How Menomonie, Wisconsin Stopped a Secretive $1.6 Billion Datacenter

A secretive $1.6 billion AI datacenter campus collapsed in Menomonie, Wisconsin, after residents discovered that city officials had signed nondisclosure agreements with a Delaware shell company hiding the identity of its Big Tech backer.

The project, pitched by Balloonist LLC on behalf of an unnamed tech giant, would have covered 320 acres outside the city of 17,000 and consumed an estimated 75,000 gallons of water per day — the largest development in Menomonie's nearly 150-year history.

How did the deal stay hidden for 18 months?

The secrecy started in February 2024, when city administrator Eric Atkinson and public works director David Schofield signed one-page NDAs with Balloonist. The agreement, obtained by the Guardian, bars signatories from revealing the tech company behind "the project" — or the agreement's own existence.

A month later, Schofield presented a zoning ordinance redefining "warehousing" to include "the storage, management, processing, and transmission of digital data." The council approved it in April 2024. It's unclear whether members knew they were paving the way for a datacenter.

The council signed a pre-development agreement in closed session in March 2025, with Balloonist agreeing to reimburse the city up to $200,000 for site, environmental and traffic reviews. Councilmember Cody Gentz recalled little substance: "I don't remember having any real information on it, other than you know this is a thing that we might look into."

Councilmember Chad Schlough admitted in an email that he prepped with AI: "I used CHATGPT: Discuss the pros and cons of allowing a datacenter into a small town. CHATGPT is amazing." He told the Guardian the consultants seemed to be probing how members would vote.

Barry Burden, a University of Wisconsin-Madison political scientist, said the playbook is standard: "It's just a few volunteer town board members who are the main gatekeepers."

What killed the project?

Residents learned of the plan only in July 2025, via mailed notices. At an August council meeting, public comment ran nearly two and a half hours. Tim Accola, who lives across from the site in an 1899 former schoolhouse, testified he'd have to sell his home over noise and well-water risks.

Despite the outcry, the council — including 22-year-old councilwoman Sydney Brennan — voted for annexation and rezoning. "I didn't see a way back from that," Accola said.

Opponents then organized. The Stop the Menomonie Data Center Facebook group drew nearly 11,000 members. "It was like a black box to get any information," said organizer Blaine Halverson. "The NDAs with a company nobody had ever heard of really destroyed public confidence."

Mayor Randy Knaack halted the project with a memo calling it "not a suitable fit." In January, the council unanimously passed an ordinance reversing the warehousing definition. Knaack, who lost re-election in April after 16 years in office, said the city was "way in over their head" and that Balloonist's attorneys were "more in control of the process than we were."

Wisconsin's tax incentives let Balloonist seek a sales tax exemption on construction equipment worth potentially millions. "Maybe you get $1m in tax out of these people, which does help but at what cost to the community?" Knaack said. "I understand why the community was angry. I was angry."

How big is the national backlash?

At least $156 billion in US datacenter projects were blocked or delayed in 2025, according to Data Center Watch, run by AI safety firm 10a Labs. Another 45 projects worth an estimated $68 billion were blocked between April and June this year.

More than 500 counties and municipalities now seek to ban or restrict datacenters, per HeatMap. Seattle passed a one-year ban in June; New York Governor Kathy Hochul imposed the nation's first statewide moratorium; Texas Governor Greg Abbott paused new datacenters. In Wisconsin's governor's race, Trump-endorsed Republican Tom Tiffany is branding his opponent "Data Center David Crowley," while primary loser Francesca Hong had campaigned for a statewide moratorium.

"It's going to be a quite difficult issue to navigate for incumbents," said 10a Labs lead researcher Miquel Vila.

Brennan, now in North Carolina, regrets her rezoning vote. Small-city officials, she said, are "left to fend for themselves" — and Big Tech is "very much taking advantage of that."

The project is paused, not dead: Balloonist still owns the land, and new Mayor Matthew Crowe says the company has reached out again. He declined to meet them "to avoid being unduly influenced."