Highland Real Estate Development, along with city of Urbana officials and Champaign Economic Partnership Director Rich Ebert, first approached Champaign County commissioners in March 2024 about building a housing development and industrial park, according to a letter sent out by commissioners earlier this month.
During this meeting, city officials explained that Highland was working to construct a proposed housing development behind Walmart in Urbana, called Dugan Place. Highland representatives also expressed interest in buying property for a separate project on South State Route 68 to develop an industrial park. They said they wanted to buy land from private owners and buy the adjoining land from the county.
In the letter, commissioners noted the development could create jobs, boost the local tax base, and maintain consistency with the State Route 55 corridor, while potentially adding a strategic connector road to Route 68.
Real estate purchase agreement
In June 2024, with these factors in mind, commissioners voted unanimously for the CEP to act as the county’s economic development agent for the purpose of entering a multi-year option to sell the property to the developer on behalf of the county, according to the letter.
A real estate purchase agreement was made in September 2024 between the Champaign Economic Partnership, on behalf of Champaign County Commissioners (seller), and Scott T. Mallory, managing member, Urbana0624C, LLC (buyer). Commissioners own 94.11 acres of property at 2500 S. U.S. Route 68 and 2200 S. U.S. Highway 68 in Urbana that the buyer is interested in purchasing.
The buyer must give the seller a 30-day written notice of their intent to close on the property, which they have not initiated yet. At the closing, the buyer will pay the county $3,293,850 - the equivalent of $35,000 per acre - for the property, with the intent to develop for light industrial and commercial purposes.
Commissioner Tim Cassady said during a county commission meeting last week to address concerns related to the data center that, in late 2024, he started hearing rumors about a data center being built, so he looked more into concerns about the centers, such as their energy usage. He explained to community members he’d like to kill the deal, but is not sure if they can legally make that happen.
“We are reviewing what the ramifications would be to the county for us terminating this contract, what the legal obligations would be and what we would be subject to as far as penalty, and if we stand the grounds to be able to get out of this,” he said.
Commissioner Nino Vitale said in the same county commission meeting last week addressing data center concerns that when they sold the property, the zoning had specific uses that did not allow data centers to be built there. But then they discovered city council added a K-1 zoning provision after they annexed the property, which then allowed for data centers to be built on the property.
“That’s why we had no knowledge of a data center being built because it could not be built,” he said. “They (the city) have the zoning rights of that property. We do not … That all happened after we made our contract. That really was a gamechanger for us.”
Inside city council’s process
Urbana Mayor Bill Bean walked through the process the city has been through since this all started at the most recent council meeting.
He said council was asked to annex 219-acres into the city for economic development purposes and to approve zoning for that property. Each had three readings, a public hearing and passed by a 7-0 vote with no public concerns. Council was then asked to amend the zoning to allow data centers, which also passed.
“Economic development requires planning, discretion, and a public process — and we followed that process every step of the way,” Bean said.
Sharon Kisiel, chief of staff for Highland Real Estate, said Highland was involved in the annexation and zoning of the industrial park but will not be the ultimate developer of the site, which is Thor Equities.
She noted the development follows Urbana’s M1 guidelines, a classification that permits diverse uses including advanced manufacturing, industrial operations, and technology. She said as an approved industrial park the development can have a single user or a mix of uses, as long as the business is in one of those three categories.
Bean said when they began the annexation process, he didn’t know exactly what type of development would be built on that land. He said even by April 2025 when internal discussions with the development began regarding water capacity, “there was no certainty about a data center.”
“When the zoning change was made to allow data centers or data processing, I was personally unaware of the level of concern or negativity that would later arise,” Bean said. “I had not been approached by residents asking whether a data center was coming. Now there are many opinions being expressed — but until recently, no one had ever asked me directly.”
Proposed moratorium on data centers
At the most recent council meeting, Urbana City Council brought forward a resolution to impose a temporary moratorium on data centers for 12 months to allow city officials time to investigate the impact a data center would have on the local community.
