Why Sanford's New Zoning Could Shift Data Center Growth

When a data center developer eyes land near a small county seat, local officials face a choice: scramble to catch up or get ahead. Lee County, home to Sanford, appears to be choosing the latter — and the zoning framework they're building could matter far beyond this particular deal.

Data center development has been moving fast enough that many municipalities simply haven't had rules in place to manage it. The result has been a patchwork of ad hoc decisions, neighborhood friction, and missed opportunities on both sides. What's happening in Sanford is a case study in what it looks like when a county tries to write the rules before the industry writes them for you.

Understanding Sanford's Zoning Changes

County Commission Chair Kirk Smith's involvement signals this isn't a planning department footnote — it's a policy priority. When elected leadership steps into zoning conversations personally, it usually means one of two things: significant economic opportunity or significant community pressure. In Sanford's case, it looks like both.

Purpose-built zoning for data centers is still rare enough at the county level that getting it right here could serve as a template for other rural and exurban markets. Most local governments inherited commercial and industrial zoning categories designed for manufacturing, warehousing, or retail — none of which map cleanly onto a facility that consumes 20-100+ megawatts of power, generates relatively little truck traffic, employs a small permanent workforce, and requires extraordinary fiber and water infrastructure.

The objectives behind new data center-specific regulations typically address three pressure points: power demand (and its effect on the local grid), water consumption (especially for cooling), and visual and noise impact on surrounding properties. Without dedicated zoning language, these issues get litigated parcel by parcel. With it, developers know what's expected before they spend money on site work, and neighbors know what protections they have before a 500,000-square-foot building goes up next door.

Impact on Data Center Development

For the developer currently eyeing land near Sanford, clear zoning is genuinely good news — even if the specific requirements add cost. Regulatory uncertainty is one of the biggest killers of data center site selection timelines, and a county that has done the work of defining what's permissible is a county worth talking to.

Consider what the alternative looks like: a developer brings a project to a county with no data center zoning, triggers a special use permit process, waits 12-18 months for approvals, faces public hearings where concerns about noise and water use derail the timeline, and potentially walks away. That's not hypothetical — it's happened repeatedly in markets across the Southeast where demand has outpaced regulatory frameworks.

The flip side is real, though. Poorly drafted zoning can be just as problematic as no zoning at all. If setback requirements are too aggressive, if noise ordinances don't account for the specifics of cooling infrastructure, or if the approval process layers on too many discretionary review steps, you've traded uncertainty for inflexibility. Developers will simply move down the list to the next site.

The balance Lee County needs to strike is standards rigorous enough to protect existing landowners while remaining flexible enough to compete with markets that have been courting this industry for years.

Critical Factors for Site Selection

Zoning is necessary but not sufficient. Even with the most developer-friendly regulatory environment, data centers don't locate somewhere just because they can — they locate somewhere because the underlying infrastructure makes economic sense.

Power is the primary constraint. A hyperscale or large colocation facility needs reliable access to significant transmission capacity, ideally from multiple substations. If the utility serving Sanford can't commit to delivering 50+ megawatts within a reasonable interconnection timeline, no amount of favorable zoning will close the deal. Duke Energy and other regional utilities have been working to develop "data center ready" sites with pre-negotiated power capacity precisely because interconnection queues have become a bottleneck nationally.

Fiber connectivity is the second filter. Data centers are worthless without low-latency connections to major network hubs. Proximity to existing long-haul fiber routes — and the cost of the last-mile build — factors heavily into site economics. North Carolina has meaningful advantages here given the concentration of fiber infrastructure running through the region.

Water access matters for facilities using evaporative cooling, which remains the dominant approach for large-scale deployments despite growing interest in air cooling and liquid immersion. A site near Sanford would need to demonstrate either access to municipal water at scale or a viable alternative — a factor that's become more politically sensitive as drought conditions have focused public attention on industrial water use across the South.

Land cost and availability round out the equation. Compared to the Northern Virginia corridor — where land that sold for agricultural prices a decade ago now trades at premium commercial rates — markets like Sanford can offer meaningful cost advantages. That spread is exactly what's pulling development interest toward secondary markets.

Investment Trends in Data Centers

The developer interest in Lee County isn't random. It reflects a broader structural shift in where data center capital is flowing.

The hyperscale build-out in primary markets — Northern Virginia, Dallas, Phoenix, Chicago — has driven land costs and power costs high enough that secondary markets with strong fundamentals are now legitimately competitive. North Carolina specifically has seen increased attention: the Research Triangle is established, but adjacent counties are now on the radar for developers who want proximity to the corridor's fiber and talent without paying Raleigh-Durham land prices.

Nationally, data center investment is tracking toward $50 billion annually, and the geographic distribution of that capital is widening — which means markets like Sanford are competing for projects that wouldn't have looked at them five years ago.

Post-zoning, the investment calculus for Lee County changes in a specific way: it reduces the risk premium developers mentally assign to the site. A market with clear, tested zoning for data centers effectively moves itself out of the "pioneer risk" category. That matters when capital allocation committees are comparing a dozen sites across multiple states.

Next Steps for Developers

If you're evaluating sites in or around Sanford, the most productive move right now is direct engagement with county planning and economic development staff — not to lobby for favorable treatment, but to understand exactly where the zoning process stands. Early entrants into a regulatory process have an opportunity to shape reasonable outcomes; late entrants just have to live with whatever got decided.

Specifically, developers should be asking: What's the timeline for final zoning adoption? Are there pre-application meetings available? What does the approval pathway look like once zoning is in place — administrative or discretionary? How has the county engaged with utilities about power capacity for large industrial users?

On the infrastructure side, the due diligence checklist for a Sanford-area site should prioritize power interconnection above everything else. Get a preliminary interconnection study started early. The utilities are backed up, and the clock on that process starts the moment you engage them — not the moment you close on land.

Local community engagement matters more than many developers initially want to acknowledge. Counties that have navigated data center development successfully — and there's a growing list — have generally done so because developers treated public communication as part of the project, not an obstacle to it. Sanford is a community where that kind of relationship-building will carry weight with local officials.

The zoning framework taking shape in Lee County is worth watching, regardless of whether this specific developer moves forward. What happens when a county gets ahead of a fast-moving industry rather than reacting to it after the fact? The answer — in permitting timelines, community outcomes, and economic development wins — is almost always better than the alternative.

For developers, that's the signal. Markets doing the regulatory work proactively are markets worth taking seriously.

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