Related Digital, a subsidiary of billionaire Steven Roth's real estate conglomerate, sued Saline Township, Michigan, after its planning commission rejected a 21 million-square-foot data center for OpenAI. The lawsuit alleged 'exclusionary zoning,' forcing the tiny community of 2,883 residents to accept the $16 billion project.
Key facts
- Saline Township has 2,883 residents.
- Project is 21 million square feet at $16 billion.
- Related Digital sued two days after rejection.
- Township board and planning commission both voted no.
- Developer alleged 'exclusionary zoning' in lawsuit.
The saga began in September 2025, when Saline's planning commission voted to reject a request to rezone 575 acres of farmland for a massive data center proposed by Related Digital, a subsidiary of Vornado Realty Trust CEO Steven Roth's empire. Two days later, Related Digital filed suit, arguing the township's decision amounted to 'exclusionary zoning' — a legal strategy that effectively bullied the township into submission [According to the source, citing Fortune].
The development, pegged at $16 billion, would serve OpenAI, which has been rapidly scaling its infrastructure footprint. OpenAI's recent open-sourcing of its datacenter networking tech and its forecast of $121 billion in AI research hardware costs for 2028 underscore the urgency behind such facilities [per our earlier reporting]. The Saline case highlights a growing tension: local communities resisting AI data centers, only to be overridden by legal and financial pressure from developers backed by billionaires.
The Legal Leverage
'Exclusionary zoning' claims typically target municipalities that block affordable housing; applying them to data centers is novel but effective. The township, lacking resources for a protracted legal battle, capitulated. The outcome mirrors similar fights in other states where local opposition to large-scale AI infrastructure has been steamrolled by developer lawsuits or state preemption laws.
What It Means for AI Infrastructure
This case is a signal that the AI industry's insatiable demand for compute will override local governance where necessary. As OpenAI, Anthropic, and others race to build clusters — Anthropic recently revealed a 220K GPU cluster at a $5B compute cost [per our earlier reporting] — the path of least resistance increasingly involves litigation against small towns.
What to watch
Watch for similar lawsuits in other small towns facing large AI data center proposals, particularly in Michigan, Ohio, and Indiana. Also watch for state-level preemption bills that strip local zoning authority over data centers — several are expected in 2026 legislative sessions.
[Updated 19 May via dck_news]
Oklahoma has enacted a law requiring data centers to pay for the power infrastructure they necessitate, preventing costs from being passed to residential customers [per Data Center Knowledge]. This contrasts with Michigan's approach, where towns like Saline lack such protections and must rely on local zoning to push back against projects like the Related Digital-OpenAI data center.
