Amazon Web Services is facing growing opposition from residents as construction advances on its planned $3 billion data center campus in Sidney, Ohio, putting the project at the center of a broader debate over water use, tax incentives and the impact of large-scale data centers on local communities.
The project, known as Project Galaxy in municipal filings, represents a major investment in cloud computing and artificial intelligence infrastructure. However, its rapid development has drawn increasing scrutiny from residents and community groups concerned about the project’s use of local resources and the terms of the public incentives supporting it.
The dispute will receive a public airing Thursday, September 3, 2026, when Amazon Web Services holds an online Community Information Session from 6:00 to 7:00 p.m. ET. The session, organized with Sidney Mayor Mike Barhorst, will give pre-registered residents an opportunity to submit questions about the project’s utility requirements, tax agreement and construction schedule.
Amazon Secured 30-Year Tax Abatement
According to records from the Sidney City Council, the city approved a development agreement that provides Amazon with a 30-year, 100% real-property tax abatement.
Under the agreement, Amazon will instead make $50 million in payments in lieu of taxes (PILOT) over a 15-year period.
City officials have defended the agreement by pointing to the project’s expected economic benefits. Once fully operational, the campus is projected to support 75 permanent, high-skilled jobs by late 2030, with an estimated annual payroll of $6.75 million.
Amazon has also committed $8.23 million in private funding for road improvements associated with the development, according to local records.
Construction Advances as Water Concerns Grow
Construction activity has moved forward through the summer, including the demolition of a historic barn along Millcreek Road to make way for the data center development.
The project’s use of water has become one of the central points of contention.
A finalized 10-year utility agreement allows the AWS facility to draw up to 1 million gallons of groundwater per day from the municipal system for cooling operations. The facility is expected to return approximately 390,000 gallons of wastewater per day.
Residents and local agricultural interests have raised concerns about the scale of the water demand, including potential effects on groundwater availability and private wells. Those concerns have contributed to the wider opposition surrounding the project.
The debate extends beyond water. Residents have also questioned the project’s use of agricultural land, the city’s tax agreement with Amazon and the pace at which officials approved the development.
Data Center Dispute Escalates in Sidney
The controversy has increasingly moved into local politics and the courts.
Citizen groups have launched recall petitions targeting city council members who voted to authorize the development. Meanwhile, Sidney officials have approved additional public funds to address legal expenses connected to public records requests and citizen-led litigation surrounding the project.
The situation places Sidney within a growing list of Ohio communities wrestling with the rapid expansion of large data centers.
In Wilmington, Ohio, a separate $4 billion AWS data center development has also faced significant opposition. City council members are meeting Thursday to consider emergency ordinances connected to the project following a failed rezoning vote and disputes over the use of public referendums.
Meanwhile, officials in Grove City, Ohio, recently imposed a one-year moratorium on new data center development following opposition to a proposed $6.9 billion campus.
Local response to the rapid expansion of data center
The developments illustrate the increasingly complex local response to the rapid expansion of data center infrastructure across Ohio. While the projects promise major capital investment, construction activity and new employment, communities are also confronting questions about water demand, land use, tax incentives, infrastructure costs and the long-term effects of hosting large computing facilities.
For Sidney, those questions are now playing out as Amazon’s $3 billion Project Galaxy moves deeper into construction.
The debate in Sidney also comes as developers pursue new approaches to powering the next generation of large-scale data centers. In Pennsylvania, Alpha Compute has signed a binding term sheet for a planned 200 MW natural gas-powered data center campus, with potential expansion to 1 GW. Unlike Amazon’s Sidney development, which has drawn scrutiny over its local utility and resource requirements, Alpha Compute’s proposal centers on dedicated natural-gas generation using Marcellus gas resources to supply power to the planned campus. The Pennsylvania project remains subject to due diligence, permitting, financing and definitive agreements.
Project Galaxy Factsheet
- Developer: Amazon Web Services (AWS)
- Project: Project Galaxy data center campus
- Location: Sidney, Shelby County, Ohio, north of Millcreek Road and west of Vandemark Road
- Total investment: $3 billion
- Projected completion: Late 2030
- Permanent employment: 75 high-skilled operational positions
- Projected annual payroll: $6.75 million
- Tax agreement: 30-year, 100% real-property tax abatement, with a $50 million PILOT payment structure over 15 years
- Infrastructure funding: $8.23 million in private funding from Amazon for local road improvements
- Water-use agreement: Up to 1 million gallons of groundwater per day
- Utility agreement: 10 years
- Projected wastewater return: Approximately 390,000 gallons per day
Leave a Reply