The Commerce Secretary and the Unprecedented Revolt Against Data Centers

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Lee Lilley, North Carolina’s secretary of commerce, is wrapping up a walking tour of downtown Wilson with local officials, business leaders, and the media. It’s sunny and heat stroke-inducing hot–an Eastern North Carolina raw, humid hot that should mean no suits, let alone ties, especially for someone who grew up on a farm nearby and should know better.

Yet there stands Lilley, all 6-foot-3 of him, fit, trim, well-groomed, and somehow staying dry in a dark suit and bright tie. He even shows off his lefty baseball swing at Wilson Ballpark, a just-opened $70 million brick stadium that’s an architectural rival to Durham’s larger minor league edifice. 

Lilley, 42, loves being in the Ballpark. But the former high school third baseman and outfielder is not out for fun in the sun on this day in May. He’s here to discuss Gov. Josh Stein’s new “First in Opportunity” economic plan. 

It’s designed to boost rural communities. From beaches to mountains, Wilson and so many other communities have been left behind in so many ways–jobs, technology, population growth, health care–while the Triangle, Triad, and Charlotte regions have flourished. Lilley believes their plan will be a home run and that Wilson, a former global tobacco hub of some 50,000 residents, is the ideal place for its unveiling.

Lilley could just as easily be talking about his hometown, 60 miles east in Williamston, where average wages of $38,000 are half that of Wake County. Williamston’s population is down to just over 5,000 from a peak of nearly 7,000 in 1960, according to the U.S. Census. It’s the seat of government for Martin County, one of 40 the state ranks as “economically distressed.” 

A reporter throws him a curveball and says it must be nice to be someplace where the questions aren’t about data centers. 

“Not at all,” Lilley responds. “We take all questions.” Then the secretary slides quickly like any astute politician (he spent several years as the lobbyist for two-term Gov. Roy Cooper) back to his reason for visiting: “We’re here talking about the North Carolina economy and what’s happening in Wilson.” 

Big news items include not just the new ballpark but two Johnson & Johnson pharmaceutical plants worth billions and nearly 1,000 new jobs. “There’s a lot happening in North Carolina, and we’re here to support all those things,” he says.

It’s a solid hit of an answer, but there’s no avoiding the state’s dilemma about data centers. In more than 20 communities across the state, residents have objected so strongly to new data centers that their elected officials have issued a moratorium on their development.

North Carolina already is home to 96 data centers, both existing and under construction. Operators include giants such as Amazon, Google, Apple, Microsoft, and Meta. Most of the centers are clustered in metro areas: Charlotte has 35, the Triangle 18, and the Triad 13, followed by eight in Hickory, six in Maiden, and two in Rocky Mount.

Tech companies need more of these centers to store and manage the huge volume of digital information that runs our computers and phones. The centers pay good salaries, but they consume massive amounts of power and water, and generate noise complaints. 

The state has rarely seen this kind of economic development debate; even new prisons and jails have generally been welcomed in rural areas. “This is unique in my almost 50 years living in North Carolina,” said Michael Walden, a longtime economist at North Carolina State University. 

That leaves Lilley having to balance the need for jobs with the political reality of grassroots rebellion. 

Playing Switzerland

Lilley’s parents, Laurence and Claudia, attended the University of North Carolina at Chapel Hill, earning degrees in business and education, respectively. Laurence and his younger brother, Jim, own Lilley International, a provider of farm and truck vehicles and services that their father founded in 1953. The company maintains operations in four cities, including Raleigh.

Lee was interested in current events and history. “He was always reading encyclopedias,” said Claudia, a retired special education teacher. Laurence noted that Lee “had a natural curiosity about things” that led him to pursue a liberal arts education at UNC-Chapel Hill, and that he was “very competitive” when it came to sports.

Lilley remembered his high school baseball days with pride. “We made it to the state championship game twice,” he recalled. Sadly, no championship. He now lives in Raleigh with his wife, Lyric Thompson, founder and CEO of the Feminist Foreign Policy Collaborative, and their 4-year-old daughter Helen. 

“He’s unflappable. You can throw anything his way, and he keeps a cool head.”

Sadie Weiner, former senior staffer for Roy Cooper and Josh Stein, on Lee Lilley

Lilley earned his political spurs straight out of college in 2007 by working in Washington, D.C., as a legislative liaison for U.S. Rep. G.K. Butterfield, who represented parts of Eastern North Carolina from 2004 to 2022. Next came a lobbying job with the powerful consulting firm McGuireWoods. Then came fireworks.

When Lilley joined the Cooper administration in 2018, WRAL labeled him as “a former lobbyist for the oil and gas industry” whose clients included a major stakeholder in the  Atlantic Coast Pipeline project involving Dominion Energy, for whom Lilley had lobbied. 

Cooper had just approved the project. That became a huge point of debate in a Republican-led hearing–described by one Democrat as an “ambush”–just days after Lilley went to work for Cooper as his legislative liaison. 

“I specifically remember thinking not only that he handled it well, but that Republican lawmakers would be impressed by it and that it would be meaningful for his relationships with them going forward,” said Travis Fain, who covered politics for WRAL at the time. 

