Birmingham Nebius Data Center Remains Under Legal Challenge
The proposed Nebius AI data center in Birmingham’s Oxmoor Valley remains under legal challenge after the Birmingham Industrial Development Board unanimously approved a long-term tax-abatement package estimated at about $3.2 billion.
The planned facility, identified by Nebius as the 300-megawatt BHM01 project, is located at 201 Milan Parkway near Lakeshore Parkway. It is not a completed or operating data center, and the pending lawsuits have not been resolved.
Tax package approved in May
The Industrial Development Board approved the incentive package on May 29, 2026. BirminghamWatch reported the package at $3.234 billion in abatements over 30 years, or approximately $3.2 billion.
The size and duration of the package make the project a significant local policy decision. Tax abatements can affect how much revenue a project contributes during the agreement period, while the proposed facility could also increase demand for electricity and water and change the use of industrial land in the Oxmoor Valley.
Nebius projects that the completed project could generate roughly $87 million in annual tax revenue across the city of Birmingham, Jefferson County and Alabama. That figure is a company projection tied to completion of the project and the applicable agreements, not tax revenue already collected.
City adopted new data-center rules
On June 9, 2026, the Birmingham City Council approved 20 new data-center regulations. The rules created a broader framework for how the city addresses data centers, including a project that was already moving through the approval process.
The new regulations did not end the Nebius project. A continuing legal dispute concerns whether the rules apply to the facility and whether related city decisions were valid.
One lawsuit names Lakeshore Data Center, Hoar Construction, Nebius and the city, according to BirminghamWatch. The broader litigation includes multiple challenges from opponents who have raised concerns about noise, environmental effects, water use, power use and public input.
Those issues place the project at the intersection of several city concerns. The facility could bring a major addition to Birmingham’s industrial and technology footprint, but its proposed scale also raises questions about utility demand, neighborhood conditions and how residents participate in decisions about large computing facilities.
Construction timeline is still projected
Nebius says initial commissioning is anticipated in the fourth quarter of 2026, with construction continuing through 2028 as the facility is fully built out. Those dates are the company’s projected schedule, not proof that the data center has reached operation or that construction will proceed without changes.
The next identified court step is a hearing in one of the challenges, which was expected to resume in August 2026. The final outcome of the litigation remains unresolved.
For Birmingham, the case will help determine how the city’s tax incentives, development approvals and new data-center regulations work together. It also leaves residents watching two separate timelines: the company’s proposed construction schedule and the courts’ review of the approvals and rules surrounding the project.
Sources
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