FAS Publishes Lancaster Data Center Community Benefit Agreement

The Federation of American Scientists (FAS) reports that it identified eight executed community benefit agreements (CBAs) connected to data center development, while finding only one fully executed agreement publicly posted: the Lancaster AI Hub agreement. Dated November 2025, it is between the City of Lancaster and developers of two data center campuses. FAS’s publication makes the agreement available as a practical example at a time when the growth of AI is accelerating data center proposals and raising questions about how projects affect host communities.

For local governments, data centers can bring construction employment, new tax revenue, and economic development tied to substantial capital investment. They can also create costs and pressures that matter to residents and public agencies: noise for nearby homes, significant water and energy demand, possible effects on utility rates and the energy grid, and concerns that tax incentives could exceed the financial benefits a community receives. These competing interests make negotiated commitments and the public’s ability to scrutinize them important considerations for project planning and local decision-making.

FAS describes two primary local policy levers. An ordinance can address zoning, land use, and permitting, establish allowable activities and limitations, and include a public comment period; it applies to projects that meet the relevant definition of a data center. A CBA, by contrast, uses contract law to set binding expectations between two or more parties and may be useful where existing zoning or permitting rules do not specifically address data centers. CBAs are negotiated case by case, however, and may offer fewer opportunities for public comment. Their terms can therefore have direct procurement and economic-development implications for governments, developers, and contractors involved in large-scale facilities.

The limited public availability of executed agreements is itself a governance and market-planning issue. FAS says negotiations often occur behind closed doors and may be protected by nondisclosure agreements, leaving community members with fewer opportunities to influence project terms. Procurement and economic-development teams can use the Lancaster agreement to inform negotiations and review FAS’s CBA template and analysis of local ordinance trends. For industry teams, the practical takeaway is to account for community-benefit commitments alongside financing, environmental impacts, transparency, accountability, and other project obligations—not as an afterthought once development plans are advanced.

• FAS identified eight executed data center CBAs but found only the Lancaster agreement fully executed and publicly posted.
• The Lancaster AI Hub agreement, dated November 2025, covers two data center campuses and involves the City of Lancaster and the campuses’ developers.
• CBA topics include taxes and financing, environmental impacts, transparency, accountability, and project obligations.
• Potential community benefits include construction jobs, tax revenue, and economic development; potential burdens include noise, water and energy use, grid impacts, and utility-rate pressures.
• Local governments can use ordinances for broadly applicable zoning, land-use, and permitting rules, while CBAs establish negotiated contractual expectations on a case-by-case basis.
• Public-comment opportunities may be more limited in CBA negotiations than in ordinance processes, and negotiations may be shielded by nondisclosure agreements.
• Data center developers, contractors, and government teams should include community commitments in early project, financing, environmental, and local-engagement planning.
• FAS provides a CBA template and analysis of local ordinance trends that procurement and economic-development teams can consult.
• FAS invites local governments to share executed agreements at metrolab@fas.org to expand the public reference base.