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Montgomery County's Zoning Shift Paves the Way for Data Centers

InfraSale Editorial
June 1, 2026
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Montgomery County's new zoning guidance unlocks opportunities for data center development, attracting tech investments and boosting local infrastructure.

Executive Summary

Montgomery County, Pennsylvania, has issued zoning guidance recommending that data centers be permitted in heavy industrial zoning districts β€” including areas like the former steel plant site in Conshohocken. This is a meaningful policy signal for developers who have been scanning the Philadelphia metro corridor for viable, infrastructure-ready sites. Data center developers and tech investors stand to benefit directly, while traditional industrial land users face rising competition for prime heavy-industrial acreage. The InfraSale takeaway: sites in Montgomery County's heavy industrial zones deserve a fresh look before the market reprices them.

What Happened

Montgomery County, Pennsylvania, has issued new zoning guidance recommending that data centers be permitted uses within heavy industrial zoning districts. The guidance specifically references locations such as the steel plant site in Conshohocken as examples of the type of industrial land where data center development would be appropriate.

The county's rationale is practical: heavy industrial zones already tend to have the infrastructure foundation β€” power capacity, utilities, and large contiguous land parcels β€” that data center operations demand. By formally aligning zoning guidance with that physical reality, the county is signaling to the development community that it is open for business on this asset class.

This guidance represents a shift from an era when data centers occupied a regulatory gray area in many Pennsylvania municipalities. Explicit county-level direction gives developers a clearer path through the local approval process and reduces the risk of discretionary denials that have stalled projects in other jurisdictions.

No specific MW figures, acreage counts, or dollar amounts were included in the source reporting.

Source: More Than The Curve

Why This Matters

Montgomery County sits in one of the most infrastructure-dense corridors in the mid-Atlantic. Its proximity to Philadelphia, access to major fiber routes, and existing industrial utility buildout make it a logical candidate for data center growth β€” the zoning guidance removes a layer of regulatory ambiguity that was holding that potential back.

Industry context: Across the country, municipalities are wrestling with where to place data centers as demand from cloud providers and AI workloads accelerates. Counties that proactively clarify zoning β€” rather than forcing developers into variance hearings β€” compress project timelines and gain a competitive edge in attracting capital. Montgomery County appears to be making that calculation deliberately.

The Conshohocken steel site reference is also notable. Brownfield industrial sites with existing utility infrastructure are among the most sought-after data center development opportunities because they reduce greenfield permitting risk and often come with legacy power and water connections. A county-level endorsement of that specific land typology is a strong directional signal.

For developers already working Pennsylvania sites, this guidance raises the question of whether adjacent counties will follow with similar policy updates β€” or whether Montgomery County becomes a concentration point for near-term deal flow.

Power & Interconnection Impact

Heavy industrial zones are typically served by utility-grade power infrastructure sized for energy-intensive manufacturing operations. That legacy capacity is directly relevant to data center load requirements. Industry context: former industrial sites in the Philadelphia metro area are frequently served by PECO (an Exelon subsidiary), which operates within the PJM Interconnection footprint β€” one of the largest and most liquid electricity markets in North America.

PJM's interconnection queue has been under significant pressure from renewable generation projects, but large load customers such as data centers typically enter the queue through a different process than generators. Assumption: sites in Conshohocken and comparable Montgomery County industrial areas may already have substation access and distribution infrastructure that reduces the interconnection lead time compared to greenfield locations.

Developers should conduct site-specific utility due diligence early. Available substation capacity, feeder redundancy, and the feasibility of on-site backup generation are all variables that will determine whether a given heavy industrial parcel can support hyperscale or co-location loads without material utility upgrade costs.

Land, Zoning & Permitting Impact

The county's guidance is a meaningful permitting accelerant. When data centers are a permitted use by right β€” or at minimum a recommended use β€” in a zoning district, developers avoid the time and cost of seeking conditional use approvals or zoning variances. That reduction in discretionary review risk directly affects project pro formas and financing timelines.

Brownfield and former industrial sites often carry their own environmental review requirements, including Phase I and Phase II environmental assessments and potential remediation obligations. Assumption: developers pursuing former steel or heavy manufacturing sites in Montgomery County should budget for environmental due diligence that may extend timelines even where zoning is favorable.

