• Concept plan includes five data centers, a substation and a possible solar field
• Project team anticipates multi-billion-dollar investment that is initially being self-funded
• Conditional use hearings targeted for first half of 2026

With nearly three decades of real estate development under their belt, Matthew Herzog and his partners are pursuing their first data center project at the former Pennhurst State School and Hospital in East Vincent Township, Pennsylvania.

The proposed multi-billion-dollar development is planned to include multiple data center buildings across the 125-acre brownfield site.

Though the development is in early stages of planning and entitlement, Herzog and project attorney Matt McHugh detailed challenges navigating public pushback, evolving township legislation and the entitlement process in an exclusive interview with NPM.

Acquired by Penn Hurst Holdings DE LLC, of which Herzog is part owner, in 2016, the former state-run asylum complex has long been the subject of public concern, first gaining notoriety in the 1970s for abuse and neglect of its patients before its closure in 1987.

In the years since, ownership changed hands several times, and the site was even used as a seasonal haunted house. The current investors have overseen extensive remediation and demolition of vacant and obsolete structures, preparing the property for potential redevelopment.

That redevelopment has always been envisioned for industrial use, McHugh explained, as the land is already zoned industrial mixed-use – with data center development as a conditional use.

“It kind of was positioned in the right time in the market with the data center boom. (For) two years or so, they’ve been making arrangements and working through plans to bring this forth,” he said.

Additionally, the site’s proximity to electrical infrastructure and the opportunity to repurpose a brownfield site are key factors supporting the proposed data center. McHugh described it as “ideally sited.”

A concept plan submitted to the township for the proposed campus includes the construction of five data center buildings, an office building, a substation and a possible solar field along W. Schuylkill Road.

Although developers don’t expect to have a committed end user until they secure entitlements, they said there’s preliminary interest from hyperscalers. The initial stages of the project are entirely self-funded.

Between the anticipated USD 40m annual tax generation for the schools alone, high job creation, low traffic generation and more, Herzog called the proposed development “the highest and best use for the property” – a goal both developers and township officials have been informally discussing over the last two years.

In those discussions, Herzog and McHugh told NPM both township leaders and the development team were working to help the township establish safeguards via a data center ordinance.

However, recent packed public meetings reflecting public discontent have stalled progress.

The draft ordinance, McHugh said, is in its sixth revision, with each iteration becoming increasingly restrictive and, in his view, incompatible with data center development permitted as a conditional use under existing zoning.

“It kind of evolved into not ‘How do we permit reasonable data center development for this ordinance?’ Instead, it was, ‘How do we stop, prohibit or block data center development through this ordinance?’” he explained.

The township has since halted work on the ordinance after the board declined to open a public hearing on December 17, leaving the proposal inactive unless it is readvertised and rescheduled under local code.

As a result, the developers are proceeding under their existing conditional-use applications, which provide a vested entitlement to seek approval under current zoning, regardless of the stalled ordinance.

The conditional use process is expected to involve multiple hearings and could extend into the first half of 2026.

If the township approves the conditional use permit, the project will still need site plan approval – a process that could take 18 to 24 months and include civil engineering and third-party permitting – before construction can begin.

*This story was originally published exclusively for NPM subscribers.