Three of the country’s busiest data center builders say local opposition and new state restrictions aren’t slowing work that’s already under construction. They’re slowing everything before it.
That’s the picture from interviews with executives at JE Dunn Construction, HITT Contracting and Mortenson, published by Construction Dive on Oct. 5. HITT CEO Kim Roy was the bluntest. Asked whether community pushback is affecting schedules, she said it “doesn’t affect our build schedule.”
She’s almost certainly right. It’s also not where the risk is.
Data center opposition has moved the risk into preconstruction
Chris Teddy, JE Dunn’s national director of mission critical, told the publication that scrutiny over power, water, land use and community impact doesn’t necessarily stop projects but can stretch timelines and add complexity during planning and entitlement. Clients, he said, are getting more deliberate about site selection and are weighing how receptive a jurisdiction is before they commit.
Then the part contractors should underline. General contractors, Teddy said, “thrive on predictability.” When permitting requirements keep changing or approvals slide, it gets harder to manage labor and lock in subcontractor commitments.
That is the exposure. A builder holding a mission-critical team, a prefab slot and an electrical subcontractor for a campus whose start date has become a moving target is carrying cost with no contract clock running. Nothing in the field is delayed, because nothing is in the field. The damage shows up in idle crew time and in the favors owed to subs who held crews for a start that slipped.
State data center rules in Virginia, Pennsylvania and Texas
The policy backdrop has shifted quickly. Construction Dive’s account lists three state actions since August:
- Virginia: a September executive order bars projects with expected peak demand of 25 megawatts or more from state help such as expedited permitting, and directs agencies to address noise, emissions, water and electricity demand.
- Pennsylvania: an August executive order on energy affordability and environmental protection gives local communities a larger role in the development process.
- Texas: the governor directed the state’s environmental regulator to pause data center permits pending a grid operator audit.
We weren’t able to read the Texas directive at its source, so that item rests on the publication’s reporting. California went a similar direction last month, when it began requiring a water supply assessment before a data center can permit.
None of this has dented the spending line. Census data show data center construction spending rose 7.5% in August from July and stood 73% above a year earlier, according to the same outlet. In ABC’s last backlog survey, one contractor in six was working on a data center.
What mission-critical contractors are being asked to do before the build
Mortenson senior vice president Greg Werner described a preconstruction phase that now includes fielding community questions alongside the usual buildout planning. His line: the best time to address local concerns is “before they become project constraints.” He pointed to closed-loop cooling as the answer on water, and said power planning should show how customers are paying for new generation and grid upgrades instead of simply adding load.
Roy made the transparency argument, saying the industry needs to put out accurate information on current cooling technology and on tax benefits.
Notice what’s happened to the scope. Contractors are now expected to help carry an owner’s entitlement case: the water story, the noise story, the jobs story. That’s work, it’s largely unpriced, and it lands before a notice to proceed. Firms with deep preconstruction benches can absorb it. Smaller ones chasing their first hyperscale job will find the cost of pursuit just went up.
The build schedule is fine. The start date is the problem.