(Illustration by Canva AI)

DATA CENTERS HAVE existed for decades—in fact, the largest data center in New England sits atop the Macy’s in Downtown Crossing. While most are unaware of its existence, it has operated rather unobtrusively for more than 20 years, powering critical financial transactions, pioneering research breakthroughs, and life-saving medical treatments.

The current debate is largely a reaction to a different type of data center—the so-called “hyperscalers” that have come to dominate the southern and western US. A commonwealth to our south, Virginia, is proudly home to 35 percent of all known hyperscale data centers worldwide.

These massive data centers pack a punch in terms of computing power—as well as staggering energy, water, and land use demands and related community and environmental justice concerns. Backlash to these facilities elsewhere has stoked a healthy discourse right here in Massachusetts—and we have an opportunity to get it right.

While the Lowell City Council recently voted to enact a one-year moratorium on new data center construction, officials in Everett are considering a more thoughtful zoning strategy to limit the size and scope of future data centers. There are no proposed plans for a major data center in Everett, only the potential for future tenants to include one as part of research or office space.

The developer of the 100-acre Everett Docklands site has offered to work with the city to set reasonable restrictions on any potential data centers and agreed that a hyperscale facility is not welcome there. As the district transitions from an industrial neighborhood to a new node of innovation, advanced manufacturing, and clean energy, data infrastructure will be essential to supporting new jobs.

At the state level, Gov. Healey is right to eschew a statewide ban, instead acknowledging the need to permit the development of data centers in a way that minimizes cost concerns and community impact.

The administration is advancing a multi-pronged strategy to position Massachusetts as a global leader in applied AI—leveraging AI technologies to develop real-world solutions across life sciences, advanced manufacturing, clean energy, and health care. This vision demands expanded data center infrastructure, and the governor signed into law a sales tax exemption for eligible data centers over 100,000 square feet.

The Commonwealth’s economic drivers—from our hospitals and higher education to life sciences, tech, and financial services—perhaps uniquely rely on local access to secure data centers that can quickly process mission-critical information. Some data centers are embedded within a larger office or research campus, while others are dedicated, free-standing facilities often available to small businesses that can’t afford to build and operate their own.

Massachusetts has the advantage of learning lessons from early movers, and local policymakers are well-positioned to guide more responsible and equitable development. Recent legislation across the country has focused largely on locational incentives and ratepayer protections, as well as water usage. Some states now appear to be revisiting incentive structures to address resource and community concerns.

Here in Massachusetts, municipalities should follow Everett’s lead to develop local zoning and permitting frameworks that strike a balance between addressing power needs, water management, and site-specific community concerns without stymying vital development.

Developers may be required to generate their own clean power, use closed-loop water systems, and deploy proven noise mitigation techniques—but they must be granted the scale needed to compete as data centers within larger developments, or as standalone data centers, where appropriate. State leaders should also consider more explicitly leveraging tax incentives to ensure alignment with energy affordability and sustainability goals.

Through policies rooted in transparency, stewardship, and innovation, Massachusetts can open the door to right-sized, smartly sited data centers. Before we pass bans, let’s talk about commonsense regulatory solutions. Our communities and our economic future will be better for it.

Kate Dineen is the president and CEO of A Better City, a Boston-based non-profit representing a multi-sector group of nearly 130 business leaders focused on transportation, climate, and land use issues.