City attorneys urge shelving one ordinance, find ban is legal

The two ordinances suggested by residents to prevent an underwater AI data center off the coast of Eastport and Sipayik have been questioned by attorneys for the City of Eastport, who have advised the city that one of the citizen-initiated ordinances is legally unsound and recommended it be shelved. However, the group opposing the development is already working on new documents.

Citizens opposed to the development of a proposed data center in Passamaquoddy Bay by DeepGreen Western Passage SPV LCC had submitted the two proposed ordinances to the city in the hopes they would be adopted by the city council or added to the November ballot for voter approval. One ordinance attempts to halt data centers by requiring that large‑scale developments be allowed only if approved by voters while the other would ban data centers altogether.

But in an August 5 memorandum from the law firm Rudman‑Winchell, which the city has hired for legal advice, the proposed ordinance on large‑scale projects, titled the Commercial and Industrial Development Ordinance, was called "unenforceable and unlawful." It would require that the city seek voter approval on developments larger than 25,000 square feet on land or 10,000 square feet if underwater.

The attorneys recommend that the city council dismiss that ordinance in large part because the city cannot mandate elections via ordinance. Elections can only be called according to rules put forth in the city charter, a conclusion the attorneys backed up by case law. They also stated that the ordinance "is most likely unconstitutionally vague." Rudman-Winchell recommended that the council decline to place the ordinance on the ballot because it is "legally infirm."

However, a second citizen‑initiated ordinance, the data center ban, was judged "legally sound and enforceable," with some minor formatting changes. That ordinance would ban any data centers from being built in certain areas within Eastport.

Although the attorneys' opinions were requested by the city council, it is up to the full council to eventually accept or reject their recommendations. The council can accept either or both ordinances or send them to the voters, if no substantive changes are made to them.

Birdy Velveteen, a member of the group that had originally put together the ordinances, told the city council during its regular meeting on August 12 that the issues noted by the attorneys had been addressed. She says the group, Eastport Coalition for Healthy Oceans (ECHO), is working to collect the 150 signatures needed to once again start the process of getting a data center ban moving forward.

She also criticized the council for not altering the ordinance itself, noting what she called "the council's resistance to the petition. I hope you guys now do the right thing."

But councillor Karen Raye, who later introduced a moratorium on data center development, pushed back on Velveteen's claim, saying she was in favor of preventing the development. She said she would work hard to ensure any ordinance is as comprehensive as possible.

Council President Billy Boone indicated he, too, was in favor of a ban and asked that everyone work together to achieve it. "There are no enemies in this room. We're all in this together. We all want the same thing. We don't want the data center."

The AI data center project that has so inflamed residents involves a proposed tidal‑powered underwater data center off Eastport's Kendall's Head in the Western Passage by DeepGreen. Residents of both Eastport and Sipayik have been generally united in their belief that such a facility could degrade the underwater environment and hurt the local fishing industry.

The two initiatives were originally submitted to the city in June by ECHO, each attached to enough signatures for placement on the November ballot. The city held a public hearing to gather citizen comments on the suggested ordinances on August 5.

At the hearing, the message was nearly unanimous. According to councillor Raye, "I think the message was loud and clear from the people who were there that they don't want it. And the people who weren't there were obviously not motivated to come."

Raye posted the attorneys' six‑page memorandum to her official Facebook page one day after the public hearing. "I hope sharing the legal memorandum helps the community to continue to follow and understand the process. We will get this done."

At its August 12 meeting, the city council bought more time to get things done by passing a 180‑day renewable moratorium to give the city some breathing room to decide what to do with the ordinances designed to stop the DeepGreen data center.

"I think the whole process is going to go fairly quickly, but it gives me comfort knowing that this moratorium is in place," Raye says. The moratorium "is just a tool in the toolbox. It's meant to protect us while we're working through this process."

That's important because further forward movement by DeepGreen could happen as soon as the Federal Energy Regulatory Commission (FERC) gives the go‑ahead to the company to begin engineering and environmental studies on the project. FERC had cited deficiencies in the original application and paused the request in order to allow DeepGreen to submit additional information, but the company's Louis Wolfson notified the city on August 6 that the requested information has now been submitted. FERC may now begin a 60-day public comment period on the application.

The moratorium will also give the council time to decide whether to amend either of the ordinances. Raye says that in addition to the formatting changes in the data center ban ordinance mentioned by the attorneys, the council may want to review the footprint the ordinance covers.

Currently, the proposed ordinance bans data centers only in the shoreland zone and the B1 zone, which covers the downtown area. "That needs to fixed," she says. "It needs to include a larger area. This needs to be as comprehensive as possible."

Despite the moratorium, time may be the biggest problem facing the ordinances if its backers want to get one or both on the November ballot. There's a short timeframe to get everything done that is required. The ordinances must be reviewed by the planning board, which will then issue a recommendation to the full council, which may either accept the ordinance or send it to the residents to vote on it. At each step, all meetings must be posted for public notification according to strict guidelines. If any of the rules aren't met, the ordinances can't be placed on the ballot, and the next general election where voters could get a chance to vote on either ordinance would be June 2027.

Raye says concerned residents should keep several dates in mind as events move forward. Upcoming public meetings are a planning board public hearing to be held on Monday, August 24, at 6 p.m. in the port authority building to take public comments on the ordinances. The board's resulting recommendation will then go to the city council, which will meet on Wednesday, September 9, at 6 p.m. in the Shead High School gym and make a decision on the ordinances.

Raye says she believes the matter "is moving in the right direction. I think at the end of the day we're going to have an even stronger ban than was anticipated."