Project Skyway refers to an area encompassing approximately 482 acres located to the NE, partially in the City of Pine Island and Pine Island Township. Ryan Companies US, Inc. is a developer working with the city to prepare the land for future development. An Alternative Urban Areawide Review (AUAR) was adopted by the city council which outlined a framework for the development of two potential project types. The link to all of the AUAR steps and components is located on the sidebar. The two studied project types were General Light Industrial and Technology Center.
With the proposal for a data center project in Pine Island under evaluation, the City has created the following webpage to provide information throughout the process. This page will be updated at times, so please check back for new information.
Last updated 11/14/25
A data center is a facility that houses computing infrastructure, including servers, storage systems, networking equipment and other components necessary to store, process and distribute large amounts of data. These centers are critical to the functioning of modern digital services- from cloud computing and social media to banking, medical, and government operations.
Last updated 11/14/25
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The City of Pine Island began communication with Ryan Companies in late 2023 as they were analyzing a specific area of land within Pine Island Township, but adjacent to the City of Pine Island, for development. The potential development nicknamed “Project Skyway” began discussion in mid 2024. In anticipation of potential development, the City coordinated with Pine Island Township to evaluate the feasibility of annexing the property and designate the appropriate Responsible Governmental Unit (RGU) for the environmental study.
In November 2024, the City of Pine Island approached Pine Island Township during their regularly scheduled monthly meeting to start discussions regarding an orderly annexation agreement between the City and Township.
In January 2025, the City of Pine Island attended the Pine Island Township’s regular monthly meeting to finalize details of the orderly annexation agreement.
In February 2025, the City of Pine Island and Pine Island Township each held public hearings during their regular monthly meetings and jointly approved an orderly annexation agreement which included 482 acres for a potential large-scale development. Both entities also entered into a joint powers agreement to have the City of Pine Island serve as the RGU.
March 4, 2025, the City of Pine Island approved the distribution of the scoping environmental assessment worksheet (EAW) and Draft Order for review. The proposed development required mandatory environmental review for the construction of buildings equal to or in excess of the gross floor space thresholds outlined in Minnesota Rules, Chapter 4410.4300, Subd. 14.A. The environmental study conducted was an Alternative Urban Areawide Review (AUAR), which evaluated two scenarios for development: a light industrial and technology campus mixed-use (Scenario A) or a technology campus, including data centers (Scenario B).
March 18, 2025, the scoping document was published on the Environmental Quality Board (EQB) for publication in the EQB Monitor. This initiated a 30-day public comment period where the public could review and ask questions related to the environmental study. The scoping document was also sent to the various required Minnesota State Agencies for comment.
April 9, 2025, Ryan Companies and the City of Pine Island hosted an open house where the public was invited to learn more about the project and the environmental study being conducted.
May 6, 2025, the City of Pine Island accepted the review comments on the environmental scoping document and ordered the preparation of a draft AUAR.
June 3, 2025, the City of Pine Island approved the distribution of the draft AUAR to the EQB.
June 17, 2025, the draft AUAR was published by the EQB on the EQB Monitor, initiating another 30-day public comment period. The draft AUAR was sent to the various required Minnesota State Agencies for review and comment.
July 8, 2025, Ryan Companies and the City of Pine Island hosted an open house for the public to attend and ask questions about the Draft AUAR.
August 19, 2025, Pine Island City Council approved the distribution of the Final AUAR.
September 2, 2025, the Final AUAR was published by the EQB on the EQB Monitor, which initiated a 10-day objection period for Minnesota State Agencies. No agencies objected.
September 16, 2025, Pine Island City Council adopted the Final AUAR.
October 8, 2025, Ryan Companies and the City of Pine Island hosted an open house and City Council listening session for the public to learn more about the project, environmental study, and ask additional questions.
October 27, 2025, Ryan Companies submitted preliminary development applications for phase 1 of Project Skyway.
