The August 17 vote comes as two dozen municipalities move to block data centers, developers sue, and Trenton has tightened rules and paused tax credits after one major award had already cleared.

The East Orange City Council will vote on August 17, 2026, to block data centers, artificial intelligence processing facilities and cryptocurrency mining operations across every zoning district, a measure that would bar the industry outright across the densely populated Essex County city.

The text defines prohibited uses in granular detail, barring what the ordinance terms "facilities running AI training or inference, cloud computing nodes, server farms and co-location sites." It also prohibits any "hyperscale campus of 25,000 square feet or more under common ownership" and operations that "mine cryptocurrency or validate blockchain transactions using Bitcoin, Ethereum or other digital tokens." The ban covers all zoning districts, bars conversion of existing buildings and voids any pending application the city had not deemed complete before July 13, 2026. The city will issue no further permits of any kind for those prohibited uses.

The Municipal Land Use Law requires a public hearing before the council's final vote; the East Orange Planning Board will hold that hearing on August 5, 2026. The August 17, 2026 vote is the last procedural step before final adoption.

East Orange Cites Density, Grid Limits and School Revenue

The ordinance's legislative findings describe East Orange as a densely populated city of roughly 64,000 people, with very limited vacant land suitable for large-scale industrial development. The document also notes that Essex County and North Jersey already face grid constraints, and that regional aquifers serving millions of households could be at risk due to data center development.

The text rejects Payment In Lieu of Taxes programs for data centers, claiming that data center PILOTs would strip funding from local school districts. It also argues that data centers "produce negligible direct employment relative to their physical footprint" — a direct rebuttal to industry job claims that the New Jersey Business and Industry Association and International Brotherhood of Electrical Workers Local 102 have circulated in Trenton.

Towns From Sussex to Gloucester Have Banned Data Centers

East Orange is not an outlier. Pemberton Township passed the first ban on February 20, 2026. Monroe Township, Gloucester County, followed on April 22, and Andover Township on May 28. East Greenwich Township voted to ban data centers in June after months of organized opposition; American Tower withdrew its application on June 9.

"No project, no money is worth tearing a town at its seams," Andover Mayor Tom Walsh said in July. 

NJ Spotlight News found the movement had spread to roughly two dozen municipalities by mid-July, with some bans already enacted and others pending. Jersey City introduced its own ban on July 20, though that measure targets industrial land rather than a citywide prohibition.

The roster now spans from South Jersey to the northern counties — Pemberton and Monroe in Burlington and Gloucester, Red Bank and Asbury Park in Monmouth, Sayreville in Middlesex, Warren Township in Somerset and Andover in Sussex.

The bans have drawn fire from developers. Hexa Builders filed a 20-count lawsuit against Monroe Township in New Jersey Superior Court on June 5, seeking more than $300 million in damages and claiming civil rights violations; the case landed in U.S. District Court in Camden on July 6. The Philadelphia Inquirer reported on August 5, 2026, that Monroe Township has requested dismissal of the suit. On July 10, 2026, National Land Development Corporation went to court to undo Andover Township's prohibition and develop the old Newton Airport parcel.

Trenton Tightens, But One Deal Already Cleared

Governor Mikie Sherrill's May 27 comprehensive plan called for developing statewide community benefit agreement standards to give municipalities leverage in negotiations with data center developers. It also instructed the NJEDA to pause new Next NJ AI applications.

On June 30, the legislature sent Sherrill a bill to halve the NJEDA's Next NJ AI tax credit pool from $500 million to $250 million, which reached her desk that day. She also signed S-731/A-796, the Data Center Fair Share Act, on July 7, 2026. The law puts the burden on utilities to keep residential electricity bills from jumping as data centers expand. Data centers would have to pay for demand cuts elsewhere on the grid before they could draw new power.

A separate bill, S-680/A-1170, which would force AI processing and crypto mining facilities to run on renewable power, was referred to the Senate Budget and Appropriations Committee on March 16, 2026. No subsequent action was recorded on the bill as of early August.

Both branches have tightened the regulatory framework. The NJEDA paused new Aspire applications on July 22, 2026, citing depleted resources. The agency had already backed CoreWeave's $1.8 billion Kenilworth project with a $250 million tax credit drawn from unused Aspire and Emerge funds. East Orange still carries a high-capacity Aspire designation. It caps state support at $120 million and could cover the bulk of qualifying expenses, but the state has stopped accepting new Aspire applications and has not set a timeline for reopening the program.

