This Small Town Rejected New Restrictions on $3 Billion AI Data Center, Here’s Why
A small North Dakota town has made a surprising choice as communities across the country push back against massive AI data centers. While voters elsewhere demanded tighter rules, residents of Harwood rejected a proposal that would have given them more oversight of large industrial projects.
The November 3 vote came as a $3 billion data center was being built on the edge of town. The project promises new jobs and millions in future tax revenue, but some residents worry about what it could mean for their community.
Of the 430 votes cast, 325 opposed the proposed rules, while 105 supported them. The measure failed by nearly three to one, leaving Harwood on a different path from other towns facing similar development plans.
Yet the vote wasn’t a simple choice between supporting or opposing AI. Residents disagreed over how much control the town should have over future projects, how much new oversight would cost, and whether the financial rewards were worth the changes ahead.
What Voters Rejected
The proposed changes would have required more review before Harwood approved certain large industrial developments. Under the official ballot amendment, qualifying projects would face independent assessments, public hearings, and additional requirements before receiving city approval.
Data centers were included, but the rules also covered other large industrial operations. Projects using at least 100 megawatts of electricity or covering 100 acres could qualify. Smaller developments could also face review if they met multiple impact thresholds.
The proposal would not have stopped the data center already under construction. Instead, it focused on future projects and major changes requiring city approval.
Mayor Blake Hankey opposed the measure. Speaking to Business Insider, he argued that the requirements could place a financial burden on a town of fewer than 1,000 people.
Hankey also worried that the rules might affect businesses beyond data centers. For him, the question was about Harwood’s ability to attract future development.
Money Changes Minds
Harwood has a major reason to welcome the project: tax revenue.
According to The Washington Post, Hankey estimates the data center could bring Harwood $1.65 million in annual property taxes once completed. That’s about six times the property tax revenue the city collected in 2024.
The facility, known as Polaris Forge 2, is being built by Texas-based Applied Digital. The company expects the development to create at least 200 full-time jobs.
There was also a question of location. Harwood and nearby Fargo had competed over which city would claim the land. Hankey believed the project would be built in the area regardless, leaving Harwood with a choice about whether it would collect the taxes.
Applied Digital has continued investing in the site. In a November 2025 announcement, the company said $450 million in additional financing was expected to support construction at Polaris Forge 2.
The campus already had a lease for 200 megawatts of computing capacity, with room for a much larger expansion.
Not Everyone Agreed
For some residents, the promise of new revenue did little to ease concerns about the town’s future.
Mike Swartz helped organize the effort to put the oversight measure before voters. He told Business Insider that many residents felt blindsided by how quickly the project moved forward.
Swartz said construction began just 21 days after the project was announced. He wanted residents to have more information and a greater role in decisions that could change their town for decades.
The mayor acknowledged signing a nondisclosure agreement with Applied Digital during the early discussions. He defended that decision, saying he feared the development could otherwise go to Fargo.
Other residents raised questions about electricity use, noise, and possible environmental effects. Some became more comfortable with the project after learning more about its expected impact on local power costs.
Construction Moves Ahead
Applied Digital’s development is already well underway, regardless of the election result.
The company has described Polaris Forge 2 as part of its expanding North Dakota data center network. Its long-term plans allow for substantially more computing capacity than the initial construction phase.
Meanwhile, Harwood’s rejected amendment leaves the city without the additional review process its supporters sought.
The unofficial November 3 election results show 75.58% of participating voters opposed the measure, compared with 24.42% who supported it. The proposal would have added Article X to the city’s Home Rule Charter.