November 10, 2025 The Pine Island Planning & Zoning Commission held a workshop to learn more about the project and Phase 1 applications.
Last updated 11/14/25
Ryan Companies is evaluating this site due to its proximity to Rochester, Highway 52, and the availability of utilities in close proximity to the proposed development. This area is also identified in the City of Pine Island Comprehensive Plan with a future land use of industrial development.
Last updated 11/14/25
What is the city’s process for development, including land annexation, rezoning, platting, etc.?
The City of Pine Island received its first complete development applications on October 27, 2025. These applications represent the first phase of the development of the AUAR area and is consistent with the technology center uses considered in the development scenarios evaluated as part of the AUAR. However, it is noted that the AUAR evaluated the maximum buildout of the AUAR area which is not currently proposed.
The applications submitted to the City were for a conditional use permit, planned unit development and preliminary plat. Once a city receives applications related to land use, it has 60 days to process those applications per MN State Statute 15.99. The City of Pine Island may extend the timeline by 60 days with written notice to the developer and must state the reasons for the extension.
The proposed project must undergo many reviews and approval steps prior to any development occurring including the following (not in any particular order):
Much of the proposed project area is located outside of City limits. The City has an orderly annexation agreement with Pine Island Township for the land within the proposed development. The developer can request that the project area be annexed into the City of Pine Island conditionally upon approval of the final plat and zoning. City Council would review and approve the request by resolution, and the MN State Office of Administrative Hearings provides an order approving the annexation.
The City’s development process is outlined in the Land Use Regulation (zoning) and the Subdivision Regulations (platting) portions of the city code.
Development and land use applications are reviewed by city staff, engineers, and our city attorney to prepare reports for review by the Planning and Zoning Commission. Most of the applications require a public hearing prior to any votes being held, however some do not. All applications would be considered during public meetings.
After holding the required public hearings and reviewing the information, the Planning and Zoning Commission issues a recommendation on each application to the City Council. The City Council then reviews the submittals with the Planning and Zoning Commission’s recommendation and issues an approval/denial of the application(s).
Where are we at in this process?
The City of Pine Island is currently at the very beginning stages of reviewing the first completed applications. With the first applications being received on October 27, 2025, the City will be reviewing them during the month of November. The applications were also sent to different agencies such as Goodhue County Public Works, utility companies, MnDNR, Pine Island Township, and MnDOT. Currently, the City is planning on holding the first public hearings for the preliminary plat and the preliminary development plan on Tuesday, December 9th before the Planning and Zoning Commission.
Due to the high public interest in this development, the City held an informational work session, with no approvals or voting considered, with the Planning and Zoning Commission on Monday, November 10th. This work session was livestreamed and recorded for anyone to view on the City’s YouTube channel. The work session was an introduction of the project and initial discussion about the applications prior to any public hearings taking place.
What happens if the developer is unable to complete the project due to unforeseen circumstances?
Prior to any development occurring, the developer and City would need to enter into a development agreement (DA). A DA would include safeguards for the City by outlining who is responsible for different costs of the project. It would also include details pertaining to the development, road maintenance and improvements, off-site utility improvements, and much more. A development agreement is typically entered into after the final plat is approved.
Last updated 11/14/25
Was there an environmental review for this development?
The proposed development required mandatory environmental review for the construction of buildings equal to or in excess of the gross floor space thresholds outlined in Minnesota Rules, Chapter 4410.4300, Subd. 14.A. The environmental study conducted was an Alternative Urban Areawide Review (AUAR). Some of the items studied in the AUAR include traffic impacts, noise, air quality, visual effects, review of any rare features in the area of proposed development, potential environmental hazards and water resource impacts.
The Minnesota Environmental Quality Board (EQB) defines the AUAR as “a hybrid of the environmental assessment worksheet (EAW) and environmental impact statement (EIS) review processes. Responsible governmental units (RGU) can use an AUAR as a planning tool to understand how different development scenarios will affect the environment of their community before the development occurs. The process is designed to look at the cumulative impacts of anticipated development scenarios within a given geographic area. The AUAR document uses a list of questions adapted from the EAW form, but provides a level of analysis of typical urban area impacts comparable to an EIS. Environmental analysis information from an AUAR can be used to inform local planning and zoning decisions.”
