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August 26, 2026

The NDA Loophole: How Data Center Deals Can Start Before Neighbors Know

Center For Neighborhoods

Louisville just hit pause on new data centers. But here’s the bigger question: what can happen before the public ever knows a project exists?

In August, Louisville Metro Council approved a six-month moratorium on new data centers, a response to nearly 7,000 public comments from residents concerned about noise, water use, energy demands, and what these massive facilities mean for their neighborhoods. That moratorium matters. But it addresses what happens after a project becomes public. It says nothing about what can happen before.


Across Kentucky, neighbors have been learning that their local officials signed non-disclosure agreements (NDA) with data center developers, sometimes months before any public meeting, zoning application, or press announcement. In Boyd County, the judge-executive signed an NDA and acknowledged it only when residents pushed. In Mercer County, the Industrial Development Authority did the same. Residents who showed up to ask questions found that their elected representatives were legally prohibited from answering them.


One resident put it plainly: “You’re starting it off shady.”


Could that happen in Louisville?


Louisville's ethics rules don't cover this


Louisville Metro Government has an Ethics Commission, a code of conduct for elected officials, and financial disclosure requirements that were strengthened in 2022. Those updated rules now require officials to report their property, income sources, business interests, and gifts over $200. The zoning disclosure requirement was added specifically because a Metro Council Member had been found working with a developer behind the scenes to push through a project.


But none of it addresses non-disclosure agreements with private developers. Nothing in the Metro Council’s published policies and procedures prohibits a Council Member from signing an NDA before negotiations become public. Nothing requires pre-development disclosure, a notification to the public or fellow Council Members that a developer has approached an elected official about a project.


That is not a criticism of the people currently serving. It’s a gap in the rules they’re operating under.


The 2022 disclosure rules are backwards-looking. You report annually what you own. There’s no requirement to say anything before you sign.


What “no rules” actually means


When no rule exists, the outcome depends entirely on the individual official’s judgment. Some will decline NDAs. Some will sign them. Some will ask an attorney; others won’t think to. The public has no way to know, and no mechanism to find out, until a project is already far enough along that the developer is ready to go public on their own terms.


For communities that have already experienced decisions made without them, this matters in a particular way. West Louisville and South Louisville have both seen what happens when development moves without resident voice: projects announced rather than negotiated, plans presented rather than co-created, the people most affected finding out last. NDAs in this context aren’t just a transparency problem. They’re a power problem. They concentrate early information, and early influence, in the hands of the developer and whoever they’ve chosen to approach privately.


There's a bill in the works


State Senator Keturah Herron has been working on this at the state level. Her bill would prohibit local officials from entering into non-disclosure agreements with data center developers. It didn’t receive a hearing in the last legislative session, but she plans to reintroduce it in January 2027. That bill is worth tracking and worth supporting.


And Louisville Metro doesn’t have to wait for Frankfort.


The Metro Council could update its own ethics ordinance to require pre-development disclosure, a requirement that when a developer approaches an elected official about a project, that contact be disclosed before any agreement is signed.


The moratorium created a window.


What gets built inside it is still being decided.


What you can do now


1.       Ask your Metro Council Member directly whether they have signed any NDAs with data center developers, and whether they would support a pre-development disclosure requirement.


2.      Track Senator Herron's bill when the 2027 legislative session opens in January. The Kentucky Lantern and Louisville Public Media have been covering this closely.


3.      File an open records request with Louisville Metro if you want to know what communications have taken place between Metro offices and data center developers. Kentucky’s Open Records Act covers most government communications, and NDAs between a developer and a private official in their personal capacity may be a different matter, which is itself part of the problem.


Center for Neighborhoods works to connect people to create great neighborhoods across Louisville, with a community development focus on West and South Louisville. This post draws on reporting from Louisville Public Media and the Kentucky Lantern.

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