Developer withdraws rezoning request for controversial data center in Hoffman Estates

HOFFMAN ESTATES — After weeks of organizing by concerned neighbors, a developer in Chicago’s northwest suburbs withdrew its request Tuesday to rezone land for a hotly debated data center.

The data center would have sat on the edge of the village of Hoffman Estates’ municipal boundaries, bordering the nearby areas of South Barrington and Barrington Hills. The project raised serious questions about how neighboring towns, which have no official say in decision making, are impacted by large-scale data center developments.

“After several weeks of conversations with the Village and residents, we’ve decided the right step is to withdraw the current rezoning request,” Karis Critical spokesman Patrick Skarr said in an email to Capitol News Illinois. “We heard the feedback clearly, including the call for a more specific plan before any rezoning. We’ll take the time to get that right. Should we bring a proposal forward in the future, the Village and the community will have the details they need to evaluate it fully and on its merits.”

Barrington Hills resident Amanda Pollard drives past Plum Farms three or four times a day. When she saw signs go up announcing public notice for the proposed rezoning, she quickly went online to see what was planned for the rural property. What she saw worried her, and she began rallying her neighbors.

“I knew a bit about data centers, and talked to my neighbors, wrote letters, showed up at the meeting, and then it’s kind of snowballed from there into what it is now,” Pollard said.

When the Hoffman Estates Plan Commission held a public hearing on June 3 to discuss rezoning plans for Plum Farms, residents showed up in droves, packing the three-hour meeting and spilling into the hallway to voice their opposition.

Dozens of residents from Hoffman Estates, South Barrington and Barrington Hills also sent emails urging commissioners to reject the proposal.

The Plan Commission voted 4-2 to recommend against rezoning the land, but the official decision would have been in the hands of the Village Board, which was set to vote on the rezoning at a now-cancelled meeting Monday.

The dispute is reflective of a broader trend, as villages and towns across the state are left to their own devices in data center negotiations after lawmakers failed to pass regulations this spring.

Transparency concerns

When the Plan Commission held its meeting, discussion was limited to the issue of rezoning the site from traditional neighborhood and commercial mixed-use districts to a manufacturing district; residents were told there were no specific site plans for a data center project.

Karen Daulton Lange, a recently retired village administrator in Lake Barrington, is now a coordinator at the Flint Creek & Spring Creek Watersheds Partnership, which submitted a letter to the Plan Commission opposing the rezoning.

“What I found disappointing in Hoffman Estates is that they did not roll this all into one package,” Daulton Lange said. “I personally think it is more transparent, if you’re going to rezone because you have a developer in mind who’s come to your door, that you would make that widely available to the public, and ask for the details, which would be the plans, the environmental studies, the water usage.”

Other residents had concerns about the impacts of a large-scale data center on traffic, noise and light pollution and air quality.

“None of what you’d need to weigh those impacts is in the record,” Barrington Hills residents Michael and Christine Irizarry wrote in an email to board members. “We aren’t against growth. We’re asking you to expect what a decision this size deserves: a real plan, real studies and a use that fits where it’s going. None of that is in front of you.”

Hoffman Estates has two other data centers under construction, but they are in areas already zoned for manufacturing that residents said are more appropriate than the residential area near forest preserves.

“Nobody here is saying, ‘Don’t do a data center,’ everyone’s saying, ‘Don’t do it here,’” Barrington Hills resident Karen Trzaska said.

Seeking answers

Feeling like they weren’t getting the whole story, opposition organizers filed a public records request seeking communications from village staff about the project.

The records they received showed village staff in discussions with Karis about a potential data center project as early as 18 months ago, as first reported by the Daily Herald, including a so-called “comfort letter” signed by Village Manager Eric Palm the day before Karis purchased the 186-acre property for $45 million in January 2025.

Palm told Karis in the letter, “The Village Board recognizes the benefits data centers provide for the community” and pledged that staff would support “necessary zoning and development approvals for a data center project.”

Palm caveated that staff could not guarantee the actions the Village Board would take, but said staff would recommend the project’s approval.

It is normal for village staff — who do not work directly for the board and do not vote —  to work with owners and developers on proposed developments “for months and even years before the projects are presented to the Board,” according to Hoffman Estates Mayor William McLeod. When issues are presented to the Board, Palm and other staff members prepare a memo describing the matter and providing a recommendation to the Board.