More information on the AUAR process can be found on the EQB’s website:
Quick Reference-Alternative Urban Areawide Review
Was the City served a lawsuit regarding the environmental review?
Yes, the City received a lawsuit regarding the AUAR completed the development. The City does not comment on pending litigation, however the city is in communication with legal counsel and proceeding with due diligence.
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Two important characteristics of the project as proposed in the Oct. 27th development applications:
The use of water would be utilized for typical office / light industrial domestic purposes. It is estimated that the campus would use a maximum of 152,000 gallons per day or less once the entire project area is built out. To put this into perspective, a residential development in Pine Island of the same size (acreage) would use a comparable amount of water. The developer would be funding the extension of city water/sewer infrastructure to the site, where multiple water meters would be installed to track and charge the appropriate water usage of the development. City water meters can track remotely the usage of water down to 15 minute increments ensuring accurate tracking. Water and sewer charges are determined by the usage at the property, and all city water users are responsible only for the water and sewer that they use.
How much water does Pine Island use per year? How much water is appropriated for use by the DNR? How much water would the data center use?
The City of Pine Island averages 110,000,000 gallons of water per year from all water users. The DNR has permitted the City of Pine Island 166,000,000 gallons of annual water appropriations. The proposed development would not exceed the total annual appropriations. An increase in water appropriations over the current appropriation would require the City of Pine Island to amend its water appropriations permit with the DNR.
An increase in appropriations, including a third water tower, has been built into the City’s comprehensive plan as we have seen steady growth during the past 10-15 years, regardless of whether Project Skyway moves forward or not. An amendment to the water appropriations would require additional studies.
Who is paying for the utility and street improvements?
Ryan Companies would be responsible for funding the extension of water and sewer utilities to the proposed project site. They would also pay the cost of improvements to 195th Ave and 490th Street along the proposed project site.
Last updated 12/3/25
Xcel Energy is the energy provider for this proposed project site. The Minnesota Public Utilities Commission and the State Legislature regulate energy companies and electric utilities. Permits and guidelines regarding energy usage are not reviewed or approved at the city level. The city does not have information regarding the project's potential energy usage at this time.
Xcel Energy presented to the City Council on 12/2/25. The presentation material is linked below.
Last updated 11/14/25
Where would construction traffic be routed?
The City and developer are currently in discussions with MnDOT to determine the routing. The City and developer are strongly pushing for construction truck traffic to avoid White Pines Rd NE and the County Rd 11 roundabout and for the developer to have direct access on/off Hwy 52 to eliminate this concern.
How would this increased traffic impact the city’s infrastructure?
The developer and their traffic consultant, SRF Consulting Group, coordinated closely with representatives from MnDOT, Goodhue County, City of Pine Island, and Pine Island Township during the development of the traffic analysis for the development scenarios. Three coordination meetings were held, allowing each agency the opportunity to provide feedback on the study process, assumptions, and recommendations. A summary of the traffic analysis can be found in the traffic study as part of the AUAR document.
Who is responsible for the roads during and after construction?
The developer would be responsible for improving the roads to the construction site. The City would be responsible for maintaining public roads up to the point of private property. All private property infrastructure would be the responsibility of the developer and end user.
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How much noise would the data center produce? How would this impact the nearby neighborhood?
A potential data center would be required to conform to noise levels consistent with the State of Minnesota noise standards and abide by Pine Island ordinances. The State of Minnesota’s noise rules (Minn. Rules Ch. 7030) establish noise limits by noise area classifications (NACs) based on land use at the location of the person who hears noise.
