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HERMANTOWN — The Duluth Area Chamber of Commerce has formally endorsed Google’s proposed massive data center in Hermantown, throwing the region’s largest business organization behind a project projected to inject hundreds of millions of dollars into the northeastern Minnesota economy but facing organized opposition over energy use, tax incentives, environmental effects and the secrecy surrounding its early development.
The Chamber’s Board of Directors adopted a resolution supporting the project, saying Google’s investment could strengthen the regional tax base, expand technology and electrical infrastructure, create construction and permanent jobs and position the Duluth area for additional technology-based development.
The endorsement comes at a significant point for a project that has undergone months of environmental review and public scrutiny and recently was scaled back by Google in response to community concerns.
“We believe the proposed Hermantown Data Center represents a significant investment not only in technology and economic development, but in the infrastructure and community assets that will support future growth,” said Pat deGrood, chair of the Board of Directors at the Duluth Area Chamber of Commerce and vice president of commercial services, The Jamar Company. “As a regional business organization, we have a responsibility to advocate for opportunities that strengthen our economy and create the conditions for businesses and communities to thrive.”
An economic analysis cited in the Chamber resolution estimates Google’s investment in St. Louis County could support about 1,100 jobs annually and add an average of $136 million a year to regional gross domestic product from 2026 through 2029.
Those figures largely reflect the broader economic activity generated as the enormous campus is developed, including construction jobs, purchases from contractors and suppliers, employee spending and other indirect economic activity. Permanent employment at the completed center would be considerably smaller.
Earlier proposed development agreements projected about 100 permanent jobs paying at least $75,000 annually. The first phase alone was estimated at about $650 million, and the project could eventually represent investment reaching into the billions of dollars if fully developed.
That would make the project unlike virtually anything Hermantown has previously developed.
The city has called it the largest proposed project in Hermantown history. The site is in the southwestern portion of the city near Midway Road and U.S. Highway 2 and adjacent to Minnesota Power’s Arrowhead Substation, a major regional transmission hub connected to wind, solar and hydroelectric resources.
Google originally proposed a roughly 1.8 million-square-foot campus with four data center buildings. In August, after months of public hearings, environmental review and opposition, the company announced revisions reducing the campus to about 1.66 million square feet and three primary data center buildings. Google said the redesigned project would disturb less land and fewer wetlands and reduce anticipated noise. Its expected electrical demand is now estimated at between 300 and 600 megawatts, still making it an extraordinarily large consumer of electricity.
The project’s economic impact extends far beyond the buildings themselves.
Google has proposed investing about $130 million in public infrastructure, including roads and extensions or improvements to water and sewer systems needed to serve the development. The infrastructure would also create capacity that city and economic-development officials say could support other commercial and industrial development in the area.
Earlier proposed agreements also called for roughly $42 million in payments to Hermantown Community Schools over 28 years and $4.5 million directly to the city over 20 years. Even with proposed property-tax abatements, Google was projected to become Hermantown’s largest commercial property taxpayer, paying about $450,000 annually — more than several of the city’s major big-box retailers combined.
For a city with about 10,000 residents and a general fund measured in the tens of millions rather than hundreds of millions of dollars, the scale of the investment is difficult to overstate.
Supporters also argue the benefits could spread well outside Hermantown.
A multiyear construction project of this size would create work for building trades, engineering firms, trucking companies, equipment suppliers and other contractors. Employees and contractors would spend money at hotels, restaurants, retailers and service businesses throughout Duluth, Hermantown and surrounding communities. A major Google presence could also improve the region’s profile when economic-development officials recruit other technology, energy and advanced-industry employers.
The Chamber said those secondary benefits are among the reasons it views the proposal as a regional economic-development project rather than simply a Hermantown development.
The project has not, however, followed an easy path.
City and county officials and Minnesota Power had discussions about what was initially known publicly only as a potential industrial development before residents were told that a massive data center was being planned. Public records later revealed that officials had been discussing the project with developer Mortenson beginning in 2024 and that nondisclosure agreements were used during the preliminary stages.
The data center eventually became known as “Project Loon.”
Public opposition intensified in the fall of 2025 as more details emerged. Residents organized the Stop the Hermantown Data Center group, packed public meetings, placed opposition signs throughout the area and raised concerns about the project’s scale, electricity demand, potential noise and light pollution, effects on wetlands and the rural character of southwestern Hermantown.
