A $16 Billion Oracle-OpenAI Data Center Rejected Twice — Then Sued Its Way to Approval
A small Michigan farming community voted down a massive AI data center — twice. Within two days of the second rejection, the developer sued, threatened a legal loophole that would have stripped the township of any remaining leverage, and walked away with approval. The case shows how US zoning law struggles to hold the line when hundreds of billions of dollars are on the table.
The project
Related Digital, a subsidiary of billionaire Stephen Ross's real estate empire, targeted 230 hectares of agricultural land in Saline Township, near Ann Arbor. The plan: a 21-million-square-foot data center complex financed to the tune of $16 billion, secured in April 2026 alongside Blackstone. The primary tenants would be Oracle and OpenAI — two pillars of the Trump-backed Stargate initiative, a $500 billion national push to lock in US dominance in AI infrastructure.
The township's planning commission said no. Then said no again. Residents weren't enthusiastic about a concrete megacomplex drawing gigawatts of power and, per researchers at U. Michigan's Ford School, anywhere from 150,000 to 5 million gallons of water per day for cooling.
The squeeze
Related Digital filed suit two days after the second rejection, alleging "exclusionary zoning" — the claim that local authorities were illegally blocking development. Township attorney Fred Lucas was blunt: fighting the case in court would cost millions with little chance of winning.
Then came the harder threat. Related Companies indicated it could restructure the project through the University of Michigan. State universities in the US routinely hold immunity from local zoning rules. That single move would have left Saline Township with no leverage whatsoever — and no tax revenue either. The township settled.
The political backdrop adds texture. Stephen Ross's name is on the University of Michigan's business school. A Related Digital vice president is married to Michigan Secretary of State Jocelyn Benson, who is running for governor. Benson's spokesman confirmed her husband recused himself from relevant decisions; no allegations of legal wrongdoing have been made. But as Fortune documents, the concentration of connections is striking.
What the community got
The settlement delivered roughly $14 million in community benefits — water-use restrictions, noise caps, local commitments. The township's annual operating budget is about $1 million, so $14 million sounds significant. Against a $16 billion project, it is less than 0.1 percent. Environmental groups continue to raise concerns about grid strain and the opacity of water-consumption reporting, with no binding transparency requirements in the final agreement.
The project promises 2,500 construction jobs and 450 permanent roles. Whether those numbers hold is, for now, a developer's promise.
