Zoning & Land Use | Woodbury Data Centers

Overview

Woodbury's zoning code does not formally define "data center" or "computing facility" as a permitted use. As a result, facilities at 401 and 500 Bielenberg operate under outdated "office" classifications, despite being purpose-built data centers with 15 MW and 6 MW of operational capacity.

Key Issue: This regulatory gap allows 100 MW of planned expansion (66 MW + 34 MW) to proceed without public hearing, environmental review, or formal use determination.

Zoning Classification & Permitted Uses

401 Bielenberg Drive

Zoning District: B-1 Office Park

Permitted Uses (per Woodbury Code Chapter 24): Office, office support services, professional services, light industrial (subject to restrictions)

Facility Classification	Status	Zoning Permit Required?
"Data center" (explicit)	NOT DEFINED	Unknown
"Computing facility"	NOT DEFINED	Unknown
"Office" (de facto classification)	OPERATING UNDER	No (office is permitted)
"Light industrial"	Potentially applicable	Subject to restrictions

Gap: No formal use classification document on file. Facility operates under "office" permit despite being 85,000 SF purpose-built data center with no traditional office occupants.

500 Bielenberg Drive (Lot 4)

Zoning District: B-1 Office Park (multi-lot complex)

Permitted Uses: Office, office support services, retail, mixed-use, entertainment (Topgolf/Main Event on other lots)

Facility Classification	Status	Zoning Permit Required?
"Data center" (explicit)	NOT DEFINED	Unknown
"Computing facility"	NOT DEFINED	Unknown
"Office" (de facto classification)	OPERATING UNDER	No (office is permitted)
"Mixed use"	Used by city for Met Council filing	Possible

Gap: City filed "mixed use building to replace office" determination with Met Council (Jan 2025) to avoid stormwater charges—but this was for administrative/tax purposes, not a formal zoning use determination.

The "Principal Use" Loophole (Eagan Lesson)

What Eagan Discovered

In Eagan's case, the applicant claimed the data center was "mostly office" because only 46% of floor area was data hall. The office wings (mostly vacant) counted toward "principal use," creating a loophole to avoid data center regulation.

Eagan's Solution: City adopted this language:

"A computing facility is the principal use of a building, and this exclusion does not apply, if no other lawful use actively occupies a majority of the building's floor area."

How This Applies to Woodbury

Facility	Data Hall (SF)	Office Space (SF)	% Data Hall	Principal Use?
401 Bielenberg	~85,000*	Minimal/none	~100%	YES (data center)
500 Bielenberg (Lot 4)	~30,000–40,000*	~250,000–260,000 (mostly vacant)	~12–14%	UNCLEAR (could claim "mixed use")

* Estimates: Actual square footage not publicly disclosed. Eagan's case shows data hall typically occupies 40–50% of building area. 500 Bielenberg's 290,000 SF building suggests 30–40k SF data hall, leaving 250k+ SF of office space. Under Woodbury's current code, this could be claimed as "mixed use office" rather than "principal use data center."

Finding: 500 Bielenberg could exploit the same loophole Eagan found if Woodbury's interim ordinance does not adopt Eagan's "actively occupies" language. Large vacant office space should not count toward "principal use."

Conditional Use Permits & Public Hearing Requirements

Current Woodbury Code (Chapter 24)

Certain land uses require Conditional Use Permits (CUPs), which trigger Planning Commission and City Council review + public hearing.

Use Category	B-1 Office Park Zoning	Public Hearing Required?
Office (standard)	Permitted	No
Data center / Computing facility	NOT DEFINED	UNKNOWN
"Public infrastructure use" (large volume)	May require CUP	Possibly
Heavy industrial	Not permitted in B-1	N/A

Gap: Because "data center" is not defined in Woodbury Code, there is no CUP requirement. No public hearing was held for 401 or 500. Expansion to 66 MW + 34 MW will require no additional public process under current code.