For many opponents, the process itself became as important as the environmental questions.
Critics argued residents should have been informed earlier and questioned why public officials entered nondisclosure agreements while a project capable of reshaping a large portion of the community was being explored. Similar concerns over secrecy surrounding data-center developments have surfaced in communities across Minnesota and the country.
The controversy also moved into court.
The Minnesota Center for Environmental Advocacy and opponents challenged the adequacy of the original environmental review, and another lawsuit alleged that Hermantown improperly changed land-use and zoning plans to accommodate the project. The Stop the Hermantown Data Center group has argued the site is inappropriate for a hyperscale industrial development and that city officials failed to provide sufficient transparency during the planning process.
The city paused consideration of permits in October 2025 after an Environmental Quality Board petition sought additional environmental review. Mortenson withdrew upcoming applications from city agendas in November to allow additional public engagement. In March, after Google publicly confirmed that it was the company behind the proposed campus, Hermantown and Google restarted the Alternative Urban Areawide Review process using a smaller study area and more detailed information about the actual project.
The city has since conducted additional public comment periods, environmental analysis and work sessions. Google held another public open house in August and subsequently presented its scaled-down design.
Energy has remained one of the most significant issues.
A data center drawing between 300 and 600 megawatts represents an industrial electrical load unlike almost anything currently operating in northeastern Minnesota.
Under the proposed electric service arrangement with Minnesota Power, however, Google would be responsible for the costs associated with the infrastructure necessary to serve the facility. Minnesota Power has said the agreement is structured to protect existing customers from having to subsidize Google’s enormous energy requirements.
The agreement is also tied to one of the largest proposed additions of renewable generation and energy storage to the Minnesota Power system.
Plans call for 300 megawatts of additional wind generation and 400 megawatts of battery storage. Google and Minnesota Power also plan to explore demand-response measures that could reduce the center’s load during periods when the regional electric system is under stress.
Google has additionally committed $5 million to energy-affordability and efficiency programs serving low- and moderate-income Minnesota Power customers.
The Chamber said those commitments were important to its decision to endorse the project.
“Energy and environmental considerations are appropriately part of the conversation around a project of this size, and we believe those issues deserve careful and continued attention,” said Jim Roche, interim president of the Duluth Area Chamber of Commerce. “At the same time, Google has already demonstrated a willingness to listen and respond to local concerns, including modifying the project’s design to better align with feedback from the community. The commitments associated with this project—including new renewable energy generation, battery storage, energy-efficiency investments, and infrastructure improvements—also demonstrate that these concerns are being addressed as part of the broader development. We support continued collaboration and transparency among Google, Minnesota Power, the City of Hermantown, and the community as the project moves forward.”
Water use has been another major concern, particularly in a region where residents have questioned whether enormous data centers could place new demands on Lake Superior and local water systems.
Google has said the Hermantown project would rely on advanced air-cooling technology rather than the water-intensive cooling systems used by some large data centers. Water would still be needed for ordinary domestic uses at the campus, but not as the primary method of cooling the thousands of computer servers expected to operate there.
The debate now presents Hermantown and the broader Duluth region with two competing views of the same development.
Opponents see an extraordinarily large industrial complex being inserted into an area valued for its rural character, with potentially enormous energy requirements, substantial public policy implications and a planning process they argue was unnecessarily secretive.
Supporters see a rare opportunity to land one of the world’s largest technology companies, diversify a regional economy historically dependent on mining, health care, tourism and traditional industries, add millions of dollars to the tax base and schools, modernize public infrastructure and bring hundreds of millions — potentially billions — of dollars of private investment to northeastern Minnesota.
The Chamber has now placed the region’s organized business community firmly on the latter side of that debate.
Its resolution does not call for environmental scrutiny or public involvement to end. Instead, it urges Google, Minnesota Power, Hermantown and other regional stakeholders to continue working through those issues while preserving what the organization considers an unusually large economic opportunity.
For northeastern Minnesota, the stakes extend beyond whether three large data center buildings ultimately rise in southwestern Hermantown.
The larger question is whether Google’s arrival could help establish the region as a destination for a new generation of technology and energy investment — and whether the economic benefits can be delivered while addressing the environmental, energy and community concerns that have made the project one of the most intensely debated developments in recent Northland history.
