Goodman Withdraws AI Data Center Application in Sydney North Shore

Goodman Group, one of Australia's largest property companies, has withdrawn its development application for a data center in Lane Cove, Sydney North Shore. The project, named Project Mars, was intended to operate 24 hours a day, located about 20 meters from the nearest residential area. In a letter to the state planning department, the company stated that it would no longer proceed after considering policy changes and community opinions.

The scale of the project is not entirely consistent: Reuters reported it as AUD 1.2 billion and 90 MW; planning documents mentioned about AUD 800 million and 81 MW, along with a development cost of AUD 443.8 million in the application. The site would require the demolition of existing warehouses on Mars Road. Planning was set to start in March 2025. A total of 374 opinions were received during the public consultation, with only 9 in support, making it the highest volume of opinions against such applications reported by local media.

Residents and the Lane Cove West Public School Parents Committee opposed the project due to concerns about noise, water and electricity load, housing prices, and risks to children. Lane Cove's Deputy Mayor Rochelle Flood called it a victory for the community. Sydney's water and electricity provider Ausgrid expressed concerns about network pressure and risks of electric shock and fire. Last week, during a Senate hearing on artificial intelligence and data centers, Goodman was criticized by lawmakers for ignoring residents, and the company admitted it had not yet obtained "social license." Planning head Guy Smith stated that the withdrawal was due to significant changes in federal and state regulations regarding large data centers.

Australia aims to become a data center hub, with numerous projects on the eastern coast and a simultaneous rise in community backlash. Earlier, a AUD 4.8 million application in Katoomba in the Blue Mountains was withdrawn due to noise, bushfire risks, and proximity to schools. The withdrawal in Lane Cove is currently the clearest example of a large-scale proposal next to suburban residences being blocked by grassroots opposition.

The buying side aims to meet the demand for cloud and AI training in Sydney with cabinets and green electricity; the selling side involves industrial property developers converting warehouses into 24-hour computing facilities. Funds from planned capital expenditures in the billion-dollar range are being returned to balance sheets, and the incremental loads for electricity and water are not yet realized. The driving force behind this event is community opinion letters and council inquiries, rather than electricity prices themselves. Beneficiaries are homeowners near Lane Cove residences and schools; those under pressure are developers and tenants who must relocate to more distant industrial areas or sites outside the state.

Source: Public Information