McCormick County Residents Challenge Data Center Rezoning, Sparking Legal Risks

Executive Summary

A lawsuit filed by McCormick County, South Carolina residents against a proposed data center rezoning underscores a sharpening trend: local opposition is becoming a material project risk, not a checkbox item. The case is tied to a broader infrastructure proposal that includes a $1.5 billion natural gas pipeline, compounding the community concerns at play. Developers who treat zoning approval as a procedural formality—rather than a stakeholder negotiation—are increasingly finding themselves in litigation that stalls timelines and reprices deals. Investors evaluating data center sites in secondary markets should treat active community opposition as a due-diligence red flag. The InfraSale takeaway: pre-site engagement with local stakeholders is no longer optional.

What Happened

Residents of McCormick County, South Carolina, have filed a lawsuit challenging the county's decision to rezone land for data center development. The rezoning is connected to a larger infrastructure proposal that includes a $1.5 billion natural gas pipeline, a combination that has apparently intensified local concern over what is being built, how, and for whom.

Details of the specific legal claims and the full scope of community grievances have not been fully disclosed in available reporting. What is known is that a developer sought the rezoning, presented the proposal to county officials, and that at least some commitments or representations were made during that process—the precise content of which appears to be a point of contention.

The lawsuit reflects a pattern emerging across rural and exurban counties where large-scale infrastructure is being proposed on agricultural or low-density residential land. McCormick County, a small county in western South Carolina near the Georgia border, is not a traditional data center hub, which may explain why community engagement infrastructure was thin on the ground before the rezoning vote.

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Why This Matters

This lawsuit is not an isolated local grievance. It is a data point in a national trend: as data center developers push into smaller, secondary markets chasing cheaper land, lower taxes, and available power, they are running into communities with no experience absorbing this scale of industrial development—and no appetite to do so quietly.

Legal challenges, even ones that ultimately fail in court, impose real costs. Litigation introduces injunctive risk that can freeze construction, delays interconnection timelines, and creates lender uncertainty that can freeze financing commitments. Industry context: a 12–18 month legal delay on a utility-scale data center can represent tens of millions of dollars in deferred revenue for the operator.

The natural gas pipeline component adds a second flashpoint. Pipeline opposition has its own organized playbook—drawn from years of fights over projects like Mountain Valley and Atlantic Coast—and when pipeline resistance merges with data center opposition, developers face a coalition that is practiced at procedural delay and media pressure.

County governments in similar markets are watching. A successful legal challenge in McCormick County could signal to neighboring counties that rezoning approvals are reversible, raising the political cost for local officials who might otherwise support future projects.

Power & Interconnection Impact

The proposed data center's interconnection timeline is now directly at risk. Active litigation creates uncertainty for utility counterparties—if the land use status of a site is legally contested, utilities are unlikely to advance interconnection studies or sign large load agreements until the dispute is resolved.

The $1.5 billion natural gas pipeline tied to this proposal suggests the data center load is substantial—large enough to require dedicated generation infrastructure rather than relying solely on existing grid capacity. Industry context: projects requiring dedicated gas infrastructure typically represent several hundred megawatts of load or more, though no specific MW figure is confirmed in available reporting.

If the pipeline is delayed or blocked by legal action, the entire power supply thesis for the data center unravels. Developers in this position may need to pivot to alternative power sourcing strategies—grid-only interconnection, on-site renewables, or a phased load ramp—each of which carries its own timeline and cost implications.

Land, Zoning & Permitting Impact

The McCormick County case illustrates a permitting risk that is easy to underweight in pro forma modeling: a rezoning approval is not a final entitlement. Rezonings can be challenged in court, and in states with strong standing rules for neighboring landowners, that challenge window can remain open for months or years after a county vote.

Assumption: South Carolina's administrative and judicial review processes for zoning decisions likely provide standing to affected property owners within a defined proximity to the subject parcel—a standard mechanism in most states that makes post-approval litigation a standard threat vector, not an edge case.

Developers should expect that any rezoning of agricultural or low-density land to heavy industrial or data center use in a small county will face scrutiny. The smaller and more rural the county, the less institutional capacity exists to manage the political and legal dimensions of a large project—which puts more of the burden on the developer to manage community relations proactively.

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The outcome of this case could function as a soft precedent. Even without binding legal authority beyond South Carolina, developers and their counsel in neighboring states will study the procedural record to understand what arguments gained traction and what community engagement failures created vulnerability.

