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A judge’s decision Thursday will let a developer build a data center in southeastern Chatham County despite the county’s moratorium.
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Sanford-based Eco TIP West sued in April after Chatham County’s commissioners approved a 12-month moratorium on new data centers while the county considers possible land use rules.
Chatham County Superior Court Judge John Morris heard arguments in the case Aug. 31. In his written decision Thursday, Morris said “there is no genuine issue as to any material fact and [Eco TIP West] is entitled to a judgment in its favor as a matter of law.”
Morris did not explain his decision, but said it followed “careful consideration” of attorneys’ arguments, evidence and legal briefs. The court will determine Eco TIP’s demand for damages and legal fees in a future hearing, the ruling stated.
Data center demand is growing nationwide, due in part to the burgeoning AI industry. That has prompted communities to push back against the water- and energy-intensive operations.
Chatham’s moratorium, enacted in February, added it to a long list of communities statewide, including Durham, Orange and Alamance counties, that have paused data centers while updating development rules and studying the potential effects on local resources.
Eco TIP’s 750-megawatt data center plan in Moncure is expected to also include cryptocurrency mining, The News & Observer has reported. The site is part of an industrial megasite southwest of Raleigh that includes a FedEx facility and was the location of the failed VinFast campus.
The lawsuit may be the first court challenge to a data center moratorium in North Carolina.
County Attorney Emily Meeker shared a statement Friday morning expressing disappointment with the judge’s ruling.
““Chatham County adopted the moratorium to temporarily pause the construction of data centers while the County develops zoning regulations for these intensive land uses,” Meeker said. “These zoning regulations are important to protect the quality of life for Chatham County residents and the environment. According to the ruling, this data center project may move forward and will not be subject to the new zoning regulations. The County is considering all of its legal options.”
Eco TIP attorney questions timing of moratorium
Eco TIP West attorney Robin Tatum told the judge that the company had already spent over $11 million planning the Moncure data center when the county implemented the moratorium. County staff was aware of the planning for months before the commissioners acted, she said.
Eco TIP’s data center site is one of two Chatham megasites with heavy industrial zoning. The Chatham Advanced Manufacturing megasite in Siler City also allows data centers by right and is regulated under noise limits, buffers and other land-use rules that the town approved in May.
The CAM megasite is not subject to Chatham County’s data center moratorium.
Eco TIP West started working on the data center project in 2022 and secured electrical service, and water and sewer allocations last year, Tatum said. Chatham County planning staff issued a zoning interpretation letter in October 2025 that confirmed the Moncure site was available for construction by-right, she said.
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The county’s existing rules only require staff and the Appearance Commission to review whether the project meets current land-use rules.
Eco TIP filed a site plan application on Feb. 11, several hours before the commissioners voted to hold a public hearing on the proposed moratorium.
Eco TIP only learned about the pending moratorium at that meeting, Tatum said, and no one mentioned its data center plan when commissioners asked about active applications or projects. On Feb. 18, Eco TIP got a letter from the county that the project was on hold, she said.
The county’s move was illegal, rushed and a violation of state law, Tatum said, alleging that commissioners and county staff worked with data center opponents behind the scenes “to make sure Eco TIP was not aware of the item and so would not attend and participate.”
“This moratorium went through in 22 days, Your Honor, and nobody ever mentioned this project. It was as if it was not there,” she told the judge last month. “Now that’s extremely unusual in my experience … to basically close down an industry without mentioning there’s a project underway or evaluating it, but that’s what happened.”
Does the moratorium meet state law?
Tatum also challenged the moratorium in general, saying it did not meet state law or include a discussion about where and to whom it would apply. It was an attempt to take the developer’s by-right authority to build a data center, she said, and should not delay Eco TIP’s project.
The state’s new downzoning law also prevents local governments from reducing land uses in established zoning districts without written permission from all affected landowners, she said.
Local governments can adopt a temporary moratorium to consider how to address development concerns that prompted the pause, state law says. However, the law exempts approved projects and those whose permit or land plat applications have been accepted by a local government.
State law says zoning permits are a form of “development approval,” but it does not mention zoning compliance letters, which are an interpretation, county attorney James Ferguson said. The developer spent money on the site before identifying it as a data center project, he added.
Ferguson also argued the moratoriums are not a downzoning, because the land uses have not yet changed. Chatham County’s moratorium meets all state requirements and was implemented in response to citizen concerns and to understand a growing technology, he said.
Eco TIP also has not paid its permit application fee, leaving the application incomplete, he said.
“They were a day late and a dollar short to even get in the permit application window,” Ferguson said, urging the judge to rule on whether the moratorium is valid and let a jury decide if the data center project is exempt from the moratorium.
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This story was originally published September 18, 2026 at 12:10 PM.