Key Takeaways

  • Chillicothe City Council approved a temporary moratorium after officials and residents said they lacked key details about a proposed data center.
  • U.S. Paper Mill Company LLC plans to include the facility in a broader redevelopment of the former Chillicothe Paper Mill.
  • Electricity capacity, water consumption, utility rates, and property values will shape the city’s review before the moratorium expires on Oct. 23.

Chillicothe officials are pressing pause on data center development while they investigate what a proposed facility at the former Chillicothe Paper Mill could mean for local infrastructure and residents. The City Council passed a 60-day moratorium on Aug. 24, temporarily blocking data center projects while council members gather technical information and public input.

A City Council at-large member introduced the measure. Support for additional scrutiny had surfaced during the Aug. 10 council meeting, when two attendees raised concerns about the proposed facility and two others endorsed a moratorium, according to meeting minutes.

The process exposed an early communication gap. A Chillicothe Third Ward council member said much of the city government learned about the proposal at roughly the same time as the public.

“Myself, the mayor, most of city council, we had no idea,” the council member said. That gap matters. Data center proposals can move from preliminary discussions to utility and land-use negotiations before residents have a clear picture of a project’s physical footprint, energy requirements, or economic contribution.

At the center of the discussion is U.S. Paper Mill Company LLC, which purchased the former paper mill from Pixelle Specialty Solutions in October 2025. U.S. Paper Mill Company LLC is a subsidiary of U.S. Medical Glove and has been developing nitrile medical gloves at the property.

Plans described by the Third Ward council member would turn the industrial site into a multipurpose campus. One portion would support glove production, another would manufacture airplane parts and data center components, and a third would contain the data center itself. Through the Chillicothe Chamber of Commerce, U.S. Paper Mill Company announced partnerships involving Amphibian Aerospace Industries, Inc. (AAI), U.S. Medical Glove Company, Aligned, and U.S. Box Company.

The broader redevelopment carries several employment projections. The glove expansion is expected to create 150 onsite jobs. Aircraft manufacturing is expected to produce between 150 and 200 direct advanced manufacturing jobs and more than 500 indirect jobs. No comparable job estimate has been disclosed for the data center portion, making it harder to evaluate that facility’s individual economic impact.

Data center size dictates nearly every aspect of the local resource calculation. A smaller enterprise facility and a hyperscale or AI-oriented campus can have very different demands for electricity, cooling water, backup generation, and transmission infrastructure. The council noted that the city still does not know how large the proposed Chillicothe facility would be.

That uncertainty arrives during extraordinary growth in computing demand. S&P Global and 451 Research reported that U.S. data-center grid power demand rose 25% in 2025 to about 64.4 GW, with substantial further growth forecast through 2030. Goldman Sachs separately projects U.S. data center power demand will rise from 31 GW in 2025 to 66 GW by 2027. The estimates use different scopes and methodologies, but both point toward mounting pressure on local power generation and transmission.

The International Energy Agency expects data-center electricity use to double by 2030, while demand from AI-focused facilities is expected to triple. For Chillicothe, the practical questions are fairly direct: Who pays for required grid upgrades? Could a large new customer affect residential utility bills? And what happens during periods of peak demand?

Water is another concern identified by local officials. Cooling technology, climate, and workload density can sharply alter a facility’s consumption, so the city will need project-specific estimates rather than broad industry averages. Property values, noise from cooling equipment and backup generators, construction traffic, tax arrangements, and emergency response capacity will also enter the review.

City representatives plan to attend an information conference in Newark to examine how other Ohio communities are approaching data center legislation. Athens has already adopted a year-long moratorium on data center discussions, reflecting broader concern across Southeast Ohio about moving faster than local planning and utility systems can accommodate.

The Chillicothe moratorium is scheduled to expire Oct. 23, although the City Council could amend the legislation and extend it. Before then, U.S. Paper Mill Company LLC and its partners may face requests for clearer projections covering power capacity, water intake, employment, taxes, construction phases, and community safeguards. For developers, the message is straightforward: a credible technical plan and early public engagement are critical factors for securing municipal approval.