Sioux Falls is setting up a new Regulatory Oversight Committee to study potential rules and zoning for data centers within city limits.
The municipal move comes as communities nationwide grapple with the rapid expansion of facilities housing heavy IT infrastructure and artificial intelligence workloads.
At last report, seven of South Dakota’s 11 data centers are located in the immediate Sioux Falls area. Proponents argue that the specialized buildings create jobs and support digital infrastructure, while opponents raise concerns over water and electricity consumption.
The newly formed Regulatory Oversight Committee will review existing laws, gather public feedback, and draft recommendations for the full Sioux Falls City Council. The group consists of Councilors Sara Pankonin, James Oppenheimer, Ryan Spellerberg, and Rich Merkouris.
“Residents are asking us to hear their concerns about hyperscale data centers and consider them in decision making,” Councilor Sara Pankonin said.
The committee is examining various types of facilities, including modular, large-scale, and hyperscale operations. Local discussions have intensified following proposals such as the Gemini Data Center, a 500-megawatt facility that has prompted calls from a local coalition for a temporary moratorium on new data center construction within city limits.
The city scheduled several public hearings at Carnegie Town Hall, located at 235 W. 10th St., to allow residents and business stakeholders to offer input. Sessions took place on Monday, Nov. 9, and Monday, Nov. 30, with an additional meeting set for Monday, Jan. 4, 2027, at 6:00 PM. In addition, the Sioux Falls City Council and the Lincoln County Commission held a joint meeting on Tuesday, Oct. 27, to address regional concerns.
Stakeholders wishing to submit proposed ordinance language or supporting materials faced a deadline of Friday, Nov. 27, 2026. Council leaders emphasized that establishing clear timelines provides certainty for residents and predictability for the tech industry.
The committee is expected to deliver its final report and ordinance recommendations to the City Council no later than Tuesday, Jan. 12, 2027.
