Cave City Mayor Dwayne Hatcher speaks at the May 11 meeting where the data center moratorium was first discussed. Gage Wilson/For Glasgow News 1
By GAGE WILSON
For Glasgow News 1
A lawsuit filed Monday in Barren Circuit Court is the latest development in Cave City’s ongoing debate over data center development.
Kentucky Industrial Alliance LLC has filed suit against the City of Cave City, the Cave City Council and the Joint City-County Planning Commission of Barren County, challenging the city’s recently adopted 12-month moratorium on data centers and asking a judge to require local officials to consider a proposed development plan submitted before the moratorium took effect.
The lawsuit follows weeks of public discussion and opposition surrounding potential data center projects in Cave City.
Residents repeatedly filled council chambers during meetings in May to voice concerns about the facilities, citing questions about infrastructure demands, utility usage and the long-term impact such developments could have on the community as well as the larger Mammoth Cave area.
Council members ultimately approved the moratorium following special-called meetings May 18 and May 20, arguing the temporary pause would provide time to study the issue, gather public input and determine whether additional regulations were necessary.
The proposed development includes property within the former Branstetter Farm area, which was annexed into Cave City last year for future industrial and commercial development.
According to the complaint, Kentucky Industrial Alliance submitted its development plan to the Joint City-County Planning Commission on May 11. The company argues the proposal should be reviewed under the zoning regulations that existed at the time the application was filed.
The filing outlines months of discussion between city officials and planning authorities regarding how data centers should be regulated.
According to the complaint, Cave City’s zoning ordinance did not specifically address data centers. Earlier this year, the Joint City-County Planning Commission began reviewing amendments that would formally define and regulate such facilities.
One proposal would have classified data centers as conditional uses subject to additional review procedures. A second amendment, approved by the planning commission on April 30, would have permitted data centers within I-2 Heavy Industrial districts while imposing requirements related to power generation, cooling systems, setbacks and decommissioning plans.
The lawsuit states Kentucky Industrial Alliance submitted its development plan on May 11, the same day the Cave City Council considered the planning commission’s recommendation.
Rather than adopting the amendment, council members voted 4-1 against the proposal. According to the complaint, Council member Leticia Cline then proposed a one-year moratorium on data center development, which was approved by a 4-1 vote before later receiving first and second readings.
Kentucky Industrial Alliance’s complaint raises several legal challenges to the ordinance.
First, the company argues the city failed to follow procedures required under Kentucky planning and zoning law.
The lawsuit cites KRS 100.207 and KRS 100.211 and contends the moratorium effectively functioned as a zoning text amendment. Under those statutes, zoning amendments are generally required to be reviewed by the planning commission, which must conduct a public hearing and provide a recommendation before final action is taken by a legislative body.
Kentucky Industrial Alliance argues those procedures were not followed and therefore the ordinance is invalid.
The company also argues the moratorium is arbitrary because the city had already been presented with proposed regulations governing data centers but instead adopted a blanket prohibition while conducting further study.
The complaint further alleges the city’s actions violated the company’s due process rights and that the timeline between the proposal and final adoption of the ordinance did not provide adequate opportunity for public review or opposition.
The lawsuit additionally argues Kentucky Industrial Alliance acquired vested rights in the proposed development before the moratorium was enacted.
According to court filings, the company owns more than 600 acres in the area and purchased an additional 75.8 acres adjoining the proposed project site for approximately $2 million. The company also states it spent $2,655 in filing fees and completed planning and engineering work associated with the proposal.
In support of its vested-rights claim, the lawsuit cites Perkins v. Joint City-County Planning Commission, a 1972 Kentucky Supreme Court case involving whether substantial investments made before a zoning change can create protected development rights. Kentucky Industrial Alliance argues its investments and reliance on the zoning regulations in place at the time establish similar rights in this case.
The complaint further states Kentucky Industrial Alliance entered into an option agreement with an unnamed developer interested in constructing a data center on the property.
That portion of the lawsuit prompted discussion during Monday night’s council meeting. While the topic was raised outside of closed session, Cline noted the complaint’s reference to an agreement involving a prospective data center developer and asked whether any member of the council or Mayor Dwayne Hatcher had signed a non-disclosure agreement related to the project. No member of the council or the mayor indicated that they had.
Cline also publicly disputed portions of the lawsuit following its filing arguing the company’s May 11 submission was incomplete on a social media post Tuesday.
“They filed a permit but submitted no plans with it,” Cline wrote. “So basically not a complete filing but a gut reaction from the public opposition and trying to get ahead of what our vote would’ve been that evening on May 11.”
Cline further stated she believes the lawsuit could provide additional information regarding the proposed project and the parties involved.
“The lawsuit is a great thing because all of the information will be revealed in discovery,” she wrote. “We will finally have answers on who is involved, how long and who signed NDA’s.”
The company is asking the court to declare the moratorium invalid, prohibit its enforcement and require officials to review the development proposal under the zoning regulations that existed prior to the moratorium’s adoption.
Court records show the case was filed June 8 in Barren Circuit Court. No hearing date had been scheduled as of Tuesday afternoon.
During Monday night’s meeting, the Cave City Council voted to retain outside legal counsel to represent the city in the matter.
Mayor Dwayne Hatcher declined to comment on the pending litigation when reached Tuesday. A message seeking comment from Planning Director Kevin Myatt was not returned at the time of publication.
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