Tech companies and local officials are covering data center talks in NDAs
Former sheriff’s deputy Shannon McManus looks out over the data center project construction site in Boyce, La., last month. He’s one of the local residents who has objected to nondisclosure agreements that kept negotiations for the project from the public.
Jay Marcano for NPR
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Jay Marcano for NPR
By fields of cotton and soybeans where his bees forage and pollinate, Foster Hensel pries open the lid of one of his beehives, setting off a rising hum from inside.
“You hear the difference in the sound?” he asks, pumping the bellows of a small smoker to try and settle the bees. “They’re getting a little aggravated.”
What has Hensel concerned is a few miles down the road. In Boyce, a small town in Rapides Parish in central Louisiana, construction is starting on a 300-acre data center site.
The beekeeper worries the new warehouse-like facilities will raise his utility bills or change the local environment. And he asks why there’s not more information.
“Let me quote a good writer, Shakespeare — there’s something rotten in Denmark,” Hensel said. “There’s something wrong with that.”
The negotiations between the data center developer — Dallas-based Applied Digital Corp. — and local officials were shielded under nondisclosure agreements (NDAs).
In Rapides Parish, the secrecy left residents with unanswered questions and distrust of their local leaders. But the use of NDAs for negotiations on data centers is common across the country, according to experts and those in the industry. And the practice has faced opposition from the public and some lawmakers.
Local beekeeper Foster Hensel pumps smoke into a beehive near Bayou Rapides in Alexandria, La., last month.
Jay Marcano for NPR
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Jay Marcano for NPR
Bills to ban NDAs for data centers have been introduced in several states, including Michigan, Oklahoma, Kentucky and Ohio. Last week, Pennsylvania Gov. Josh Shapiro banned their use on data center projects by agencies he oversees.
NDAs are common in data center projects
Eric Bonds is a professor and environmental sociologist at the University of Mary Washington in Virginia. He and his research partner found that NDAs were used in at least 25 of 31 data center projects they surveyed there last year. He said NDAs seem to be “standard practice.”
“After we published our research,” Bonds said, “we heard back from reporters and activists kind of around the country from Arizona, Indiana, Wisconsin, Pennsylvania.”
Companies and local officials who sign nondisclosure agreements say they’re needed to protect corporate secrets and to negotiate freely. But experts say they also give data center developers an edge as they move from county to county — in this case, parish to parish — seeking the best deals.
“Information is power, and these folks, they’re powerful, and they want to make a lot of money, so they’re going to control information as closely as they can so they have an advantage,” said David Cuillier, director of the Brechner Freedom of Information Project at the University of Florida.
Records requests filed by the Gulf States Newsroom and Type Investigations turned up at least 54 NDAs signed by elected officials in Louisiana about various types of projects since Gov. Jeff Landry took office in early 2024. They include the ones in Rapides and others for data centers.
“Transparency in Louisiana isn’t very good,” Cuillier said. “It’s one of the more secretive states in the country.”
The Applied Digital project construction site in Boyce, La.
Jay Marcano for NPR
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Jay Marcano for NPR
Some NDAs used “Project Lightning” for the data center
In Boyce, La., a town of about 1,000 people, some residents complain that the project was kept under wraps until it was too late to halt construction.
So far, fences have gone up and earthmovers are clearing the ground for the project. Initial operations at the facility could begin as soon as mid-2027. The deal comes with a state sales tax break on data center equipment, part of a broader effort by Louisiana officials to compete with other states for AI investment.
At least five state senators, the Rapides Parish assessor and every member of the state-created industrial development board that negotiated the deal signed NDAs, according to documents obtained through records requests.
The contracts, under code names “Project Lightning” and “Project Pixel,” prohibited the release of information to the public.
The project has since been named Delta Forge 1 — a $3.6 billion campus that the state announced will draw 300 megawatts of electricity in its first phase. That’s enough to power roughly 200,000 homes on a summer day, according to data from the U.S. Energy Information Administration.
These are excerpts from the first page of a nondisclosure agreement about the data center project signed by local officials. It was one of several about the project obtained in records requests by the Gulf States Newsroom and Type Investigations. Yellow highlights are by NPR.
Alyson Hurt/Document image and highlighting by NPR
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Alyson Hurt/Document image and highlighting by NPR
Some of the NDAs for the project were signed in December 2024 between Applied Digital and members of a state agency called Louisiana Economic Development.
Other NDAs were signed in January of this year between Applied Digital and the local, state-created board that negotiated the deal. That’s the England Economic and Industrial Development District, or EEIDD. It approved the deal on April 23 in a public meeting with little discussion. The state put out a press release announcing it in May.
