A flurry of legal activity during the past two weeks has surrounded a hyperscale data center under construction in Birmingham’s Oxmoor Valley neighborhood. Two new lawsuits related to the controversial project were filed last week, and on Thursday a judge consolidated three existing ones.
The consolidated lawsuits allege the city of Birmingham illegally granted permits for the data center, which is being built in a mixed-use zoning district near homes and a school, and ask for a permanent end to the project. Residents and the Greater Birmingham Humane Society filed those suits. The humane society had planned to build a medical facility for traumatized animals on land adjacent to the data-center site.
“There are a number of issues that are common to all the lawsuits, so it makes sense to have the same judge decide those common issues,” said Mark Parnell, an attorney for the residents.
Jefferson County Circuit Court Judge Javan Patton Crayton has set the next hearing in the case for March 8. Meanwhile, construction at the 80-acre site is taking place six days a week, for 12 hours per day, with completion slated for 2028.
Parnell said the consolidation won’t slow the judge’s decision. She had already scheduled the same hearing date for the case that had progressed furthest through the court system. Rob and Gail Sansome, a couple living near the site, filed that lawsuit and finished presenting evidence in court last month.
Defendants in the lawsuit include data-center developer Nebius, the city of Birmingham and Hoar Construction.
The two new lawsuits deal with the sale of the site and a billion-dollar tax abatement the Birmingham Industrial Development Board granted to Nebius.
A Regions Financial shareholder filed the suit related to the property sale. Regions Bank is a former owner of the main parcel that became the Nebius data-center site, and James Anderson’s lawsuit alleges three transactions in just one day improperly inflated the price of the land.
Anderson is suing a slew of people and companies on behalf of Regions. Last fall, Regions sold the property. Two subsequent sales of the same land on the same day raised its price by $66 million.
Anderson alleges Regions executives acted negligently in not obtaining fair market value for the land. And that Nebius and companies involved in the sales transactions actively concealed from Regions that a pre-arranged deal was already in place to resell the property at a much higher price.
The suit Anderson filed in Jefferson County Circuit Court claims that $66 million, plus interest and damages, are owed back to Regions. It names as defendants Regions executives, Nebius and three companies and their leaders who were involved in the sales transactions.
Birmingham resident Terri Michal filed the other lawsuit, also in Jefferson County Circuit Court. It alleges the Birmingham Industrial Development Board held an illegal special meeting in May to award a 30-year, $3.2 billion tax break just before new state laws that limit such incentives went into effect.
According to the lawsuit, the board failed to provide required public notice of the meeting, exceeded its authority in forgiving state and county taxes and didn’t conduct an independent cost-benefit analysis. Michal is asking the court to cancel the deal.
Board chair David Perry has defended the deal as a win for the community. He said property taxes from the site were $200,000 a year before the Nebius project and will increase to $87 million a year.
