Everyday functions of modern society rely on data centers, but there are significant resources required to run the facilities, such as power, telecommunications capacity, water, and land. Additionally, the frequent disconnect between developers and local communities can lead to contentious disputes about data center siting. As data center development is continuing to grow across the U.S., host municipalities and community organizers can reap the benefits of such developments and utilize Community Benefit Agreements (CBAs) as a way to ensure that potential impacts from data centers are mitigated, communities and their infrastructure benefit from the developments, and project transparency is ensured.
CBAs are legally binding contracts between developers and host municipalities or communities that can be used as a mechanism to mitigate the local impacts of large infrastructure projects. CBAs can and have been used with respect to all sorts of electric infrastructure projects, from offshore wind farms to fossil fuel infrastructure, and in recent years communities have been applying CBAs to data center development.
CBAs are often tailored to address a community’s specific needs. Common elements of CBAs include community partnerships and educational programs, local infrastructure development, renewable energy investments, training and commitments to leveraging local workforce, and addressing local taxes. However, such agreements are not limited to these things, and communities can get creative in negotiating CBAs to best meet their specific needs and address any unique areas of vulnerability. For example, in Huntsville, Alabama Meta’s CBA addressed a community-specific infrastructure issue, investing in broadband expansion that improved internet access for rural residents. Meta also recently announced a $1 billion commitment to invest in local infrastructure improvements, including roads, water, and wastewater systems, in its community investment plan for its data center in Richland Parish, Louisiana.
In addition to the more tangible investment-based benefits, CBAs can also be used to ensure improved communication between data centers and the host community. For example, CBAs can include transparency requirements and establish communication systems for community feedback. Communication channels can also improve transparency concerning the depletion of resources, like water, and can address the responsibilities the data centers have to correct any harm that could occur as a result of the development, including any disruption to the local grid or electric rate increases.
A recent CBA for a data center in Lancaster, Pennsylvania is a great example of what these agreements can look like for data centers. Some of the benefits in Lancaster’s 2025 CBA include an upfront contribution of $10 million to the City’s Sustainable Development and Clean Energy Fund, a commitment to use clean energy, a local hiring plan, and a number of construction and performance commitments such as a noise mitigation plan, water usage plan, and energy usage plan. However, while the Lancaster CBA includes extensive community benefits, some community members would have preferred more community participation during the CBA negotiation process.
As data center development continues to accelerate, CBAs can serve as an important tool for fostering collaborative relationships and ensuring that host communities share in the economic and infrastructure benefits these projects can generate.
For more information or assistance, please contact Lisa S. Gast, Peter J. Scanlon, and R. Keith Gordon.
Article By DWGP Summer Associate Juliette Gaggini – The George Washington University Law School, May 2027