On the community opposition front, heavy industrial zones typically buffer residential neighborhoods, which reduces β€” though does not eliminate β€” NIMBYism risk for data center siting. Traffic, noise from cooling systems, and visual impact remain legitimate community concerns that permitting processes will need to address.

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For landowners holding heavy industrial parcels in Montgomery County, this guidance is a value signal. Land priced for legacy industrial use may be significantly undervalued relative to its data center development potential.

Investment Takeaway

  • Site repricing is likely near-term. Heavy industrial land in Montgomery County that was priced for manufacturing or warehousing use should be re-underwritten against data center comps. The gap between those two valuations can be substantial.
  • Brownfield sites with utility infrastructure move to the top of the stack. The Conshohocken steel site reference signals that county planners are thinking about exactly the sites where power and land converge. Developers should prioritize parcels with confirmed utility capacity.
  • First movers have a window. Once this guidance is widely circulated among regional developers, competitive pressure on available heavy industrial parcels will increase. The best sites in the county will not be available at today's prices indefinitely.
  • Adjacent county policy risk is worth monitoring. If neighboring counties do not follow with similar guidance, Montgomery County could attract concentrated deal flow β€” increasing both opportunity and land cost pressure.
  • Environmental diligence is a potential timeline risk. Brownfield remediation requirements can add months or years to a project schedule. Investors should price that risk into acquisition and development timelines.

InfraSale Market Angle

For developers actively sourcing data center sites in the Philadelphia metro, Montgomery County just moved up the priority list. The combination of county-level zoning clarity, legacy industrial infrastructure, and proximity to major fiber and power networks addresses several of the early-stage site qualification criteria simultaneously.

Landowners holding heavy industrial parcels in the county should understand that their land's highest-and-best-use calculation may have shifted. Data center developers are paying materially different prices than logistics or light manufacturing users, and county zoning guidance that explicitly contemplates data center use strengthens that valuation argument in any disposition conversation.

For investors, the near-term play is site control β€” identifying and optioning parcels that meet data center siting criteria before the broader market absorbs this guidance. Understanding local zoning specifics, utility availability, and environmental baseline conditions will separate deals that close from deals that stall.

Market Signal

  • Location: Montgomery County, Pennsylvania
  • Primary Issue: Zoning reforms for data centers
  • Infrastructure Theme: Zoning changes
  • Who Benefits: Data center developers and tech investors
  • Who's at Risk: Traditional industrial sectors facing competition for land use
  • InfraSale Takeaway: Developers should explore sites in newly designated industrial zones for data center potential.

Take Action

Montgomery County's zoning guidance creates a narrow window before the development community fully prices this shift into land acquisition strategies. Identifying sites with confirmed utility infrastructure and clean environmental profiles now is the highest-value action any developer or investor can take in this market. List a powered land site on InfraSale.

FAQ

What are the new zoning regulations for data centers in Montgomery County?

Montgomery County has issued guidance recommending that data centers be permitted in heavy industrial zoning districts. The guidance identifies former industrial sites β€” such as the steel plant location in Conshohocken β€” as appropriate locations for data center development, citing existing infrastructure as a key factor.

How will these zoning changes affect data center investment in the region?

Clearer zoning guidance reduces the regulatory risk premium that investors assign to projects requiring discretionary approvals. Assumption: this should improve the underwriting profile for data center deals in the county and may attract developers who had previously bypassed the market due to permitting uncertainty.

What infrastructure is available for data centers in Montgomery County's industrial zones?

Heavy industrial zones typically carry utility-grade power infrastructure, including substations and distribution capacity originally built for energy-intensive manufacturing. Industry context: Montgomery County's location within the PJM footprint and PECO service territory provides access to a large, liquid electricity market β€” an important consideration for data center operators with high and continuous power demands.

Does this guidance apply to all industrial zones in Montgomery County?

Based on the source reporting, the guidance specifically references heavy industrial zoning districts. Developers should confirm with county planning authorities whether the guidance extends to lighter industrial classifications or is limited to the heavy industrial designation.

What risks should developers be aware of when pursuing these sites?

Former industrial and brownfield sites often require environmental assessments and potential remediation before development can proceed. Even with favorable zoning, Phase I and Phase II environmental reviews, utility upgrade costs, and community engagement processes can extend project timelines and affect overall project economics.

Internal Linking Suggestions

Tags

data centers, zoning, land development, investment, infrastructure, permitting

Related Topics:
data center development
industrial zoning
Pennsylvania land use
zoning changes
infrastructure support

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