Google Gave Up an $80 Million Tax Break in Hermantown, Minnesota. Four Days After the Council Approved Its Data Center Anyway, Voters Fired the Member Who Said Yes.

Google could have claimed up to $80 million in local tax relief for the data center it's building in Hermantown, Minnesota, a rural stretch of land just outside Duluth. In October, with opposition to the project at its loudest point in two years of fighting, the company told the city it didn't want the abatement after all.

That's an unusual move worth sitting with before anything else, because property tax abatement is the default ask in nearly every data center deal GridPermit tracks. Pine Island, Minnesota got a sense of the contrast the same week: state regulators there approved roughly $36.5 million in abatement for a different Google campus, even as Hermantown's withdrawal became public. Walking away from the break doesn't end the fight over Hermantown's project. It does mean the city keeps more of the new tax base that a 200-plus-acre, multi-building campus would actually generate, instead of trading most of it away for twenty years to get the project built.

Two years of open houses, protests, and three lawsuits

The project has been contentious since Google was first named publicly as its developer in March. The company and its local development entity, Harmony Group LLC, held an open house in June to answer resident questions. By August, opposition had only grown, and Google scaled back its own plans in response. A May 5th council meeting ended with a 4-0 vote to table approval altogether, citing pending litigation and an incomplete environmental review. A scheduled vote in late October had to be postponed again after two hours of chanting protesters outside the council chambers forced that meeting's cancellation.

The litigation behind those delays is real and still active. A citizens' group calling itself Stop the Hermantown Data Center sued the city in St. Louis County District Court in late April, represented by the Minnesota Center for Environmental Advocacy. One of the named plaintiffs, Emma Richtman, has described the suit's purpose as challenging what she calls "the city's actions and lack of transparency." The Minnesota Center for Environmental Advocacy separately sued the city and the data center company on its own, arguing state law requires a full environmental review before construction. A third suit, filed by two homeowners near the site, claims they were misled into selling their land on the understanding it would become a solar farm, not a data center campus. A motion to block permits and construction while those cases proceed was denied. A scheduling conference in the zoning and transparency case is set for November 6th.

None of that stopped the vote. On the night of October 30th, after roughly four hours of public comment, the Hermantown City Council unanimously approved all six resolutions the project needed anyway. Residents who spoke were against it by a margin of about eleven to one. The approvals covered a development agreement with Harmony Group, a special-use permit, and a reuse-and-decommissioning agreement covering what happens to the site if the data center ever closes, plus a requirement that Harmony fund the water, sewer, and road improvements the expanded campus will need, costs that would otherwise fall to the city or its existing ratepayers.

The council that approved it isn't the council anymore

Four days later, on November 3rd, Hermantown held its regular city election, and the data center was effectively the only issue on the ballot. Three candidates ran for the city's two open council seats, and all three said the project was why they were running. Emma Richtman, the same Emma Richtman who had sued the city five months earlier, finished first. Candi Mock finished second, taking the other open seat. Incumbent Andy Hjelle, who had cast one of the votes approving the data center just four days before, finished third, losing to Mock by more than 600 votes.

A sitting council member losing his seat days after a high-profile vote, to a challenger who ran specifically against it, is unusual on its own. A plaintiff in active litigation against a city winning a seat on the council that oversees the project she sued over is more unusual still. Hermantown wasn't the only Minnesota town where data centers reshaped a local council race this cycle. In Monticello, challenger Derek Armstrong unseated incumbent Tracy Hinz, while Charlotte Gabler, a sitting council member who has pushed for more disclosure from developers, won reelection. In Pine Island, the result was more mixed: two candidates who support that city's own Google project tied for the second open council seat, while first-time candidate Tosca Wohl, who opposed it, led the whole field with 28% of the vote. MinnPost has tracked council races in six Minnesota cities tied to data center fights, Faribault, Farmington, Hermantown, Monticello, North Mankato, and Pine Island, and separate reporting counts nearly a dozen Minnesota cities and counties that have voted on data center moratoriums altogether. None of it undoes the October 30th vote in Hermantown specifically. It does mean the political ground under that vote isn't the ground it was approved on, and Hermantown isn't the only place where that's true.

What the project will actually cost is still unsettled in the public record, too. The city first described a $650 million project from an unnamed "Fortune 50" company before Google was named. A planning consultant's early estimate ranged from $1 billion to more than $2 billion. By June, local reporting had settled on a $1.2 to $1.5 billion range, and the square footage in public filings has moved almost as much, from roughly 1.2 million to 1.8 million square feet across three buildings. None of those numbers is necessarily wrong; cost and scope estimates move as plans firm up. But the spread is wide enough, and the project large enough, that which figure shows up in the next filing is worth tracking rather than assuming today's headline number is the final one.

What the council actually approved is also narrower than the headline suggests. Hermantown's yes covers zoning and local permitting: real approvals, but not the only ones the project needs. Google's power-supply contract with Minnesota Power still requires sign-off from the Minnesota Public Utilities Commission, a separate process running on its own timeline. The three lawsuits are still open, and the first scheduling conference isn't until November 6th. None of that makes the October 30th approval meaningless. It does mean a council vote is one entry in a diligence record, not the end of one, which is exactly the gap between an announcement and a locked-in project that GridPermit's own Kill Test exists to track, whether the open question is a utility's grid upgrade or a zoning approval an election just made politically unstable.

Local business groups, including the Duluth Area Chamber of Commerce, have backed the project throughout, and the jobs and tax base an operating data center this size would bring to St. Louis County are real. So is the $80 million the city chose not to collect in exchange for them, a trade Google didn't have to offer and made anyway. Hermantown's voters just sent a specific, documented signal about how they weigh all of that against the cost of getting there, four days after their council told them the deal was done. The project's next real test isn't another council vote. It's whether a reshaped council, a pending state utility review, and three active lawsuits end up pointing the same direction once they're actually resolved, and right now nobody, not Google, not the city, not the plaintiffs, can say with certainty that they do.