The City of Eagan has filed a lawsuit against data center company Eagan Capital LLC, alleging code violations at the company's IronGate Data Center on Pilot Knob Road. At the heart of the dispute are four temporary chillers the city says were installed and run without the required permits, triggering months of noise complaints from nearby residents before officials decided to take the matter to court.
The lawsuit, filed earlier this month, centers on noise, permits and the cooling equipment known as chillers, according to CBS News Minnesota. The city says the four temporary units at 3199 Pilot Knob Road were operating without the required permits and approvals, and it has indicated it plans to seek an injunction to stop their operation, per hometownsource.com. CBS News Minnesota reporter Ashley Grams noted that people are far from chill about the controversy, a line that captures the frustration driving the complaints.
According to the same hometownsource.com account, the trouble traces back to Dec. 26, 2025, when IronGate was issued a mechanical permit covering chilled-water piping. City staff later discovered that servers and a chiller system were being installed that fell outside what that permit actually covered, setting off the chain of violations the city is now suing over.
A Noise Study Backs Up Neighbors' Complaints
The site's own paper trail undercuts the company's position. A noise study commissioned by the applicant itself found that the temporary chillers exceed city and state noise thresholds, and the study recommended installing a noise-mitigation wall, according to an Eagan planning report dated April 22, 2026. The same planning document shows the applicant argued the temporary units were necessary because the building's existing rooftop chillers were failing, with permanent replacements expected within four to six months.
Despite that explanation, the Eagan City Council unanimously denied IronGate's request for a six-month interim-use permit covering the four rooftop chillers, with the council saying the proposed use was not lawful under the property's current zoning. The planning report also notes that city staff separately raised concerns that operating a data center as the property's primary use may not be legal under its Research and Development zoning designation — a concern staff flagged, not a court ruling. The report further indicates that code-violation notices and a criminal citation tied to the chillers stemmed from operation without a permit and from the equipment exceeding noise thresholds.
A Second, Separate Lawsuit Over the City's Moratorium
The code-violation case isn't the only legal fight between the city and the data center industry right now. Eagan Capital separately sued the City of Eagan on June 15 over the city's one-year data-center moratorium, arguing in its complaint that the city lacks the authority to enact a temporary suspension and asking for $50,000 in damages, according to MPR News. Eagan Capital's attorneys contended that the Minnesota Public Utilities Commission has exclusive authority to regulate electricity demand in the state, the complaint read, framing the moratorium as an overreach into territory reserved for state regulators.
The moratorium itself, adopted in February 2026, applies to new data centers within 500 feet of residential homes or those using more than 20 megawatts of electricity, according to the City of Eagan. It's scheduled to stay in effect until Feb. 17, 2027, unless the council ends it sooner, and the city says it was adopted to provide time to research potential impacts before more projects move forward.
How Many Data Centers Does Eagan Actually Have?
Just how built-out Eagan's data center footprint already is depends on who's counting. The city's own materials state that Eagan currently has three approved data center sites — DataBank, Oppidan and Centra — with DataBank, located near Lexington Avenue and Neil Armstrong Boulevard, operating since around 2016. MPR News, however, reported that the city already has two data centers, a discrepancy the available city and news sources don't resolve.
The pressure on Eagan reflects a broader statewide trend. Minnesota currently has 78 data centers, and MPR News reported that tech companies are drawn to the state for its relatively cool climate and its available land, water and electricity — the same resources now at the center of Eagan's disputes with Eagan Capital over noise, permitting and how much authority a city can exert over a fast-growing industry.
