BURGIN, Ky. — When Diane Floyd moved her family from Lexington in 2020, she was looking for something that felt increasingly hard to find — a place where farmland, history and small-town life still shaped the landscape.

Rural Mercer County, home to a rich frontier life history and a few quiet, tight-knit towns dotted across rolling fields, fit the bill. Now, she worries a massive data center could erase that idyllic image almost overnight.

“So many things will change,” said Floyd, 40, of Salvisa. “We’ll switch, suddenly, from this beautiful, rural, historical area of Kentucky to an industrial landscape, and it will happen fast.”

On Tuesday, the Burgin City Council will consider whether to move in the opposite direction from Mercer County and begin the process of annexing the land where a proposed hyperscale data center could be built.

The vote could give new life to a project that appeared increasingly threatened after Mercer County imposed a one-year moratorium on data center construction and advanced stricter rules governing where such facilities can be built. Because Burgin has no planning and zoning body, bringing the property inside the city’s boundaries could create a path for the project that would not exist under the county’s proposed regulations.

The fight unfolding in Mercer County is part of a larger debate taking shape across Kentucky about whether the state’s rural farming communities that are prized for their open landscapes, agricultural heritage and small-town character are the right places for massive facilities built to power the artificial intelligence boom.

For supporters, the proposed data center could deliver hundreds of millions of dollars in tax revenue to a tiny school district and city. For opponents, the price could be measured in farmland, infrastructure demands and the loss of the landscape that makes Mercer County distinctive.

The unusual city-county dynamic has made the proposed project a case study in the competing pressures facing rural Kentucky. While the county is attempting to slow the data center boom long enough to establish rules for the industry, Burgin is considering expanding its boundaries in a way that could allow one of the state’s largest proposed facilities to move forward.

Caught between a city and a county

The proposed development is being pursued by Panattoni Data Centers, which has been considering a hyperscale facility called Project Bluegrass on about 500 acres of farmland in Mercer County.

The scale of the potential project is enormous. Emails and text messages obtained under Kentucky’s open records law and reviewed by the Herald-Leader show that the developer has sought as much as 1.3 gigawatts of electric capacity for the project, although the utility says the load requirements remain subject to further evaluation and planning.

A 1.3-gigawatt facility would rank among the largest proposed data centers in Kentucky by electricity demand, and the economic payoff has helped generate support among local officials and school leaders.

Ben Bradshaw, a Burgin Independent School Board member who works as a lead electric system coordinator for Louisville Gas and Electric and Kentucky Utilities, wrote in a June 20 email that Panattoni had “applied for 1300MW of power for the project in Mercer Co.”

Bradshaw also wrote that, under LG&E and KU’s rates and rules for data centers, the resulting tax revenue for the city and school district could amount to hundreds of millions of dollars over 15 years.

The records show months of communication among school board members and Superintendent Chris LeMonds about the potential project and its financial implications.

In a June 15 email to LeMonds, Bradshaw shared a document associated with PPL Corp., the parent company of LG&E and KU, which operate a 457-megawatt coal, hydroelectric, solar and natural gas power generation station in the county. The email includes talking points about data centers and the utility’s role in their development.

Bradshaw later sent school board members information about LG&E and KU’s data center rules and regulations, along with a social media post from the Data Center Coalition, a national data center industry lobbying group, highlighting tax revenue generated by data centers in Virginia.

“While I do work at LG&E and KU, I’m sharing the resources and information below in my capacity as a fellow school board member and as someone who lives in this community,” Bradshaw wrote. “It’s information anyone can access online. I, like you, care about our community and this district. My family has been here for generations.”

LeMonds subsequently circulated Bradshaw’s information to school district staff, writing that the potential revenue from utility and property taxes “could create opportunities that many small rural school districts and communities can only dream about.”

LeMonds did not respond to requests for an interview.

Bradshaw told the Kentucky Lantern that the information about the project’s power request did not come to him through his employment with LG&E and KU and was publicly available. When asked about his advocacy for the project, he referred questions to LeMonds.

LG&E and KU has said the proposed Mercer County data center is within Kentucky Utilities’ territory and could reach 1.3 gigawatts in total capacity, though load requirements remain subject to further evaluation and planning.

