Montgomery Township Embroiled in Lawsuit Over Sudden Data Center Ban

Montgomery, New Jersey, is no stranger to development debates, but a recent lawsuit has truly put the spotlight on the intersection of local governance and ambitious projects. It seems the Township is now in the hot seat, facing a legal challenge over its freshly enacted ban on data centers – a ban that one developer claims unfairly targets their substantial investment.

It all started, as these things often do, with a large piece of land and a vision. E. Kahn Development Corp., a name you might remember from other significant projects, had their eyes on the sprawling former Kenvue property. Kenvue, for those keeping score, had announced its move to Summit back in 2024, leaving a considerable void. By December 2025, E. Kahn had officially purchased the site, specifically Block 14001, Lot 2, and Block 13001, Lot 15, ready to turn it into something new.

Their plan? A data center, a modern digital hub that, while perhaps not universally loved, certainly represents a significant economic opportunity and a crucial piece of today's digital infrastructure. E. Kahn wasn't exactly quiet about their intentions; they filed a general development plan application way back in October 2025. Then, on April 15, 2026, they followed up with a detailed site plan application. Just a couple of months later, on June 9, 2026, the Township confirmed that E. Kahn’s site plan application was administratively complete – a pretty big green light in the development world, signifying that all the paperwork was in order and ready for review.

But here’s where the plot thickens dramatically. Just nine days after E. Kahn’s application was deemed complete, on June 18, 2026, the Montgomery Township Committee did something rather unexpected, at least from E. Kahn’s perspective. They approved Ordinance No. 26-1779. What was this ordinance, you ask? Well, it was a sweeping measure that essentially banned data centers within the Township's borders. Talk about timing!

Naturally, E. Kahn Development Corp. saw this as a direct affront, a sudden shift of the goalposts right in the middle of the game. They weren't going to take it lying down. So, on July 31, 2026, they officially filed a lawsuit in Somerset County Superior Court, aiming to challenge the validity of this new ban. Their argument, laid out in the legal complaint, is pretty compelling. They contend that the Township's ordinance is not only “arbitrary and capricious” but also “unreasonable” and “discriminatory.” In essence, they feel singled out, believing the ban was rushed into place specifically to thwart their project, which was already well underway.

One of the particularly sticky points E. Kahn raises concerns the Township’s Planning Board. The complaint highlights that while the Planning Board is alleged to have recommended the adoption of the ordinance on June 8, 2026, the official minutes and video from that very meeting don't actually show any discussion about whether such a ban was consistent with the Township's long-standing Master Plan. This is a crucial detail, as zoning changes are generally expected to align with a town's overarching development strategy. Without that discussion, the recommendation's basis becomes, shall we say, a bit fuzzy.

This isn't just a squabble between a developer and a town; it’s a high-stakes legal battle that could have far-reaching implications for Montgomery. It challenges the Township's authority to make significant zoning changes, especially when they impact ongoing projects and substantial investments. For E. Kahn, it’s about protecting their investment and their right to develop a property they legally acquired and began planning for. For Montgomery, it’s about the future character of their community and the types of development they want – or don't want – to see.

The Somerset County Superior Court will now be tasked with sifting through these arguments, weighing the Township's legislative power against a developer's property rights and the principle of due process. It promises to be a fascinating case, one that many in the development and municipal planning circles will undoubtedly be watching closely.