For the nearby neighborhood, this means that during a one-hour period of monitoring, daytime noise levels cannot exceed 65 dBA for more than 10 percent of the time or 60 dBA more than 50 percent of the time. Nighttime noise levels cannot exceed 55 dBA for more than 10 percent of the time or 50 dBA more than 50 percent of the time. The developer has committed to meeting the state standards noted above.
According to the noise level study conducted in the AUAR, Scenario B (technology campus), the peak Daytime noise level would be 50 dBA, and the peak Nighttime noise level would be 49 dBA. These peak levels were estimated for the nearest residential unit to the development.
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How many local construction workers would be used during site development?
The development would have hundreds of construction workers on site. If multiple phases are constructed simultaneously, we could see upwards of 1,000 construction workers on site during the buildout.
How many permanent jobs would be created?
Currently, the first phase projects approximately 35 permanent jobs.
What would permanent and temporary jobs be paid?
The end user would determine the permanent job pay range. Skilled and technical roles with wages and benefits significantly above city and county averages are anticipated. Qualified local vendors and suppliers are often prioritized and awarded construction and operational contracts depending on capabilities.
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Minnesota has a higher tax rate for commercial development than for residential. Although the equation can be complex, commercial rates are usually twice as high (or more) than residential rates.
New types of commercial development help diversify our local and regional tax base beyond the current mix of businesses and residents. This makes our financial situation more resilient to economic changes.
What, if any, local tax incentives would the data center receive?
Currently, the City has not received an application for business subsidies, or tax incentives for Project Skyway.
It has been determined that data centers do not qualify for a Tax Increment Financing (TIF) district. However, a data center could qualify for a business subsidy in the form of tax abatement. Tax abatement is a tax incentive where a portion of that parcel’s property taxes could be reduced or refunded, subject to state law. Non data center light industrial projects could qualify for Tax Increment Financing and tax abatement.
If the City were to enter into a tax abatement agreement, the City’s policy will only entertain a “Pay as You Go” model. This means the end user would first have to pay their portion of property taxes, and a portion of those taxes could be abated, or paid back to the end user.
However, tax abatement agreements are 100% negotiable and are typically tied to City goals such as job creation and economic growth. Some cities use business subsidies as a tool to ensure new businesses are meeting their job creation goals and to help establish what those positions are paid. If any requirement outlined in an abatement agreement is not met, the business would lose all or a portion of their incentives.
What, if any, sales tax exemptions would the data center receive?
While the State of Minnesota offers a sales tax exemption for qualified data centers, the City of Pine Island does not have input or control over whether or not a qualified data center receives the exemption.
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Land Use
Who owns the land of the proposed development?
The land is currently owned by private landowners. The City does not have involvement in private land acquisitions or its negotiations.
Has the developer proposed any plans for the building layout on the property?
The City has received preliminary development plans from the developer, which include two buildings. These buildings include a 300,000 square foot data center and a 30,000 square foot office building. The locations of these buildings are near the intersection of Highway 52 and 500th St. and proceed southbound along the east side of Highway 52.
The developer's preliminary development plan also includes additional buildings to the east of the initially proposed two buildings, but these are not official buildings submitted to the City as part of the development. Future phases beyond the initial plat would need to go through the platting application process.
How long would it take to develop the entire 482 acres?
The market conditions determine the time it takes to develop the entire 482-acre site. However, a timeframe of approximately 15-20 years has been indicated by the developer. The goal is to start on the south end of the development area and move north, away from residential development, as the project progresses.
Would the data center have water cooling towers?
No, the data center proposed would be air cooled and not water cooled. The City has not approved any industrial water usage for water cooling towers.
What kind of security is required for a data center?
The data center site would be a secure facility with security fencing surrounding the property and gated entrances. The end user determines what additional security they would require, such as security guards.
Air Pollution
What type of air pollution could be caused by this type of development?
