Monroe tried to stop AI data centers, now NJ town faces a $300M lawsuit

⚠️ A developer is seeking $300 million after Monroe Township banned new data center construction.

➡️ The lawsuit says the ordinance is unconstitutional and unfairly blocked plans for a 172-acre site.

🔴 The case mirrors a similar legal fight after another New Jersey town banned data centers.

Another New Jersey community is facing a massive lawsuit after a local ban on data center construction got in the way of a developer’s plans.

Monroe Township in Gloucester County is being sued for $300 million in damages by Hexa Builders over the loss of the use of its property as a data center.

The Princeton-based development company accused local officials of being “arbitrary and capricious” in adopting one of the state’s first municipal ordinances to ban data center construction.

In June, Hexa Builders first filed a complaint in Gloucester County Superior Court — calling the recently adopted ordinance banning data centers unconstitutional, among other legal claims.

Gloucester County court

How Monroe Township's data center fight escalated

Hexa Builders owns a 172-acre property at 3043 South Black Horse Pike, three lots of vacant farmland.

More than a year ago, online records show the town amended and adopted a “Hexa Builders Redevelopment Plan” to include data centers as a potential, principal permitted use.

It was not until this year that public attention began to catch up to what an AI data center entails in terms of the demand for electricity and potential water use for cooling purposes.

Starting in January, crowds began to attend public meetings to question preliminary plans for a “warehouse and distribution center” in Monroe.

By March, Monroe officials decided to follow a new recommendation to add new and more extreme restrictions to avoid data centers, according to Mayor Greg Wolfe.

Wolfe says their input included public feedback from members of Pinelands Alliance and NJ Food & Water Watch.

On April 8, Hexa filed an application to amend its site plan to create a million-square-foot data center, instead of a warehouse, according to Hexa’s lawsuit.

The changes also included a closed-loop cooling system to avoid "continuous groundwater withdrawal” as well as some on-site electrical Infrastructure, the lawsuit said.

With such a vast footprint, the project would qualify as a high-capacity, hyperscale data center.

Such data centers have risen in popularity among developers in just the past couple of years, as they can provide lucrative deals when leased to AI providers.

Federal lawsuit could have implications beyond Monroe

“The lawsuit does not come as a surprise to the Mayor or Township Council,” Monroe Township said in a June 9 statement to the town’s Facebook page, adding that the council has said that an outright ban on data centers “would lead to litigation against the Township.”

The lawsuit was moved to federal court in Camden on July 6, as first reported by NJ.com.

Read More: Developer sues Andover as more NJ towns ban data centers

Data center fears stoke chaos at public meeting on May 7, 2026 in Andover Township, NJ (Courtesy Sussex Visibility Brigade)

It is a similar legal complaint to the one filed by a Pennsylvania-based developer, after a Sussex County town also blocked data centers from being built in the community.

That ordinance adopted in Andover Township also followed months of large crowds and loud opposition at public meetings.

“The consistency determination was arbitrary, capricious and unreasonable,” according to the complaint filed July 10 in Superior Court in Sussex County by National Land Developers.

This ongoing struggle over data centers being built and public fears over spiked electric bills and resource exhaustion reminds many analysts of the lost public battle over cell phone towers.

A slew of town-by-town restrictions against cell phone towers were previously reported in 2019 by The New York Times.

Seven years later, Propublica reported on a total lack of any federal research on potential health risks of cell phone radiation, as service towers have grown in intensity and scale to keep up with use and demand.

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