However, it was pulled by a 5-2 vote after council members got more of an overview of the project with additional information. It’s not known if this resolution will be brought back for discussion.
The “Urbana Technology Hub” is planned as a 460,000-square-foot, single-story building with a 40-foot profile, according to project documents, which stated preliminary planning is ongoing and fully compliant with all use and zoning requirements.
The overview states that the $1 billion private investment will have minimal impacts and significant tax revenue generation. This includes potentially providing a total revenue of over $3 million in new tax revenue annually for the city of Urbana, over $2.8 million in new funding annually for Urbana schools, 30 to 80 new operation jobs and at least 1,000 construction jobs lasting several years.
The overview also explained:
- The project is investing “tens of millions” in noise dampening technology and committing to decimal limits that will be consistent with or quieter than current traffic at that intersection.
- It will use closed-loop cooling technology to minimize water consumption that’s comparable to a standard office building.
- Crews will work to build a new loop road to reduce traffic congestion.
- Residential and commercial customer power rates will not increase since the site was selected because of the grid that’s already there, which they plan to use to power the facility. The data center owner will pay for all transmission rates and infrastructure required to power the facility.
- There are no health risks associated with data centers because they are “clean facilities that do not generate industrial air pollution” and emissions only come from backup generators.
Developer Thor Equities released a statement about the proposed project, saying questions are expected and welcomed in any new development.
“It’s important that Urbana residents understand what this project is, and just as importantly, what it is not,” the statement reads. “This data center represents a $1 billion private investment, sited in an area well-suited for infrastructure development. The project is expected to generate new tax revenue for the City of Urbana — long-term, locally retained funding that supports schools and other community priorities.
“From the outset, the project has been designed around the priorities most important to residents: conserving water through efficient systems, protecting stable electric rates for households, and making meaningful investments directly in the Urbana community. We are proud to invest in Urbana and look forward to continued engagement with residents and local leaders to ensure project facts are widely available and this project delivers lasting value.”
County, city official communication
In the letter from Champaign County commissioners, they said while they understood there would be an industrial development, “at no time was it represented to the Board of Commissioners that a data center was being contemplated as part of the development.”
Cassady said the reason they released the letter was because they were told by the developer, who was building homes on the other side of town, that there was going to be an industrial development that was going to provide jobs.
“The picture in my mind was that makes sense to me. This developer’s building houses over here that are going to be at a price point of $400,000 to 500,000. If we develop an industrial park that produces jobs, those people that come here to work at those factories will then be in the market to move here and buy a house in this development,” he said.
Commissioners said in the letter that it’s come to light in recent weeks that the industrial development may include a data center. This has increased community interest and questions regarding the effect the center would have on water usage and quality, energy consumption and strain on the local grid, and zoning and development.
“While the commission is concerned about the same issues that the public conversation has centered around, the fact is that Champaign County Board of Commissioners has not been privy to the formation of a development plan involving a data center or any other potential use in the proposed industrial park,” according to the letter.
Along with many community members, one group in particular that is concerned about the development of the data center is the Facebook group “Champaign County Against Data Centers,” which has continued to post information, concerns, meeting information and more about the data center its Facebook page.
Commissioners wrote that all parcels involved in any potential development are within Urbana corporation limits, so commissioners have no role or legal authority to impose zoning restrictions, conditions, permissions or denial regarding the project.
Bean said since he’s been mayor, they’ve done an “extraordinary job” of bringing in economic development to the city such as new businesses, repurposing old buildings, transforming abandoned buildings and vacant lots, and expanding.
“In none of those situations did we broadly advertise negotiations to the public while they were underway — and that is standard practice for economic development,” he said.
But now, he said, the city is being accused of meeting behind closed doors to bring in business, which he said is not true.
“To suggest there was no transparency or no public visibility is simply false. These actions occurred through public meetings, public hearings, viewed on Facebook Live with recorded votes,” he said.
As for next steps, county commissioners are working to see what they can do to get out of the purchase agreement, but the city has zoning rights for the property and what can happen on that land.
The News-Sun reached out to Urbana city council members and the CEP for comment, but did not get a response.
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