NDAs are hiding data center deals, drawing ire from locals — and attention from lawmakers

Secrecy Deals Are Quietly Reshaping America’s Data Center Boom — and Towns Are Paying the Price

Ecorescuezone.com – Across the American landscape, a new kind of industrial footprint is spreading: massive, warehouse-scale data centers designed to house the computing infrastructure behind artificial intelligence. They arrive with billions of dollars in investment, promises of jobs, and enormous energy demands. But in an increasing number of cases, the negotiations that bring them to a community are conducted behind closed doors, sealed by nondisclosure agreements that keep residents in the dark until construction has already begun.

The practice has drawn sharp criticism from local communities, transparency advocates, and a growing number of state legislators. Bills aimed at banning NDAs in data center negotiations have been introduced in Michigan, Oklahoma, Kentucky, and Ohio. Last week, Pennsylvania Governor Josh Shapiro issued an executive order prohibiting their use on data center projects overseen by state agencies under his authority.

A Beekeeper’s Alarm Bell

In Boyce, a town of roughly 1,000 residents nestled among cotton and soybean fields in Rapides Parish, central Louisiana, the consequences of that secrecy are already visible. Foster Hensel, a local beekeeper whose hives dot the surrounding farmland, watches construction crews clear a 300-acre parcel just a few miles from his operation. Earthmovers have begun grading the site, and perimeter fencing is going up.

Hensel’s concern is practical: he fears the new facility will spike his utility costs or alter the microclimate his bees depend on for pollination. More fundamentally, he is frustrated by what he did not know until the bulldozers arrived.

“Let me quote a good writer, Shakespeare — there’s something rotten in Denmark,” Hensel said. “There’s something wrong with that.”

What the NDAs Concealed

Documents obtained through public records requests filed by the Gulf States Newsroom and Type Investigations reveal that at least five state senators, the Rapides Parish assessor, and every member of the state-created industrial development board that negotiated the deal signed nondisclosure agreements. The contracts, operating under the code names “Project Lightning” and “Project Pixel,” barred the signatories from releasing project details to the public.

The project has since been publicly named Delta Forge 1. It is a $3.6 billion campus developed by Dallas-based Applied Digital Corp. that the state announced will draw 300 megawatts of electricity in its first phase — enough, according to data from the U.S. Energy Information Administration, to power roughly 200,000 homes on a peak summer day. Initial operations at the facility could begin as soon as mid-2027.

The deal also carries a state sales tax break on data center equipment, part of a broader Louisiana strategy to compete with other states courting AI investment. The England Economic and Industrial Development District, or EEIDD, the state-created board that brokered the arrangement, approved the deal on April 23 at a public meeting that featured little discussion.

How the NDAs Were Signed

According to the records, some NDAs were executed in December 2024 between Applied Digital and members of Louisiana Economic Development, a state agency. Additional agreements were signed in January of this year between Applied Digital and the EEIDD itself. By the time residents learned the project existed, the legal architecture of secrecy was already in place.

The records requests also surfaced at least 54 NDAs signed by elected officials in Louisiana covering various types of projects since Governor Jeff Landry took office in early 2024. The Rapides Parish agreements are among them, alongside others tied to data center developments in other parishes.

“Standard Practice” — and a Competitive Weapon

Eric Bonds, a professor and environmental sociologist at the University of Mary Washington in Virginia, surveyed data center projects in his state last year and found that NDAs were used in at least 25 of 31 cases. He describes the practice as effectively standard across the industry.

“After we published our research,” Bonds said, “we heard back from reporters and activists kind of around the country from Arizona, Indiana, Wisconsin, Pennsylvania.”

Companies and local officials who sign these agreements argue they are necessary to protect proprietary corporate information and to allow negotiators to speak freely without fear of public scrutiny mid-deal. Critics, however, contend the NDAs function as a competitive advantage: by keeping terms confidential, developers can shop their proposals from one jurisdiction to the next — parish to parish, county to county — without competitors or communities learning the pricing structure.

“Information is power, and these folks, they’re powerful, and they want to make a lot of money, so they’re going to control information as closely as they can so they have an advantage,” said David Cuillier, director of the Brechner Freedom of Information Project at the University of Florida.

A Transparency Problem With Deep Roots

Cuillier notes that Louisiana’s openness record is among the weakest in the nation. The state’s public-records culture, combined with the sheer volume of NDAs now attached to major infrastructure deals, leaves ordinary residents with few mechanisms to question what is being built in their backyard, at what cost, and under what conditions.

In Boyce, that gap has produced a palpable sense of betrayal. Some residents say the project was kept under wraps until it was too late to halt construction. The fences are up. The ground is being cleared. The bees, as Hensel notes, are already agitated.

The broader implication extends well beyond one parish. If NDAs become the default mechanism through which multibillion-dollar energy infrastructure is negotiated, the democratic bargain between government and citizen — that public decisions be made in public — erodes quietly, one sealed envelope at a time. The question now facing statehouses from Pennsylvania to Ohio is whether that erosion can be stopped before the next bulldozer arrives.