a series of citizen complaints pushing for a deeper analysis of potential harms. The updated AUAR scoping document is now the main vehicle for that review, and the city is accepting comments through April 30, 2026, according to the municipal filing.
What comes next
The electric service agreement still has to clear state regulators. Minnesota Power says it will submit the ESA to the Public Utilities Commission for regulatory consideration, a public process that must play out before any long-term service changes can take effect. After the AUAR comment period closes, the city will finalize its review and any recommended mitigation measures. Permitting and construction would follow only after those steps are complete and any legal challenges are resolved.
For now, Google’s package of city-spec infrastructure, upfront payments and conditional tax relief has not settled the fight. Supporters highlight new revenue, jobs and grid investments. Opponents counter that the size of the land conversion, potential impacts on water and wildlife, and the use of tax abatements all demand a much closer look before any shovel hits the ground, local outlets report.
