Microsoft has halted plans to build a data center on 244 acres in Caledonia, Wisconsin, after a wave of community pushback that focused as much on process as on environmental impact. The company withdrew its rezoning application for the site, known as Project Nova, only weeks after acknowledging it was the developer behind the proposal.
In a statement, Microsoft said community feedback prompted the reversal and emphasized it remains committed to Southeast Wisconsin. The company will now work with officials in Caledonia and nearby Racine County to identify an alternative location that better aligns with local priorities.
The quick pivot is surprising given the project’s scale. Early design illustrations outlined three data center buildings and a 15-acre electrical substation on farmland west of the We Energies Oak Creek power plant. The Plan Commission had advanced a rezone on September 29, setting up a Village Board vote for October 14. Instead, the proposal is off the table—at least for that site.
Pushback Against Rural Development
A number of factors plagued the potential Caledonia facility. Residents and several local officials described a process that felt rushed and opaque. For months, Project Nova was advanced without naming the sponsor, leaving even some board members to learn Microsoft’s role at the same time as the public. That secrecy, coupled with sparse design specifics and a compressed timeline, hardened opposition. Yard signs sprouted along 7 Mile Road, and more than two dozen residents spoke against the plan at a September meeting.
The proposed site is rural—including working farmland—and critics warned that building industrial-scale infrastructure there would damage the ecosystem. Furthermore, Caledonia residents zeroed in on long-term lifecycle concerns: What happens if a data center becomes obsolete years from now? Zoning that locks in a single-use industrial footprint could leave the village with a difficult-to-repurpose shell.
And with only preliminary site plans available, skeptics said they were being asked to approve rezoning without the detail typically expected for large projects.
Microsoft’s Larger Strategy
To Microsoft’s credit, it listened and altered plans. Several trustees publicly praised the company for stepping back rather than forcing a contested vote. The decision also reflects the company’s larger strategy for data center development.
Microsoft is in the midst of a Wisconsin buildout that doesn’t hinge on Caledonia. Just south, in Mount Pleasant, Microsoft is close to bringing online a three-building campus spanning roughly 1.2 million square feet, with a second phase slated through 2028. Last month the company said it would invest an additional $4 billion in Wisconsin data centers, effectively doubling the Mount Pleasant footprint.
The lesson of Microsoft’s effort in Caledonia seems to be: hyperscale infrastructure is increasingly negotiated community by community. Even in regions eager for tech investment, projects rise or fall on transparency, pacing, and fit. Announcing a code-named initiative, seeking a quick rezone, and promising details later may be acceptable in industrial parks, but it’s a tougher sell on farmland abutting residential roads.
The back-and-forth of the Caledonia project demonstrates that communities aren’t rejecting data center outright. Instead, they’re demanding the same discipline applied to any major utility, including clear ownership, long-term stewardship, and a site plan that matches local values. In Caledonia, Microsoft appeared to have learned something. Wisconsin will still see the jobs and tax base that come with cloud infrastructure—just not at the originally planned location.