Violators Face Fines, Jail Time and Liens

The ordinance carries standard municipal penalties: a fine of not less than $500 and not more than $2,000 per violation, or imprisonment for up to 90 days, or both. The penalties escalate fast: a $2,000 ceiling per day means ten days of noncompliance could hit $20,000, with each day counted as its own violation. If "prohibited equipment" goes in anyway, the city can sue in Essex County Superior Court to force it out. TThe city can then recover cleanup costs by filing a lien against the property. Existing buildings cannot be converted or expanded for prohibited operations.

The August 17 vote will leave East Orange with a citywide ban and an Aspire designation that the state is no longer accepting applications for. Other towns with active designations may face the same tension: a ban on the books and an eligibility they can no longer use.

Related Articles

• NJEDA Pauses $500M AI Tax Credit Program Amid Municipal Ban Wave

• NJ Activates Summer Shutoff Protection as Grid Auctions Show Data Center Stress

• Sherrill Unveils Four-Pillar Data Center Plan as Municipal Bans and Grid Pressure Mount

Sources

• City of East Orange, Ordinance No. 26 of 2026, "Ordinance Amending Chapter 51 (Land Use) of the Code of the City of East Orange By Creating § 51-91.1, 'Data Centers and High-Intensity Computational Facilities Prohibited'" (introduced July 13, 2026; final passage scheduled August 17, 2026)

• City of East Orange, Public Notice, Planning Board Hearing on Proposed Amendments to Chapter 51 (August 5, 2026)

• Courier Post, "Developer suing Monroe Township for $300M over ban on data centers" (July 22, 2026)

• GovTech, "After a Data Center Proposal, New Jersey Town Bans Them" (June 12, 2026)

• GovTech, "Data Center Bans Emerge in 4 More New Jersey Communities" (June 22, 2026)

• GovTech, "New Jersey Town Hit With Lawsuit Over Data Center Ban" (July 28, 2026)

• Insider NJ, "Red Bank Bans Data Centers, Calls on New Jersey to Do the Same" (June 11, 2026)

• New Jersey Business and Industry Association and International Brotherhood of Electrical Workers Local 102, "NJBIA and IBEW Local 102 Opposition to A-5165" (June 24, 2026)

• New Jersey Economic Development Authority, Aspire Program, East Orange Designation (accessed August 7, 2026)

• New Jersey Economic Development Authority, Next NJ Program — AI, Program Overview (accessed August 7, 2026)

• New Jersey Legislature, Bill No. S-4390/A-5165, "An Act concerning the Next New Jersey Program" (passed both houses June 30, 2026)

• New Jersey Legislature, Bill No. S-680/A-1170, "Bill Requiring Clean Energy for AI Data Centers and Cryptocurrency Mining Operations" (referred to Senate Budget and Appropriations Committee March 16, 2026)

• New Jersey Legislature, Bill No. S-731/A-796, "Data Center Fair Share Act" (enacted July 7, 2026)

• News 12 New Jersey, "New Jersey pauses program used to dole out tax breaks for AI data centers" (June 23, 2026)

• NJ.com, "The growing revolt against AI data centers just prompted NJ to pause this $500M program" (June 23, 2026)

• NJ Spotlight News, "Towns use home rule to block data centers, a step beyond Sherrill" (July 21, 2026)

• Office of the Governor, "Governor Sherrill Announces Comprehensive Plan to Address Data Center Growth in New Jersey" (May 27, 2026)

• Pemberton Township Council, Ordinance No. 10-2026, "Prohibiting the Construction and Operation of Data Centers within the Township" (adopted February 20, 2026)

• Philadelphia Inquirer, "Monroe Township has requested the dismissal of a $300 million lawsuit" (August 5, 2026)

• Real Estate NJ, "CoreWeave begins $1.8 billion data center project in Kenilworth, landing first award under new EDA tax credit program" (November 25, 2025)

• ROI-NJ, "Jersey City introduces ordinance to ban data centers on industrial land" (July 20, 2026)

• Township Journal, "Developer sues Andover over data center ban" (July 21, 2026)