A vacant downtown tower just sold for $235 million. That sounds like good news. It might be. But let’s look a little closer.

You’ve watched your property tax bill climb for years.

You’re not imagining it. Homeowners in Minneapolis now shoulder more than 53% of the total tax burden. That’s up about 6% since 2020, largely because downtown commercial properties lost roughly 22% in assessed value when offices emptied out. That gap didn’t disappear. It shifted. And much of it shifted to homeowners.

So when a $235M data center moves into the old Sleep Number HQ at 1001 3rd Ave. S., the promise of fresh tax revenue feels like a real exhale. But before we pop champagne, let’s ask what we’re trading for it.

Sleep Number’s old HQ was running on about 2 megawatts of power capacity when it left. The incoming data center could require up to 40. That’s not just a renovation. That’s a fundamental change in what that building demands from the city around it.

A data center is essentially the physical home of the internet. Every Google search, every Netflix stream, every AI conversation — it all lives on servers running 24/7, generating enormous amounts of heat. This facility will house thousands of those servers.

It fills a vacant building. It generates significant tax revenue. It brings tech jobs. On paper, that’s a win. The part we don’t usually talk about until later is the infrastructure underneath it.

Here’s what I didn’t fully understand until I dug into this story: those servers produce so much heat that data centers require massive cooling systems. And cooling systems use water. A lot of it. Depending on the design, somewhere between 100,000 and 3 million gallons per day. Per day.

And those systems use chemicals to prevent buildup and bacterial growth. So the question isn’t just how much water. It’s where it comes from, where it goes, and what’s in it when it leaves.

Data centers also rely on diesel backup generators. They’re standard. They’re tested regularly. And during outages, they kick on. That means soot and nitrogen oxide emissions in the surrounding air.

We’ve watched this play out in communities in Georgia, where clusters of data centers contributed to documented spikes in air pollution and light pollution. In some areas, property values quietly softened afterward.

As a real estate agent, that last part obviously piques my interest. But it’s not the only thing that matters. I’m not predicting that’s Minneapolis’ future. I’m saying it happened somewhere else first, and we have the chance to learn from it. The question is whether we will.

You can’t really talk about this in 2026 without talking about AI. AI is one of the major drivers behind the explosion in data center demand. Every AI tool we use requires real computing power. And that power lives in buildings exactly like this one.

There are two conversations happening at the same time that we haven’t fully connected locally. One is about the environmental cost of AI — the energy, the water, the infrastructure that doesn’t show up in your interface. The other is the broader unease people feel about how fast this technology is moving and where it’s headed.

Both are legitimate conversations. Both deserve more attention. This data center is, in a very physical way, where economy, environment, and humanity collide.

Minnesota passed regulations in 2025 requiring data centers to move toward clean power by 2040 and obtain water permits. That’s important. But 2040 is fifteen years away. A lot can happen to air quality, water supply, and neighborhood character in that time.

Suburbs like Eagan recently voted for a one-year pause on large data center construction near residential areas to study noise, water use, and energy demand. Minneapolis is denser and operates under different rules, but the questions Eagan is asking are reasonable ones.

And with more vacant downtown buildings, this probably won’t be the last proposal we see. Minneapolis has never been a city that just shrugs and moves on. We’ve seen neighbors show up, speak up, and influence outcomes. That matters.

So what do you think? Strategic reuse of an empty tower, or something that deserves much closer scrutiny?