Scenario A includes light industrial and technology center uses. Scenario B includes technology center uses. No heavy industrial uses were considered as part of this AUAR. Generally, air emissions associated with light industrial uses are relatively insignificant and the facilities would not require an air permit. Data center uses have the potential to require an MPCA State air permit in accordance with Minnesota Rules 7007.0200 (part 70) or 7007.0250 (state permit). The need for an air permit would be confirmed as the final design develops for future development phases based on specific equipment proposed.
Future projects within the AUAR area would be responsible for determining air permit applicability or exemption determinations based on the equipment to be installed with their project prior to initiating construction.
How many generators are expected to be associated with this project and how would air pollution from the generators be addressed?
Any number of generators would be determined at a later date when a final development is proposed. The use of backup generators would be subject to approval and regulation by the Minnesota Public Utilities Commission.
Light
What type of light pollution could there be?
The development will establish a maximum height for standalone light structures of 40 feet. Light from campus fixtures shall be limited to less than 0.5 foot candles at the property line. All light fixtures must be downcast and cut off fixtures to minimize lights pollution.
Internet Service
Who would provide the internet service to the data center?
The City is unsure who will provide internet service to the end user. We understand residents are concerned about Bevcomm’s service capacity since so many of our residents rely on their coverage to work from home. This concern has been passed onto the developer.
Non-Disclosure Agreements
Has any member of the City Council, Planning Commission, or staff signed a non-disclosure agreement (NDA) related to Project Skyway or its developers?
No one on city council or the planning commission has signed NDAs. Two staff members, our city administrator and deputy city administrator, have signed NDAs.
If an NDA exists, what specific information does it restrict from public release?
The NDAs which were signed cover any information Ryan Companies provides that it “considers confidential and/or proprietary to include, without limitation: (a) trade secrets (whether or not subject to or protected by copyright, patent, or trademark (registered or unregistered); (b) financial information, including pricing; (c) technical information, including research, development, procedures, algorithms, data, designs, and know-how; (d) business information, including operations, planning, marketing interests, and products; and/or (e) the terms of any agreement entered into between the parties and the discussions, negotiations and proposals related thereto.”
Despite (e), the City recognizes that written agreements entered with Ryan will be public and cannot be kept confidential under the MN Gov’t Data Practices Act. The City has made or will make any such agreements and similar project-related documents public.
Why was it necessary to enter into an NDA concerning a public development that directly impacts local taxpayers and infrastructure?
Project Skyway is a private development and therefore city administration has not signed a NDA concerning a public development. The developer required an NDA to protect confidential information required for the initial planning, budgeting, and due diligence efforts.
NDA’s do not protect information being shared which is categorized as public information by the MN Gov’t Data Practices Act such as public infrastructure improvements, applications for development, or any development agreements. All information considered by the City Council has been public information.
How does the City Council reconcile the use of an NDA with Minnesota’s open meeting and data practices laws, which prioritize government transparency?
Minnesota data practices and open meeting laws supersede any NDA that has been signed.
Can I review documents related to the project?
All development concepts, applications, agreements and their corresponding documents will be posted on our website and/or within meeting packets once they are available to the City. All information put before the City Council for votes are published on our city council agendas and within our council packets. To date, the City Council has not approved or denied an application for subdivision or specific development of the land.
Community Impact
Would the data center increase or decrease the value of our homes?
Home values are determined by a variety of factors, including size, location, school districts, and more. Due to these factors, the City cannot determine if home values would increase or decrease. However, the City of Pine Island has historically seen an increase in the value of its homes.
How does this development impact the city financially?
Due to the size of the project, this would have a positive impact on the City financially. The property taxes generated on this project would mostly be collected in the jurisdictions of the City of Pine Island, Goodhue County, and the Pine Island School District. This project would add significant taxable values to these jurisdictions without significant need for municipal services, thus adding revenue without adding the cost. The City is working with the County and financial advisors on tax prediction models related to the potential property.
Are there any other benefits for the community?
The city would have opportunities for business growth in both retail and commercial/industrial sectors and employment opportunities. Any further benefits will be negotiated into the development agreement.
Last updated 11/14/25
