New lawsuit could strip Cave City of authority over proposed data center site
If successful, the lawsuit would remove the land from Cave City’s jurisdiction, eliminating the city’s authority to regulate development there, including its recently enacted moratorium on new data center projects.
CAVE CITY, Ky. — The owners of several hundred acres in Cave City and unincorporated Barren County are asking a judge to overturn a 2024 annexation, arguing the city violated state law when it brought the property into its limits.
If successful, the lawsuit would remove the land from Cave City’s jurisdiction, eliminating the city’s authority to regulate development there, including its recently enacted moratorium on new data center projects.
Brennan Crain
In a lawsuit filed Tuesday, Kentucky Industrial Alliance LLC, which is already challenging the moratorium in a separate case, claims Cave City unlawfully annexed approximately 245 acres through an ordinance adopted in 2024.
KIA has confirmed it is working with a developer to build a hyperscale data center, known as the Cave Point Commerce Center, on approximately 600 acres located within the Cave City Industrial Park between Interstate 65, the CSX Railroad, Kentucky 90 and Herbert Turner Road.
Open records obtained from Barren County government identify the developer as OTN Group, the same company behind a separate data center project in neighboring Simpson County.
What does the lawsuit say?
According to the lawsuit, the property was originally owned by Branstetter Family Holdings, which signed a consent to annexation in April 2024. Kentucky Industrial Alliance later purchased the property.
A consent to annexation is a written agreement in which a property owner voluntarily requests or agrees for land to become part of a city’s boundaries.
Kentucky Industrial Alliance LLC v. City of Cave City, et al. by brennan.crain
The lawsuit argues the annexation was flawed because a 0.09-acre parcel containing Shaw Cemetery was not owned by Branstetter Family Holdings and therefore could not be included through its consent.
According to court records, Shaw Cemetery has existed as a separate parcel since 1902 and remained under separate ownership even though it was surrounded by the Branstetter property.
The lawsuit states a default judgment entered in December 2024 later transferred ownership of the cemetery to Kentucky Industrial Alliance, but only after the annexation had already taken place.
Kentucky Industrial Alliance also alleges Cave City failed to comply with multiple provisions of Kentucky’s annexation laws, including required notice procedures and requirements for annexing unincorporated territory.
The company argues the city failed to identify all affected property owners and did not obtain the consent required to annex every parcel within the proposed boundaries.
What the landowners say
Joey Crist, a partner in Kentucky Industrial Alliance LLC, released the following statement to Barrenside after the lawsuit was filed.
Kentucky Industrial Alliance, LLC has filed a verified complaint challenging the City of Cave City’s annexation of its property after recently discovering information that raises significant questions about whether the annexation complied with Kentucky law.
This case concerns whether the City followed the procedures required by law when it annexed the property. Kentucky’s annexation statutes exist to protect property owners, promote transparency, and ensure that local governments exercise only the authority granted to them by the General Assembly.
Our complaint asks the Court to determine whether the annexation was lawfully completed and, if it was not, whether it should be declared invalid.
We have great respect for the judicial process and are confident that the Court will carefully examine the facts, consider the evidence presented by all parties, and apply Kentucky law as written. Questions involving property rights and the lawful exercise of governmental authority are appropriately resolved in the courtroom.
Because this matter is now pending before the Court, we will have no further comment while the litigation is ongoing.
Why does this matter?
The company is asking a Barren County judge to declare the annexation ordinance invalid and unenforceable, permanently block the city from enforcing it and grant any other relief the court finds appropriate.
The outcome could also affect Kentucky Industrial Alliance’s separate lawsuit challenging Cave City’s data center moratorium.
If the annexation is voided, the property would return to unincorporated Barren County, where Cave City would have no authority to enforce the moratorium.
Brennan Crain
The land would also fall outside any zoning regulations. County officials have previously said they would not enact a development moratorium because, without a countywide land-use ordinance, they lack the legal authority to do so.
The lawsuit names the City of Cave City, the Cave City Council and the Joint City-County Planning Commission as defendants.
As of Wednesday evening, no response had been filed by the defendants, and no hearing had been scheduled.
Read the exhibits filed in the latest lawsuit here.
