Holly Springs, NC, August 23, 2026 — Holly Springs can adopt rules governing where and how data centers operate, but it cannot simply prohibit them from locating in town, Town Manager Randy Harrington told the Town Council during last Tuesday’s town council meeting.
The clarification comes two months into a 12-month moratorium on new data center applications. Council unanimously approved the pause on June 16th, stopping the acceptance, processing and approval of applications while the town studies whether its existing development rules are adequate for today’s data centers.
The moratorium applies to data centers, cryptocurrency mining operations, data processing facilities and related uses within town limits and Holly Springs’ extraterritorial jurisdiction. It took effect June 17th and runs through June 16, 2027, though the town could lift it earlier if it adopts new regulations.
No data center development was under review when council approved the moratorium.
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Town can regulate, but not prohibit
Harrington told council Tuesday that North Carolina law limits how far Holly Springs can go once the study is complete. The town does not have the authority to exclude a particular type of legal business unless the state has specifically given municipalities that power.
“In North Carolina, the way North Carolina law works is that you do not have that authority to say and pick and choose which businesses can or can’t come to Holly Springs, unless the state has said they give you some authority to do that,” Harrington said.
Instead, Holly Springs can use its development regulations to establish standards governing data centers that seek to locate in town. That could include requirements on location and compatibility with surrounding development, as well as impacts such as water and electricity use, backup power generation, noise, and traffic.
Holly Springs has defined data centers in its development ordinance since 2011 and updated that definition in 2020-21. When the moratorium was adopted in June, town staff said today’s facilities can place significantly different demands on water and electricity than the data centers contemplated when those rules were written.
Mayor Mike Kondratick described the town’s approach when council approved the moratorium in June.
“We’re pressing pause,” Kondratick said. “We’re taking a moment to assess and evaluate the impact on our residents and the impact on our resources and make sure we have the right policies in place.”
Study expected to take months
The town’s Land Use Advisory Committee is reviewing data center regulations and practices in other communities while gathering input from residents and other stakeholders. Issues under review include water consumption, electricity demand, backup power, noise, transportation, and compatibility with nearby neighborhoods.
Residents who spoke during the June public hearing largely supported the moratorium. Their comments included concerns about water and electricity demand and questions about whether the economic benefits of data centers would offset the demands the facilities could place on local resources.
Town staff estimated in June that research and community engagement would take about eight to nine months. Any proposed changes would then have to go through the town’s process for amending its development ordinance.
That timeline could take the work close to the June 2027 expiration of the moratorium. The pause does not have to remain in place for the full year, however, and could end earlier if council adopts new regulations before then.
Town launches data center information portal
Holly Springs has also created an online data center portal (link) with information about the moratorium, the town’s review and a way for residents to submit comments.
Council members asked Tuesday how much traffic and public engagement the portal has received. Communications and Marketing Director Cassie Hack did not have those numbers available during the meeting and was expected to provide them afterward.
Harrington did not give council a date for when the Land Use Advisory Committee will complete its work or when proposed data center regulations could come back for consideration.