Lilley persevered and was given more responsibility. In 2020, Cooper tabbed him to serve as director of economic and pandemic recovery. “He is incisive without rushing to judgment, which helped keep everyone on the team focused,” said Sadie Weiner, a former senior staffer for Cooper and Stein. “And he’s unflappable. You can throw anything his way, and he keeps a cool head.”

When Cooper hosted the Japanese prime minister in 2024, the American ambassador to Japan had to depart in the middle of lunch, Weiner recalled. Protocol dictated that there be no empty seats at the table, so Lilley was chosen to join the head table.

Lilley still savors that moment. He pointed out a photo of him at the table with Cooper and the Japanese delegation that now sits in his office. Lilley said with a smile: “He probably knew I’d keep my mouth shut.”

After Stein was elected governor in 2024, he nominated Lilley for commerce secretary. The state Senate approved him unanimously, a sign of things to come.

“When people overseas or elsewhere ask about our state’s politics, I say we’re purple–right down the middle,” Lilley said. “So we get to play Switzerland a lot. And I like that. I like that we can get to be the place where Republican legislators call me and say ‘I want to set this up for my community, and we say ‘Great!’”

Rep. Stephen Ross, who has represented the Alamance County area since 2013, is among the Republicans pleased with Lilley’s performance so far. 

“Lee is one of the most, if not the most, responsive commerce secretaries I’ve seen,” Ross said. “He’s very professional, knowledgeable and a pleasure to work with. A lot of people in government don’t know what they are doing. He always knows.”

Big Assignments

Stein has also broadened Lilley’s portfolio, making him a key driver of Hurricane Helene efforts. “We meet weekly as a cabinet, and the governor insists that the first item of discussion is Helene,” Lilley said. “Every week.”

Weiner said, “The governor continues to hand big assignments to the Department of Commerce–hurricane recovery, housing, workforce, AI.”

The Commerce Department employs hundreds of people across multiple areas of economic responsibility, from tracking employment data to handling various grants and workforce initiatives. 

The plan Lilley outlined in Wilson sets out four strategic goals: modernizing infrastructure; accelerating economic competitiveness and innovation; enhancing community well-being; and building a resilient, future-ready workforce.

“We wanted to start here,” he said, because Wilson has the right ingredients and can serve as an example for other communities. 

Over the past two months, though, opposition to data centers only grew. Three multibillion-dollar projects were canceled, including a $19 billion project planned for nearby Edgecombe County. 

At a recent Edgecombe commissioners meeting, resident Vinson Bridgers opposed a data center, citing a proposed center’s demand for water and electricity. He said power companies could be forced to ration energy. 

“Have you ever tried to sleep in a room at 80 degrees and then get up at 6 a.m. and go to work?” he said, according to the Rocky Mount Telegram. “This can happen here.”

Lilley said then that he didn’t see data centers as an unsolvable problem. 

“If a local community wants to host a data center, and they’ve got the water and the power, we’re here to help with workforce,” he said. “We’re here to help with infrastructure. We’re here to help make an economic opportunity a reality for that community.”

Nonetheless, Stein has outlined plans to end tax subsidies for such projects sooner than their current sunset in 2032, which could amount to more than $3 billion in revenue for the state. 

The governor is not alone in his skepticism for these tax breaks. The General Assembly’s recently passed budget (signed into law by Stein) eliminates sales tax exemptions for electricity used by data centers. The centers have received, on average, up to $50 million per year in sales tax exemptions for electricity and replacement equipment. 

So far, Lilley says local opposition to the centers hasn’t dampened economic development. “Our pipeline remains healthy,” he said through a spokesperson. 

“Have you ever tried to sleep in a room at 80 degrees and then get up at 6 a.m. and go to work?”

Vinson Bridgers, Edgecombe resident and data center opponent

But the debate seems to hang over the state like a dark cloud that could explode into a thunderstorm powered by NIMBY–Not In My Backyard. An Elon University poll of North Carolinians in March found that 44% opposed a data center in their community, with 24% in support and the rest undecided. 

Walden, the economist, said the pushback could have a negative impact on the various “best states for business” rankings from publications like Site Selection magazine that follow economic development. 

“Regions strongly compete for businesses and jobs. North Carolina has been at the top of the winners for economic development in the last 50 years,” Walden said. “But access to artificial intelligence will increasingly be a factor considered by businesses seeking locations.”

According to John Boyd, one of the nation’s top site development consultants, winning data center projects helps build momentum for the companies that rely on their services.

“They are totally worth the effort,” he explained. “Beyond the sheer numbers in construction and operations, these data centers will be a catalyst for the attraction of other high-paying tech sectors that will be reliant on artificial intelligence applications.”

A mitigating factor could be that data center opposition has spread across the country. “It will be vital for North Carolina to follow the discussions in other states,” Walden said.

Lenoir Likes Google

Incentive programs designed to recruit data centers date back to when Google opened North Carolina’s first in Caldwell County in 2007, a site that employs 400 people. 

In terms of raw numbers, the tax breaks for that center have paid off.

