Chicago in the Midst of Data Center Development Denials

For years, data centers were the quiet asset class — windowless boxes built on the periphery, generating substantial tax revenue with minimal traffic and zero school-age children to burden local districts. Approving them was often a rubber stamp for municipalities.

But this week, the “cloud” crashed into the reality of the suburban “crowd” in Chicago’s western suburbs, signaling that the era of easy approvals is officially over.

The flashpoint occurred in Naperville, where the City Council effectively killed a proposal by Karis Critical to build a campus on the city’s northwest side. Despite the promise of tax dollars, a resident revolt over noise, power lines and property values forced the council’s hand. A few miles away in Lisle, the friction was identical, as a public hearing for another data center proposed by Cloud Centers LLC had to be postponed simply because the venue couldn’t hold the number of residents who showed up to voice their concerns.

This resistance marks a critical shift for developers. The conversation has moved to the grid. A Chicago Tribune editorial this month raised sharp questions about how the massive electricity thirst of AI data centers impacts ComEd bills for regular ratepayers. This has handed opposition groups a powerful new talking point, moving the argument from “not in my backyard” to “not on my grid.” Developers are no longer just explaining setbacks and screening walls; they are being asked to justify their impact on the regional power supply.

The stakes for navigating this new landscape are astronomical. While Naperville and Lisle tap the brakes, the capital floodgates remain open nearby. In late 2025, news broke of Amazon’s massive plan for data center campuses in northwest Indiana, including a confirmed site in Hobart, with total investment potentially topping $15 billion. Further north in Grayslake, T5 Data Centers has been aggressively assembling land, spending over $60 million to expand its footprint, and it’s already required significant power from utility ComEd. Although even that project faced scrutiny regarding its proximity to residential neighborhoods.

The events in Naperville and Lisle mirror a suburban Chicago trend that began bubbling up late last year, when Aurora implemented a moratorium on data center developments to draft updates to its rules and general suburban pushback began slowing the boom.

For developers, the entitlement process for the big tech industrial complex now resembles the battleground of high-rise projects downtown. The remote cornfield sites are gone, and today’s development parcels neighbor subdivisions. To win approval in 2026, data center operators cannot rely solely on the economic argument. They will need to master the art of community relations, clearly articulating the tradeoffs and addressing fears about resources and noise well before the public hearing.