Thor Equities has filed a federal lawsuit against the City of Urbana, Urbana City Council, and the city’s Building and Zoning Appeals Board, marking the latest development in the ongoing dispute over a proposed data center campus on the city’s south side.
The lawsuit was filed Friday in the United States District Court for the Southern District of Ohio and seeks to preserve the company’s ability to move forward with a project planned on approximately 230 acres south of State Route 55 and west of U.S. Route 68.
The filing comes just days after Urbana City Council voted unanimously to reverse zoning changes that had allowed data centers within the proposed development area. The city also enacted a 12-month moratorium on new data center development earlier this year.
According to Thor Equities, the company worked with city officials for more than a year on the project. During that time, the city annexed the property, rezoned it for manufacturing uses, and amended its zoning code in April 2025 to specifically permit data centers.
Thor says it relied on those actions when investing more than $19.6 million into the project, assembling approximately 230 acres of land, and submitting a site plan application in February 2026.
The company alleges Urbana improperly denied its application and later enacted the moratorium after significant public opposition emerged. The lawsuit argues that the city’s actions, as well as the subsequent appeal process, violated provisions of the city charter, zoning code, Ohio law, and constitutional protections.
Thor contends the project would provide substantial economic benefits to the community, including an estimated $3 million annually for the city’s budget and approximately $2.8 million in new tax revenue for local schools. The company also maintains the facility would have a limited environmental footprint and disputes concerns raised by opponents regarding water usage, noise, and potential health impacts.
The proposed development has faced organized opposition from residents since plans became public earlier this year. Opponents have expressed concerns about the project’s potential effects on nearby agricultural land, local infrastructure, and the Cedar Bog Nature Preserve.
In March, Urbana approved an emergency 12-month moratorium on data center development. Earlier this week, council members voted to repeal zoning changes that had previously permitted data centers in the area targeted for the project.
Thor stated it remains interested in developing the project and hopes the legal process will allow it to proceed.
The City of Urbana said Friday that officials had not yet reviewed the federal court filing and would not comment until they had an opportunity to examine the lawsuit.
The federal case follows an administrative appeal filed by Thor earlier this year in Champaign County Common Pleas Court challenging the city’s handling of the proposed development.