But residents were upset to learn that the project, which they were told had no specific plans, seemed to have been discussed in detail by staff for so long before the rezoning request was announced.

“It just seems like we’re doing all this for just for political theater,” Pollard said. “What’s the point of having a public hearing if they don’t hear us? They’ve already made up their mind 18 months ago.”

She filed an Open Meetings Act complaint to the Illinois Attorney General’s office, asking for a review of the board and staff’s behavior.

Pollard pointed to emails between the village’s Economic Development Director Kevin Kramer, also a member of staff, and Karis executives, including CEO Jake Finley and Executive Vice President Greg Strom, which she said show Kramer “coordinating private developer access to the Mayor and trustees outside any public meeting.”

In emails exchanged in late April, Strom asked Kramer whether he and Finley should meet with McLeod and other board members.

“I think it might be a bit early, but let us give an update on Monday to the Mayor about the rezoning and see if he’s hearing from any trustees who might need a refresher meeting before going public with the new zoning district,” Kramer replied.

McLeod said he did not arrange any private meetings with trustees regarding the Karis project and said he believes the Village Board keeps an open mind to all matters that appear on its agenda.

“Just because the staff or the village manager express support for a development that does not mean the village Board will approve the development,” McLeod said.

Statewide trends

Though the proposed data center would have been located in Hoffman Estates, much of the resistance came from residents and leaders of the neighboring Barrington Hills and South Barrington neighborhood.

“Barrington Hills respects Hoffman Estates’ authority to make land-use decisions within its jurisdiction,” Village President Brian Cecola told the Daily Herald. “However, we share the concerns raised by South Barrington, surrounding residents, local businesses and community stakeholders.”

And as data centers grow larger, bringing broader environmental and noise concerns, more areas across the state are grappling with the question: What role do neighboring communities play in making decisions about data centers within another municipality?

“It’s a repeated pattern that we’re seeing where surrounding municipalities are rightfully concerned, and we need to identify a way that they have a formal voice in the process,” said Rep. Nabeela Syed, D-Inverness. “I do think municipalities will be looking for more guidance.”

She pointed to the nearby village of Mundelein, where residents are concerned about the impact of a data center proposed in the adjacent village of Grayslake.

Mundelein would not generate revenue from the Grayslake data center project and only learned of the project “after it was approved, permits issued, and construction started,” according to a post from Mundelein Mayor Robin Meier.

Mundelein asked its attorneys to determine whether it had any legal recourse to challenge the data center. They found it did not.

Karis, also doing business as H.E. Holdings LLC, had recently seen a similar proposal rejected in Naperville in January after months of opposition from residents there.

In the legislature, one proposal on the table is Senate Bill 1050, sponsored by Sen. Darby Hills, R-Barrington Hills, which would prohibit data centers from being placed within 3 miles of the boundaries of another municipality without express written consent.

“We are very concerned about local communities having a meaningful voice before the major industrial developments are approved, so that’s why I introduced this, so that we can make sure that we get some local control,” Hills said.

She said her bill, which also adds public notice requirements, could move during the General Assembly’s veto session, or if the legislature is called back for a special session.

Last month, Gov. JB Pritzker suspended tax incentives for data centers starting July 1 and called on lawmakers to pass new data center reforms during the fall veto session. Since those incentives began in 2019, the state has committed an estimated $666.6 million in tax credits to data center projects, the state’s latest report shows.

Syed also said she is exploring ways to draft legislation to give neighboring communities a seat at the table, as well as ensuring data centers are built with union labor and other energy and water use regulations that were outlined in the POWER Act.

‘We can make a difference’

But as data center conversations continue at the state level, residents in Hoffman Estates have successfully paused data center development at Palm Farms — at least for now.

Pollard said she was “very happy” to learn about the company’s decision to withdraw the request and said it gave her hope for residents’ ability to make their voices heard.

“I can’t imagine that they would pull out without seeing all the community pushback, and it gives me hope that what we do matters,” Pollard said.

“So many people were telling me, ‘It’s going to go through no matter what. These politicians, they don’t listen to us.’ And this shows that we can make a difference, and we do have a say in our community.”

Read More: Here are the Illinois data centers on track for more than $650M in tax credits

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