TeraWulf says it will take legal action if Lansing pursues a data center ban.

Days after the Lansing Town Board decided on Sept. 29 to explore a total ban on data centers, TeraWulf CEO Paul Prager issued a response urging town officials to allow the project to move forward. If they did not, he suggested the company would take legal action.

The Ithaca Voice obtained a copy of Prager's Oct. 2 letter to the town, which began by stating he was "disappointed by how far we appear to have moved from what should be our shared objective: responsibly redeveloping the former Cayuga power plant in a way that benefits Lansing."

Since TeraWulf first announced plans in August 2025 to build a data center, the project has sparked a flurry of legal actions and threats. The company previously threatened to sue the town over a proposed land use moratorium, which was later withdrawn. TeraWulf and the Lansing Zoning Board of Appeals were later named in another lawsuit. Lansing resident Lauren Baker filed a petition alleging that Town Board Deputy Supervisor Joe Wetmore misused his office to oppose the data center. Wetmore previously said the petition "has no merit whatsoever."

The data center proposal also became a defining issue in local elections. Other municipalities have passed their own data center bans and moratoriums, citing the fight in Lansing as a motivation.

TeraWulf's Lansing data center is planned for the site of a former coal-fired power plant along Cayuga Lake. TeraWulf, which refers to the project as the Lake Hawkeye facility, aims to construct a 150-megawatt data center that could consume enough energy to power an estimated 180,000 homes per month, assuming each home uses an average of 600 kilowatt-hours a month.

While the town board is interested in exploring a data center ban, Prager says his company does not intend to abandon its plans to develop the site. "I would, however, much rather direct our capital and employees' time toward productive development and meaningful community investment than years of legal proceedings," he wrote.

In response to a request for comment about the data center ban, Town Deputy Supervisor Joe Wetmore said, "If the law is passed, they will not be allowed to build a data center and that will mean they will have to do something else on that property. They are not anywhere close to being far enough along to claim they've got rights established."

While TeraWulf has submitted some planning documents, Town Supervisor Ruth Groff said that "TeraWulf has not yet submitted a complete application."

"Therefore there is currently nothing before the planning board," Groff said.

TeraWulf did not respond to requests for comment. The town board also declined to comment directly on Prager's letter.

An incomplete site plan was first reviewed by the Town of Lansing Planning Board in December. The board noted omissions and inconsistencies in the submission and declined to accept the application.

Prager's Oct. 2 letter addresses some of the concerns residents have repeatedly raised about the data center proposal.

In an August 2025 announcement, TeraWulf described the water intake as "critical infrastructure." Speculation that the data center might use a lake-source cooling system spurred concern among environmentalists and area residents. Since then, TeraWulf has said that describing this piece of infrastructure as critical was a mistake and that the facility won't draw water from the lake. Prager apologized for the mistake in his recent letter.

"Residents and activists seized on that language as a supposed 'gotcha' moment before our site plan application had even been submitted. The suggestion that it somehow exposed our true, undisclosed intentions ignores the engineering behind our closed-loop cooling system," Prager said.

He added that the closed-loop system is reflected in the designs submitted to the town and is used at TeraWulf's Lake Mariner facility on Lake Ontario in the Town of Barker, New York.

To clarify its plans, the company has assured officials that it would use the water intake infrastructure only for dust control. Company representatives have also stated that water for the closed-loop system will come from Bolton Point, the local utility, which also draws water from Cayuga Lake.

In the letter, Prager also wrote that the company is exploring on-site energy generation, with the goal of "generating more electricity than our data centers consume and becoming a net supplier to the grid."

TeraWulf will also not seek any preferential tax treatment, tax abatements or exemptions for its project on Cayuga Lake, Prager wrote.

Critics of the Lansing proposal have pointed out that TeraWulf avoided paying state and local sales taxes on a multibillion-dollar expansion at its Lake Mariner data center, a move that surprised and frustrated local officials there. In response to these criticisms, Prager wrote to the Lansing Town Board that "we will address the [Lake Mariner] history separately."

Prager then asked the board: "What does an outright ban accomplish that a rigorous, evidence-based evaluation of Lake Hawkeye cannot?"

He invited the town board to evaluate and independently verify that its concerns would be addressed, stating that a "prohibition should follow such an evaluation, not replace it."

If the ban were put in place, Prager said, the company has a responsibility to protect its investment. He said he would rather see the planning process for the data center continue, and he suggested that a ban would spur TeraWulf to take legal action.

The letter concluded with Prager proposing a publicly noticed information session at which third-party engineers could address residents' concerns.

"The public would be welcome to observe, but we would ask that the session focus on questions from the Board and its advisers rather than another open public comment period, consistent with the Town's legal obligations," he wrote.