A real estate developer is suing the city of Urbana, its city council and its zoning appeals board, after zoning code changes and a moratorium put a halt to data center construction.
The New-York based development firm, Thor Equities, is behind a data center proposal it refers to as the Urbana Technology Hub, a 460,000-square-foot data center near the intersection of Ohio 55 and U.S. 68 near the Rittal plant.
As news of the proposal circulated across the community, it’s sparked new local laws to keep these types of developments in check.
The firm filed the federal lawsuit Friday. WYSO obtained the legal filing. It alleges the city of Urbana violated state and local laws when it changed regulations preventing data center developments, pointing to the timing as the issue.
Thor Equities submitted a site plan to the city in February. The next month, the city council passed a 12-month pause on the construction of big data centers.
This lawsuit comes days after the Urbana city council adopted new zoning codes reversing data centers as a permitted land use in the city’s M-1 manufacturing district.
“The City’s actions have caused lost investment, delayed project timelines, impaired business relationships, and deprived the local community of jobs, tax revenue, and the benefits of planned infrastructure improvements,” the complaint reads.
The city of Urbana declined to comment on the lawsuit.
Here’s the timeline of events leading up to the lawsuit:
April 2025 - Urbana’s city council voted to amend zoning regulations to integrate “Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services” as a permitted use in locations zoned as M-1, meant for manufacturing. At that same meeting, the council voted to annex the Thor Equities’ Urbana property and rezone it as M-1.
November 2025 - The city council approved a Community Reinvestment Area agreement it negotiated with Thor, creating a tax abatement for the project.
February 2026 - Thor Equities submits site plan application to Urbana’s Building and Zoning Board of Appeals. Shortly after, the board rejects the application.
March 2026 - Urbana city council passes 12-month moratorium on data center developments.
April 2026 - Urbana city council approves the creation of a committee to research and review the potential impacts of data center developments if they are built there.
June 16, 2026 - Urbana city council votes to repeal Ordinance 4621-25, making data centers banned in the city.
Up until this February, Thor argues in its complaint that “through successive and deliberate actions, the City paved the way for the development of a data center on the subject property.”
It states case law disallows cities from enacting laws that prohibit the use of that property in a way that was previously admissible at the time of submitting its site plan application.
The firm said it’s spent over $19 million leading up to the development. The developer states the project would produce $3 million in tax revenue annually for the city.
The city of Urbana has 21 days from the filing date to respond to the suit.
In a statement from Thor Equities, it said it rejects “the misinformation and outright nonsense being spread online about data centers — including wildly exaggerated claims about water usage, noise levels, and dangerous, baseless propaganda about health impacts that have zero grounding in reality.”
“Thor looks forward to resolving this matter fairly so it can continue being a strong partner for Urbana and help build a brighter future for the city,” the statement continued.