Expansion & Capacity Increase (No Zoning Review Required)

Under current code, expansion from operating capacity to marketed capacity requires no zoning change or use review because the use is already classified as permitted "office."

401 Bielenberg: 15 MW → 66 MW (340% expansion)

Current: 15 MW operational, classified as "office"
Expansion to: 66 MW marketed
Zoning review required? NO — same use category
Public hearing required? NO — no CUP needed
Permits required? Mechanical and building permits only (design capacity tied to "repairs" exemption)

500 Bielenberg: 6 MW → 34 MW (467% expansion)

Current: 6 MW operational, classified as "office" or "mixed use"
Expansion to: 34 MW marketed
Zoning review required? NO — same use category
Public hearing required? NO — no CUP needed
Permits required? Mechanical and building permits only

Finding: 100 MW of planned expansion can proceed without city council review, environmental impact analysis, or public hearing under current zoning code. This is the regulatory gap the interim ordinance aims to close.

Interim Ordinance Study Recommendation

The interim ordinance (approved Sept 23, 2026) should include:

"(1) Define 'computing facility' and 'data center' in Woodbury Code Chapter 24 with clear capacity thresholds. (2) Establish CUP requirement for new data centers ≥ 20 MW and expansions ≥ 9 MW. (3) Close the principal-use loophole: 'A computing facility is the principal use if no other lawful use actively occupies a majority of the building's floor area.' (4) Require continuous disclosure of expansion plans and equipment specifications. (5) Apply vested-rights clarification: 'Facilities lawfully operating on effective date may continue at existing capacity; expansion requires CUP review.'"

What This Means

15 MW at 401 can continue; 66 MW expansion requires city review
6 MW at 500 can continue; 34 MW expansion requires city review
Public hearing and Planning Commission review before approval
Noise, water, air, and tax impacts must be studied
City Council has veto power over expansion

Key Questions for City Council

1. Use Definition: Woodbury Code Chapter 24 does not define "data center" or "computing facility." Why are these uses permitted under "office" classification? When will a formal definition be adopted?

2. Principal Use Loophole: Does Woodbury's code include language clarifying that "actively occupied" office space (not vacant) counts toward principal use? If not, 500 Bielenberg could claim "mixed use office" and avoid data center regulation.

3. CUP Requirement: Will the interim ordinance require Conditional Use Permit review for data center expansion ≥ 9 MW? If yes, will 401 (15 MW → 66 MW) and 500 (6 MW → 34 MW) be subject to this review?

4. Vested Rights: The ordinance should allow 401 and 500 to continue at their current capacity (15 MW + 6 MW) but require CUP review for expansion. Has this vested-rights language been drafted?

5. Expansion Timeline: Both facilities plan major buildout in 2026–2027. Will expansion applications be paused pending interim ordinance adoption and study completion (by ~March 2027)?

Comparison: Eagan's Zoning Response

Issue	Eagan (2026)	Woodbury (2026)
Data center use defined?	Yes (RD zoning, office-to-data conversion triggered use review)	NO — defined as "office"
Principal use loophole closed?	YES (adopted "actively occupies" language)	NO
CUP required for large data centers?	YES (20 MW+)	NO (not defined as separate use)
Expansion permitting?	YES (≥9 MW expansion requires review)	NO (same use category)
Public hearing required?	YES (CUP hearing)	NO
Interim ordinance adopted?	YES (Feb 2026, denial came May 2026)	YES (Sept 2026, study ongoing)

Sources & References

Woodbury Code Chapter 24 — Zoning Ordinance (define uses, permitted zoning districts)

Eagan Capital LLC v. City of Eagan — Findings of Fact (May 19, 2026); "principal use" analysis

Eagan Interim Ordinance — Data center definition, CUP requirements, moratoriium scope

Woodbury Interim Ordinance — Approved September 23, 2026; study scope (TBD)

Planning Department Confirmation — Eric Searles email (Sept 16, 2026): no pending data center applications, city can deny use under proactive ordinance