Goodman Group withdrew its proposal for the $1.2 billion Project Mars data centre in Sydney’s north shore on Monday, citing an evolving regulatory environment and community opposition. The developer confirmed it informed the NSW Department of Planning that it would no longer proceed with the three-storey facility in Lane Cove, which had faced fierce backlash from residents and local councils over its proximity to homes and schools.
Goodman Group Cites Regulatory Changes and Community Feedback
The Project Mars development was planned for a site approximately 20 metres from the nearest house and 160 metres from Lane Cove West Public School. In an official statement released on Monday, Goodman Group explained that the decision to shelve the project followed significant policy shifts regarding large-scale data centre developments.
“During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly,” Goodman stated. “Goodman has carefully considered these changes together with feedback received through the planning process, including the views of the local community.”
Political and Community Resistance Mounts in Sydney
The cancellation comes amid a broader data centre boom in Sydney fueled by the global artificial intelligence race.
Opposition to the project reached a federal level last week during the first hearing of the federal senate inquiry into data centres and artificial intelligence. Goodman’s general manager of developments, Ben McGilp, faced repeated pressure from Liberal senator Sarah Henderson, who called the proposal “a wholly unreasonable proposal… that shows contempt for local residents.”
Sanaa Shah, a senior campaigner for Sweltering Cities who spoke before the committee, welcomed the withdrawal. “It’s a clear testament to the large scale community resistance that’s forming to data centres. It’s something we’re observing across the country,” Shah told the ABC.
Federal and State Rule Changes for Data Centres
The cancellation coincides with shifting regulatory frameworks at both the state and federal levels. The New South Wales government recently introduced a fast-track program for qualifying data centres, while the federal government prepares new rules targeting energy and water use.
Despite these incoming federal regulations, dozens of approved but unbuilt AI data centre projects are expected to escape the proposed restrictions. Meanwhile, advocacy group Data Centre Australia warned that social licence issues and complex approval processes risk driving digital infrastructure investments away to neighbouring countries, according to CEO Belinda Dennett.
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