In May, Google disclosed plans to invest $1 billion in a huge expansion. It secured a 20-year package of tax incentives in 2024, Business North Carolina reported. The number of jobs that will be added to the existing 400 at the site wasn’t disclosed. To date, Google said it has invested $4 billion in Lenoir, which is happy to have the center.

“This [new] funding will enhance our workforce, expand economic development opportunities, and ensure North Carolina remains a leader in innovation,” Mayor Joseph Gibbons said in a release. 

Charles Hayes, who served as CEO of the Research Triangle Regional Partnership for 20 years, said a phaseout of tax breaks might not curtail projects.

“I don’t think that a lot of data centers are looking for subsidies,” he said. They want to locate in the state for the traditional reasons: business climate, workforce quality, and the availability of land, power, and water.

Hayes pointed to Amazon’s recent announcement of a $10 billion investment in a 20-building data complex in Richmond County that does not include state funding. Amazon did negotiate a 20-year tax package with the county that includes a 50% property tax reduction and 65% reduction in taxes paid on such things as equipment, if investment targets are met. 

The Economic Development Partnership of North Carolina works with the state Department of Commerce to recruit businesses. CEO Christopher Chung said he believes the state can weather changes in data center subsidies.

“States across the country regularly review, update, and modernize the policies that govern how they work with private sector companies, and North Carolina is no different,” Chung said. “We remain confident that North Carolina will continue to offer one of the strongest business climates in the country.”

Stein’s statewide economic plan, released this spring through his Commerce Department, seeks to address local concerns. It calls for developing a toolkit for local governments to evaluate the economic and environmental implications of data centers, including infrastructure needs and utility requirements.  

If North Carolinians oppose data centers, what will they think about a center focused on quantum computing–the perceived “next big thing” in tech that could take artificial intelligence to new levels?

For example, a new project worth perhaps as much as $50 billion is looking for a home. Commercial real estate and investment giant JLL, which has a big presence in North Carolina, and Qlocity, which focuses on the fast-emerging field of quantum computing, have said they want to build a state-of-the-art campus in the southeastern United States. 

The JLL team has looked at a 400-acre campus in Research Triangle Park that once served as a home for IBM, The Assembly has learned. Neither Lilley nor the Economic Development Partnership would comment about the project, but Boyd did.

The local pushback, he said, is largely irrelevant. “The overriding site selection drivers are access to intellectual capital, available real estate, and a business-friendly state government,” he said, “all of which speak to North Carolina’s strengths.”

In the Trenches

The Commerce Department publishes a continuously updated scorecard for jobs and investments across the top of its website. And so far this year, North Carolina is generating more business compared with the same period in 2025. 

A huge surge at the end of last year sent state economic development numbers to record levels, capped by the 14,500 jobs JetZero promised to build a passenger jet factory in the Triad.

“It’ll be a push to beat 2025,” Lilley said. But he’s confident records can fall again.

One area in which North Carolina did fall short–just barely–was in this year’s “America’s Top States for Business” ranking by CNBC. Ohio claimed the top spot in July, edging out the Tar Heel State. Declines in quality of life and cost of living metrics hurt North Carolina’s performance. 

North Carolina had claimed the top spot in three of the previous four years, powered by what CNBC has labeled as the nation’s leading workforce development system. NCWorks, a program in the state Commerce Department, is part of that system; it connects job seekers and employers through career centers and customized training. North Carolina’s community college system also emphasizes job training. 

CNBC also praised North Carolina’s rapidly growing talent pool fueled by people moving into the state. Costs of operating a business are low due in part to the state’s 2% corporate tax rate, the lowest among the 44 states that have the tax, according to the nonprofit North Carolina Budget & Tax Center.

“We remain confident that North Carolina will continue to offer one of the strongest business climates in the country.”

Christopher Chung, CEO of the Economic Development Partnership of North Carolina

The CNBC data shows Lilley has a solid hand from which to negotiate future deals. And deals appear to be coming. The Economic Development Partnership says more than 200 projects–14 of which are worth $1 billion or more–are considering North Carolina as a place to expand.

Boyd says the state continues to generate wide interest despite the data center battle. 

“Historically, North Carolina has a reputation for having some of the best minds in economic development,” Boyd said. “Our site selection firm has been active in the state for five decades, and [we] consider Lee as one of the top commerce secretaries North Carolina has ever had.” 

Lilley shares qualities with other good commerce secretaries, Boyd said: accessibility, credibility, and relatability.

Getting one’s hands “dirty” is crucial to landing jobs, Boyd said, and Lilley does that. 

“In today’s highly competitive battle among the states for new corporate investment and jobs, the position of commerce secretary is one of the most consequential in government,” he said. “While governors are always present at ribbon cuttings of mega projects, the commerce secretary is in the trenches, day in and day out.” 

Lilley was in the trenches when he showed up recently to meet with a company considering Williamston for 200 or more jobs. Steve Biggs, CEO of Martin County Economic Development, believes Lilley helped close a deal that could be announced soon. It’s not a billion-dollar deal, but one that will help a small town desperate for good jobs. 

“He didn’t have to be here,” Biggs said. “He came to help.”