Articles Data centers
The Data Center Ordinance and the Lawsuit Against It
Ordinance 26-1779 bans data centers and detention centers throughout Montgomery Township. E. Kahn Development sued on July 31, 2026 to void it. What the ordinance says, what the complaint argues, what the Planning Board minutes actually record — and why the widely reported $300 million figure is false.
What the ordinance does
Ordinance No. 26-1779 amends Chapter 16 of Montgomery’s Land Development Code. It adds two lines to Subsection 1.5, “Prohibited Uses”:
Data centers are specifically prohibited throughout Montgomery Township.
Detention centers are specifically prohibited throughout Montgomery Township.
It also adds definitions of both terms to Subsection 2.1. The detention-center definition reaches facilities run by “a private or government entities” alike, and covers people held in transit to or from a court, jail or prison as well as asylum seekers and undocumented immigrants awaiting immigration decisions. (The recitals go further, naming immigration detention centers, private detention facilities and correctional facilities.) They give the township’s stated reasons: for data centers, increased electrical demand, noise from cooling equipment, large water consumption, and incompatibility with surrounding land uses; for detention centers, public-safety and emergency-services demands and environmental and economic burdens. The stated purpose is “to ensure the orderly development of the Township and to protect existing residential, commercial, and environmental resources.”
The Township Committee adopted it on June 18, 2026, by a 4-0 roll call — Martin, Ahn, Deputy Mayor Taylor Todd and Mayor Singh. At the hearing a resident told the Committee that other New Jersey towns — she named Pemberton, Andover, Red Bank and Asbury Park — had already begun moving to protect themselves, and that this ordinance would add Montgomery to that list.
The Planning Board step
Under the Municipal Land Use Law, a zoning amendment goes to the Planning Board first, which reviews it and reports on whether it is consistent with the Master Plan. That happened on June 8, 2026, in a discussion of about twelve minutes.
Most of it was about drafting. One member noted the detention-center definition appeared to capture the Montgomery Township Police Department’s own holding cells, in the building the Board was sitting in, and the Board agreed to recommend a carve-out. Another argued the data-center definition said nothing about scale and might sweep in an ordinary employer with a large server operation; the answer from the table was that the definition turns on a facility’s primary use. Board Attorney Karen Cayci framed the motion: find the ordinance consistent with the Master Plan, and separately recommend exempting the local police. It carried 9-0. No member of the public spoke.
Two things follow from that meeting. The minutes state, in terms: “The Board found the ordinance to be consistent with the Master Plan.” And the Board’s recommended police carve-out did not survive — the ordinance as adopted on June 18 contains no exemption for the Montgomery Township Police Department.
The public hearing
At the June 18 hearing, Craig Gianetti of Day Pitney, for E. Kahn Development, asked the Committee to reject or carry the ordinance, arguing that a blanket prohibition must bear a reasonable relationship to a legitimate planning objective and that the Municipal Land Use Law contemplates asking where a use can be accommodated rather than eliminating it outright. He also told the Committee the company’s by-right site plan application for the Grandview Road campus had already been deemed complete, so in his view the ordinance would not reach it; his stated concern was future effect — that an approved use would become a pre-existing nonconforming one. The township has not conceded that reading on the record. A partner in the property followed with the site’s technical case: dual 69 kV transmission lines feeding an on-site substation, fiber along the rail corridor, enough acreage for berms, landscape buffers and what he called sheer linear separation from neighbouring properties, and closed-loop cooling he said loses about five percent of its water a year.
Six speakers backed the ban, on energy, water, heat, noise and land-use grounds: Montgomery residents Dawn Cohen, Mary Reece, Nancy Herrington and Kendra DiPaola, Mike Pisauro of The Watershed Institute, and Jenny Psaki, who told the Committee she is not a Montgomery resident but came to support the ordinance. The Committee closed the hearing and adopted the ordinance that night.
The lawsuit
On July 31, 2026, E. Kahn Development Corp. filed suit in Somerset County Superior Court seeking a declaration that Ordinance 26-1779 is invalid and unenforceable, and an injunction barring its enforcement.
One of the complaint’s arguments, as reported, is that the Planning Board’s June 8 recommendation lacked a documented discussion of the ordinance’s consistency with the township Master Plan.
The minutes do not support that as stated. The consistency finding is written into them explicitly, the Board Attorney framed the motion around it, and the motion as voted included it. What is fair to the developer’s side is that the finding was stated rather than argued: the Board’s recorded debate was about definitions and a police carve-out, not about which Master Plan goals a townwide ban serves. Whether a court treats a stated finding as sufficient is an open question, and this page cannot answer it.
As of September 17, 2026, the township had not been served. The township attorney told the Committee that night: “I have reviewed the complaint that we have not been served with, but it has been filed.” No ruling and no hearing date has been reported. A separate, earlier suit by the same developer against the Montgomery Township Planning Board — over the Board’s refusal to hear a General Development Plan, which Montgomery has no ordinance authorizing — also remains pending.
Correction: the “$300 million” figure is false
Do not repeat it. In August 2026, NJ.com reported that the suit sought more than $300 million in damages from Montgomery, and a syndicated item carried by WDHA, Magic 98.3 and WMTR repeated the figure in its headline. Other coverage picked it up from there.
On the record at the September 17, 2026 Township Committee meeting, the township attorney said the complaint had been read and that the figure is not in it:
That is completely incorrect… There is no demand for $300 million in that lawsuit. I suspect it was shoddy reporting, and it reported on another lawsuit filed in a different municipality. It didn’t come from Montgomery.
The evidence supports that account. A $300 million data-center suit does exist in New Jersey — in Monroe Township, brought by Hexa Builders, LLC and 3043 Williamstown Urban Renewal, LLC over a property on the Black Horse Pike in Williamstown. Different municipality, different plaintiffs, different property. Patch’s own Montgomery story states no damages figure at all.
Two honest caveats. No outlet appears to have published the Montgomery complaint itself, so the full relief sought is unverified beyond the declaratory and injunctive relief Patch quoted from it. And the correction came late: at the September 17 meeting, resident Nancy Castilino said the $300 million figure had frightened residents on fixed incomes, and asked why nobody had corrected it when she wrote to the township in August.
Watch it yourself: the township attorney on the $300 million figure, 1:03:10.
Why this thread now touches the others
At the same September 17 meeting, the township attorney said a redevelopment plan over the Kenvue site “would also short circuit that possibility of a data center,” and expressed confidence that the redevelopment law “would be a road out of all of these lawsuits.” The data-center ban, the housing case and the redevelopment study are being argued separately, but the township is now describing them as one negotiation.