Lee County attorney issues cease-and-desist on data center project

(Clarification: The cease-and-desist order is not on Tuesday's agenda as was previously reported. Supervisors will be discussing hiring an outside lawfirm to help navigate economic development issues including data centers and nuclear power projects.)
FORT MADISON – The proposed data center planned for Fort Madison’s east side may have been blocked temporarily as a result of action by the Lee County Attorney’s Office. 
According to Lee County Attorney Ross Braden, a cease-and-desist order was forwarded by email and by certified mail to developer Dustin Wolgemuth on Friday. 
Braden said it’s very early in the process, but he found case law that supported arguments that Wolgemuth hasn’t started construction in earnest, but has only been engaged in site preparation. Braden cited a 2026 case Worthwhile Wind LLC v Worth County (34 N.W.3rd 782) as current court opinions that put Wolgemuth’s project under a county moratorium passed in June. 
The property in question is located on Hwy 61 going up the hill from Fort Madison on the east side of the city on the west side of the highway. The property is made up of multiple parcels, two of which fall into city limits and the rest in county jurisdiction.  
With Lee County having no zoning requirements, Wolgemuth hasn’t had to apply for any permits, and that, according to Braden’s citations, and those provided to Lee County Supervisors and Braden by former Fort Madison Mayor Brad Randolph, is what is making the county put Wolgemuth’s project under the moratorium.  
Lee County Supervisors passed a resolution banning any future data center development, large or small, or any “high density” projects in the county for one year while the county investigates impacts on communities, utilities, and the environment. At the June 16 meeting when the resolution was passed, supervisors said the Fort Madison project wouldn’t be impacted because the project had already begun. But Braden said because Wolgemuth hasn’t had to apply for any permits, the project isn’t vested yet and does fall under the moratorium. 
“I sent him a cease and desist today by email, but I haven’t received a receipt of that yet. I will also be sending a certified copy of the order to him, as well,” Braden said. 
The move doesn’t prohibit Wolgemuth from continuing site preparation but does say any earnest construction of a facility is currently prohibited by the county. 
“Iowa has taken a fairly strong position that this type of development out of zoning corridors is buyer beware,” Braden said. 
“After reviewing this court's opinion, it is my opinion that any data center construction on that property would be prohibited for the duration of the moratorium which was passed on June 16,” he said. 
Randolph had submitted a letter to Braden and the county citing three other cases and an Iowa Supreme Court opinion that said without permits, the project isn’t a vested contruction project, and site preparation doesn’t qualify as construction. 
Randolph cited Board of Supervisors of Scott County v Paaske (1959); Quality Refrigerated Services, Inc v. City of Spencer (1998); and Stone v. City of Wilton (1983) as cases where local governments were successful in stopping projects where site preparation and pre-permit work were in the works when additional zoning requirements were put in place. 
Randolph also cited the Iowa Supreme Court where opinions he said consistently held that preliminary site preparation, grading, and planning costs do not establish a vested right to complete a project.