The data center proposal has not, however, been welcomed universally.

During a special Burgin City Council meeting in July, residents packed the room to voice concerns about the potential environmental and land-use effects of the project. The city ultimately did not advance its initial attempt to annex the property.

Now, the issue is back before the council.

Burgin Mayor Joe Monroe said there is no clear consensus on the council about annexation and that he remains split on the question. He understands the argument that data centers are becoming a necessary part of the economy and that they “have to go somewhere,” he said.

But that doesn’t make the tradeoff easy.

“I just hate giving up my farmland,” Monroe said.

What happens if the city says yes?

The question is particularly consequential in Mercer County because of what is at stake beyond the boundaries of Burgin.

The county’s planning and zoning commission has proposed a data center ordinance that reflects concerns raised by residents about the effects of large facilities on land use, infrastructure and the character of rural communities. The county’s one-year moratorium effectively pauses new data center construction while officials consider those rules.

Burgin’s annexation could create a path around both measures.

If the land becomes part of Burgin, the county’s moratorium would not apply to the property in the same way it would to unincorporated areas of Mercer County. And because Burgin does not have its own planning and zoning commission, the city’s regulatory framework is substantially different from the one being developed at the county level.

It’s an attractive project for a small town of about 1,000 residents. Panattoni’s Project Bluegrass proposal could site four facilities across hundreds of acres northwest of the city. It could carry a development value of $1 billion or more, said Brock Tomlinson, a Panattoni senior vice president who addressed attendees at an open house in June.

That creates a peculiar dynamic whereby the county is moving toward tighter oversight of an industry that could place enormous demands on rural infrastructure, while a city within its limits is considering expanding its boundaries in a way that could facilitate the very development the county is trying to regulate.

It is a local-government wrinkle with potentially statewide implications as Kentucky communities compete for data center investment.

Kentucky has already seen proposals for hyperscale facilities in places ranging from former industrial sites to abandoned mining properties. Developers and economic development officials have pitched data centers as a way to repurpose large tracts of land and generate investment, construction jobs and tax revenue.

But the projects also raise questions about electricity demand, water use, infrastructure costs and whether the economic benefits justify converting agricultural or environmentally sensitive land to industrial use.

Those questions are particularly pointed in Mercer County, where the proposed development sits in the heart of Kentucky’s Inner Bluegrass.

The region’s fertile, limestone-rich soils have made it one of the state’s premier agricultural areas, supporting crops and livestock and creating the landscape of rolling fields, stone fences and horse farms that has become synonymous with Kentucky.

Shaker Village of Pleasant Hill, a National Historic Landmark and one of Kentucky’s most prominent historic and tourism destinations, is part of that landscape. Portions of the roughly 3,000-acre property fall within an Industrial Technology zone the county is considering.

Billy Rankin, president and CEO of Shaker Village, said agricultural and historic viewsheds need to be protected if the region is to preserve the character that has made it an international tourism destination.

“If you picture the Inner Bluegrass of Kentucky, you’re going to have certain visions that come to mind,” Rankin said. “You’re going to see the rolling hills and stone fences and the fields of hay. You’re going to see the horses and the crops that are growing and the barns on the horizon.”

Those features aren’t accidental, Rankin said. They are the product of the region’s geology, soil and water resources.

“This is our history; this is our heritage,” he said. “It’s in what you see here when you look out, not just what you see when you look in.”

Rankin said he is disappointed that the data center debate has become part of Mercer County’s public discourse and worries that unchecked development could undermine the very landscape that defines the region.

“This is our history; this is our heritage,” he said. “That’s endangering the identity of Kentucky.”

The debate in Mercer County reflects a broader tension now emerging across the state. Kentucky is aggressively pursuing data centers as AI drives demand for enormous amounts of computing power. Rural communities, meanwhile, are being asked to decide whether their open land, cheap electricity and available industrial sites should be treated as economic assets for an industry that can transform landscapes almost overnight.

In Mercer County, that question has become intertwined with the basic structure of local government. The county has pressed pause. The city of Burgin may be preparing to move forward.

©2026 Lexington Herald-Leader. Visit at kentucky.com. Distributed by Tribune Content Agency, LLC.