A Clear Look at the Proposed Data Center in Sioux Falls

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Over the past several weeks, our team has received a wide range of questions and comments regarding our site near Veterans Parkway and E. Rice Street, which received approval of a rezone application to light industrial. This rezoning was a necessary step to develop any type of industrial project on the site, whether it be a data center or light manufacturing. 

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Many of the questions and concerns reflect understandable curiosity about large infrastructure projects, while others stem from examples shared from very different regions using older technology with very different regulatory frameworks.​ This page is intended to provide a clear, factual overview of how data center projects are planned, reviewed, and regulated in Sioux Falls and South Dakota, and how that applies to this project. It is not intended to persuade everyone, but to ensure that discussions are grounded in facts.

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We welcome thoughtful questions and debate but will not engage with personal attacks, hateful rhetoric, or discriminatory language.

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Not All Data Centers Are the Same

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Data centers vary significantly based on location, design, scale, cooling approach, and local infrastructure. Many of the examples circulating online come from very different contexts, such as dense suburban areas in parts of Virginia, water-constrained regions in the Southwest, or places with utility and regulatory systems that operate differently than South Dakota.

Climate, water availability, population density, utility structure, zoning, and local oversight all play a material role in how projects are planned and integrated. For that reason, data center proposals must be evaluated based on local facts, rather than headlines from projects in very different markets with significantly different underlying details.

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Electricity Use and Rates in South Dakota

In South Dakota, projects similar to Gemini's are required to fund the substations, transformers, and transmission upgrades needed to serve them, rather than spreading those costs across existing customers.

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Power capacity and delivery timelines are studied and agreed to in advance as part of the approval process, with oversight from the South Dakota Public Utilities Commission. Claims that a project could quietly increase its power use later are not accurate. Any increase in electrical load requires new equipment, coordination with the utility, and additional approvals, which take time and are regulated.

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Utilities manage outages and system reliability using established operating rules that prioritize residential customers and critical community services. Large facilities do not receive special outage priority, and power is not redirected away from homes to serve them.

Like other large facilities, data centers use backup generators for emergency situations. These systems are subject to permitting and operational limits and are not used as a primary power source.

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Water Use and Cooling

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Public discussions about water use often rely on older assumptions that no longer reflect how modern data centers are designed and operated.

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Today, most new data centers use closed-loop and air-assisted cooling systems that reuse water rather than consume it continuously. Cooling is focused directly on heat-generating equipment instead of entire buildings, which significantly improves efficiency. South Dakota’s climate further reduces water demand by allowing greater reliance on air-based cooling for much of the year.

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Importantly, projects only move forward when local utilities confirm that projected water needs can be supported responsibly by existing infrastructure and long-term planning. If water demand cannot be accommodated without impacting other users, approvals are not granted. With respect to Gemini's project, any future end user would strictly be limited to using water for "domestic use," which is similar to the type of water an office building utilizes for bathrooms, kitchens, and other non industrial uses. 

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Jobs, Taxes, and Economic Impact

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Data centers aren’t labor-intensive like factories, but they still bring long-term value to a community.

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During construction, projects support a range of skilled local work, including electricians, mechanical contractors, concrete crews, HVAC, and other trades. Once operational, staffing needs are smaller and focused on specialized roles such as facilities operations, electrical and mechanical maintenance, network operations, security, and IT support.

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Operational roles are on-site positions that support the facility day to day and are filled locally, consistent with how similar facilities operate in the region.

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The longer-term value comes from permanent investment in the site and ongoing tax contributions, without the traffic, emissions, or service demands that come with heavier industrial uses. That is why many Midwestern cities have chosen to include data centers as part of a balanced mix of development.

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Location, Zoning, and Site Context

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Projects like this are built in industrial areas, not residential neighborhoods, which is intentional. Data centers require access to large amounts of power and utility infrastructure.

Previous to Gemini's ownership of the site, the City of Sioux Falls had already earmarked the area near Veterans Parkway and East Rice St. for future industrial use. Industrial use fits well within what already surrounds the project site, including Xcel Energy's Splitrock substation, Angus-Anson peaking plant, multiple high-voltage transmission lines, and local distribution lines. 

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Modern data centers are enclosed, low-profile buildings with finished exteriors, setbacks, landscaping, and screening, rather than exposed or open-air industrial equipment. Once built, they are low-traffic and operate quietly compared to many other industrial uses.

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Why Data Centers Matter

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Data centers are woven into everyday life, even if most people never see them. They support systems we rely on daily, from banking and healthcare records to emergency response, navigation, education, and basic communication.

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It’s reasonable that infrastructure of this scale can feel unfamiliar or even daunting. That uncertainty does not change how fundamental these systems have become to modern life, or how important they are to the future of the country.

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Not long ago, much of this infrastructure barely existed. Today, it forms the foundation of how society functions. As technology grows and evolves, so does how communities plan for it, set rules around it, and learn how to live alongside it. Those relationships improve over time through experience and patience.

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Keeping critical digital infrastructure located within the United States helps strengthen reliability, oversight, and resilience, and reduces reliance on systems beyond our control.

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Moving Forward

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It’s reasonable to ask questions about large projects like this. What matters is understanding them in the context of local conditions, how they’re reviewed, and how they fit into the community over time.

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That’s the approach we’re taking here. We appreciate the conversation and remain focused on responsible development and being a constructive, long-term presence in Sioux Falls.

For additional information, please visit the FAQ section of this site.

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Thanks for taking the time to engage.

 

Sincerely,

Gemini Family Office

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