Investment Takeaway

Zoning approval is not site control. Investors should not treat a rezoning vote as a de-risked milestone until the litigation window has closed or the legal challenge has been resolved.
Pipeline-linked projects carry compound risk. When a data center's power strategy depends on new gas infrastructure, opposition to the pipeline is effectively opposition to the data center—and vice versa. Investors should underwrite both approval processes independently.
Secondary markets require community diligence, not just site diligence. Small counties often lack the planning staff and legal resources to fully vet proposals before voting, which means developers bear more responsibility for identifying and neutralizing opposition early.
Timeline assumptions need a litigation buffer. Assumption: deals in contested zoning environments should model a 12–24 month delay scenario and stress-test IRR accordingly before closing.
Reputational capital matters in constrained markets. A developer who loses a high-profile local fight may find subsequent rezoning applications in the same state more difficult. Local opposition networks communicate across county lines.

InfraSale Market Angle

For developers actively sourcing data center sites, McCormick County is a case study in what happens when a large-scale proposal lands in a community without adequate preparation. The lesson is not to avoid rural or secondary markets—those markets often offer the land scale, power access, and cost structure that make projects viable. The lesson is that deal velocity cannot come at the expense of stakeholder process.

Developers using InfraSale to identify and evaluate sites should layer community risk assessment into early-stage screening. Sites in counties with active opposition campaigns, pending litigation on adjacent projects, or limited history of large industrial entitlements deserve a risk premium in underwriting. Sites where the county planning department has demonstrated experience with comparable projects—and where community benefit frameworks have been established—represent a meaningfully lower execution risk.

Monitoring legal filings and rezoning appeal activity in target markets is a competitive advantage. Developers who identify opposition early can adjust their engagement strategy; those who learn about it at a financing close are in a much harder position.

Market Signal

Location: McCormick County, South Carolina
Primary Issue: zoning challenges for data centers
Infrastructure Theme: zoning risk
Who Benefits: local residents advocating for community interests
Who's at Risk: developers facing increased scrutiny and potential project delays
InfraSale Takeaway: Developers should conduct thorough community engagement to avoid opposition.

Take Action

McCormick County is an early signal, not an outlier. Developers who act on this risk now—by stress-testing their site selection criteria and deepening community engagement protocols—will be better positioned than those who wait for litigation to arrive at their own projects. Submit a data center power requirement.

FAQ

What are the legal implications of zoning changes for data center developers?

A zoning change approved by a county board is subject to legal challenge by affected residents, often for months or years after the vote. Successful challenges can result in injunctions that halt construction, force a re-vote, or invalidate the approval entirely—any of which can materially delay or kill a project. Developers should work with local land use counsel to assess the litigation window and standing rules in each target state before treating a rezoning as a closed milestone.

How can developers mitigate community opposition to large infrastructure projects?

Early, substantive engagement with community stakeholders—before a formal rezoning application is filed—is the most effective mitigation strategy. This means hosting public informational sessions, meeting with adjacent landowners, working with county economic development offices, and establishing clear community benefit commitments such as local hiring or tax revenue sharing. Developers who engage reactively, after opposition has organized, face a much steeper credibility challenge.

What are the risks of investing in regions with active legal disputes over zoning?

Active litigation introduces injunctive risk that can freeze construction and creates uncertainty for lenders and equity partners who require clear title and entitlement status before funding. Beyond the direct delay cost, legal disputes can signal deeper community resistance that may surface again at the permitting stage for infrastructure tied to the project—such as a pipeline, substation, or access road. Investors should require a legal contingency analysis before committing capital to sites in contested zoning environments.

Why does the natural gas pipeline component increase project risk?

Pipeline approvals involve a separate regulatory and political process from land use rezoning, often with broader standing for opposition participants and longer review timelines. When a data center's power strategy is contingent on a pipeline that is itself under legal pressure, the two risk surfaces are linked: delay or denial of the pipeline can strand the data center investment even if the rezoning holds. Assumption: developers in this situation should model alternative power sourcing scenarios as a hedge.

How could this lawsuit affect data center development in other South Carolina counties?

A visible legal challenge—particularly one that achieves any interim relief or settlement—signals to residents in neighboring counties that rezoning approvals are contestable and that organized opposition can impose real costs on developers. County officials who observe this dynamic may become more cautious about approving similar projects or may impose stricter conditions on approval, including community benefit agreements, environmental impact studies, or phased development requirements.