A developer once planning a $1.2 billion data centre beside a Sydney suburb has stepped back from it, naming a shifting set of rules and the voices of the people who would live nearest to it. The withdrawal is a small moment in a larger story: a country that wants the investment and computing power of artificial intelligence, yet must reckon with the places where that infrastructure physically lands, close to homes and schools. Whether this retreat becomes a pattern or an exception will depend on the national rules still awaiting Parliament and on the inquiry that has only begun to hear eviden
Goodman Group Shelves $1.2 Billion Lane Cove Data Centre After Community Opposition
A developer once planning a $1.2 billion data centre beside a Sydney suburb has stepped back from it, naming a shifting set of rules and the voices of the people who would live nearest to it. The withdrawal is a small moment in a larger story: a country that wants the investment and computing power of artificial intelligence, yet must reckon with the places where that infrastructure physically lands, close to homes and schools. Whether this retreat becomes a pattern or an exception will depend on the national rules still awaiting Parliament and on the inquiry that has only begun to hear evidence.
On Monday, Goodman Group told the NSW Department of Planning that it would no longer pursue Project Mars, a $1.2 billion data centre planned for Lane Cove on Sydney's north shore. The company cited "changes in regulatory environment" and said it had also weighed what the local community had told it.
The three-storey project was smaller than many proposed data centres, but it became a flashpoint all the same. It sat roughly 20 metres from the nearest house and 160 metres from Lane Cove West Public School, and local groups fought it hard while the developer sought state planning approval.
The argument then reached Canberra. At the first hearing of the federal Senate inquiry into data centres and artificial intelligence, residents' groups spoke alongside Goodman's general manager, Ben McGilp. Liberal senator Sarah Henderson repeatedly urged him to withdraw, calling the proposal "wholly unreasonable" and a sign of "contempt for local residents."
Goodman pointed to a shifting rulebook, citing NSW's new fast-track program for qualifying data centres and the Prime Minister's promise that federal rules would reach Parliament soon. Campaigners welcomed the decision as evidence of growing resistance across the country, while industry voices warned that such opposition, along with approval and supply chain hurdles, could push projects offshore. The federal legislation and the Senate inquiry will now determine whether the next proposal near homes and schools meets the same fate.
On Monday, Goodman Group told the NSW Department of Planning that it would no longer pursue Project Mars, a $1.2 billion data centre planned for Lane Cove on Sydney's north shore. The company gave as its reason "changes in regulatory environment", and said it had also weighed what it heard from the local community.
The three-storey project was smaller than some other data centres proposed in Australia, but it became a flashpoint all the same. The site sat roughly 20 metres from the nearest house and 160 metres from Lane Cove West Public School. Local community groups fought it fiercely, objecting to its expected impacts, while the developer sought planning approval from the state.
Last week the argument reached Canberra. Residents' groups appeared at the first hearing of the federal Senate inquiry into data centres and artificial intelligence, alongside Goodman's general manager of developments, Ben McGilp. Liberal senator Sarah Henderson repeatedly pressed McGilp to withdraw the proposal on the spot. She described it as a "wholly unreasonable proposal" that "shows contempt for local residents".
Goodman's statement pointed to a shifting rulebook. "During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly," it said, adding that it had "carefully considered these changes together with feedback received through the planning process, including the views of the local community." Two changes sit behind that language. NSW has introduced a fast-track program for data centres that meet certain requirements. And the Prime Minister now says new federal rules for data centres will go to Parliament by the start of this year.
Sanaa Shah, a senior campaigner with Sweltering Cities who spoke to the Senate committee, told the ABC she was glad to see the project shelved. She called it a clear testament to the large-scale community resistance forming against data centres, something she said her group is observing across the country.
The withdrawal lands in the middle of a difficult balancing act for the federal government, which wants to attract investment from AI companies while calming community concerns about the environmental effects of the facilities. Project Mars is one of a new generation of such developments testing that balance.
Industry is watching the same pressure from a different angle. Last month the consultancy CT group told its clients that local opposition to data centres had become a risk to their development. Advocacy group Data Centre Australia has warned that the country risks losing projects to its neighbours. Its CEO, Belinda Dennett, said the causes are mixed: "Some of that is the approval processes, some of that is supply chain issues, some of that is physically getting in there or social licence issues."
What to watch now is the federal legislation promised for Parliament, and the Senate inquiry that has only just begun hearing evidence. Together they will shape whether the next proposal near homes and schools meets the same fate as Project Mars.
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Politics & Governance