Residents speak out against NDAs in a heated town hall
Then tempers flared in June at a town hall held in a hot gym in Boyce that was livestreamed by local resident Shannon McManus on Facebook.
“Our politicians were elected to represent us, not to represent industry,” resident Robert Maddox told the EEIDD, representatives of the company and the crowd, which cheered in response. Others pressed for information on the impact the project would have on water and power resources and the environment.
“We live here,” Robert McLane, the pastor of Cotile Baptist Church in Boyce, said during the meeting. “Our children go to school here. We want to know how it impacts us.”
Officials and company representatives said the findings of an environmental study conducted by a third party showed the impact would be negligible. But when they acknowledged the study wouldn’t be released to the public, attendees responded with jeers and boos, which echoed off the gym walls. “They signed an NDA!” some yelled during the meeting.
The company said the data center will use a “closed-loop system” that would reduce the amount of water the site needs.
“I understand that we’re moving into the future and that we have to have these things,” McManus later told NPR. “And it’s good that we’re gonna have jobs locally, hopefully that happens. But it’s still about not being transparent with the people.”
An entrance at the Applied Digital project construction site in Boyce, La.
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Jay Marcano for NPR
“The information should have been available before decisions were made, not after,” said McManus, a former sheriff’s deputy. He said he and other residents started hearing rumors about a potential project toward the end of last year, but couldn’t find any information. When they tried to get answers, he said, they were met with silence or told the details were confidential.
“NDAs are not illegal,” notes an official who signed
The officials on the receiving end of the anger at the town hall defended the use of NDAs. In an interview with NPR, Ralph Hennessy, EEIDD’s executive director, downplayed the pushback from residents.
“It’s a typical town hall meeting where you have a vocal minority that wants to get up and pump their fists and shout a bunch of half-truths or falses, or whatever,” Hennessy said.
The NDAs were a requirement from Applied Digital, Hennessy said, and the agreements are necessary for economic development. Once it’s complete, the data center is expected to bring more than 1,000 construction jobs and 200 permanent jobs. “NDAs are not illegal, OK? So you’re not gonna change my mind on NDAs,” Hennessy said in the interview. “You can go ahead and change the topic.”
At Louisiana Economic Development, agency secretary Susan Bourgeois said the NDAs are “fundamental for economic development,” allowing Louisiana to compete for private companies.
“The last thing that they want to have happened in the beginning of the discussions, or in any part of the discussion, is for their information that they’re sharing to be disclosed publicly,” Bourgeois said. “So without NDAs, our work, frankly, just doesn’t happen.”
The agreements, Bourgeois argues, make companies more willing to negotiate with local officials and even bring more people into the confidential discussions.
“The irony is that we, we use NDAs not to be more cloaked, we use NDAs to be more forthcoming,” Bourgeois said.
“It just feels sneaky to people,” acknowledges the CEO
But the CEO of Applied Digital acknowledged the problems with NDAs.
“I would love to be able to get away from the NDA part because it just feels sneaky to people,” said Wes Cummins in an interview with NPR. “I totally get that.”
His company generally defers to local officials, Cummins said, on how to loop in the public. “We don’t really dictate that,” he said.
The Applied Digital project construction site in Boyce, La.
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Jay Marcano for NPR
The main reason his company uses NDAs, Cummins said, is securities law. Because Applied Digital is publicly traded, a potential new campus counts as what’s called “material non-public information,” and an NDA protects the local officials involved from unknowingly running afoul of insider trading rules.
“Typically, you’re dealing with people that don’t understand those types of rules,” Cummins said.
But data center deals do get done without them — including in Louisiana.
In nearby West Feliciana Parish, a $10 billion data center is being built. In an interview with NPR, parish President Kenny Havard said economic development doesn’t require nondisclosure agreements — and he chose not to use them.
“I don’t think the NDAs are necessary unless they’re going to bring you in a room and share some proprietary information,” Havard said. “When you’re talking about land sales, tax incentives, those sorts of things that affect the citizens, it should be out in the open. It should be transparency.”
West Feliciana officials posted all of the information about the project on the parish government’s website, including agreements related to water and power usage, land acquisitions, appraisals and a copy of the fully executed deal between the parish and the company.
Residents are still concerned about the project, including how it will affect water supplies, power usage and noise pollution, along with tax incentives given to the company. But they don’t have to wonder what the incentives are, because they weren’t hidden by nondisclosure agreements.
“We’re kind of proud of that, of what we’ve done. We’re proud that we did it without having to sign NDAs,” Havard said. “And I think it just shows that you can do these projects without keeping the people in the dark.”
Drew Hawkins is a reporter for the Gulf States Newsroom at WWNO.
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