Powhatan approves $2.7B data center campus

Powhatan County has approved an estimated $2.7 billion data center campus on 119.9 acres partly bordering Chesterfield County.

The county’s board of supervisors voted 3-2 during its Oct. 28 meeting for a rezoning and a conditional use permit allowing the proposed development to move forward.

The developer, Newport Beach, California–based Province Group, estimates that its capital investment at full real estate buildout would be $3 billion, but county staff estimates the full investment would be $2.7 billion based on Richmond region square footage values. The project buildout is expected to take five years at minimum.

The data center campus, located at 1318 Page Road, would have three detached data centers with a combined 1.525 million in floor area square footage, as well as six supporting structures. About 20% of the property — roughly 24 acres — will be designated open space.

The conditional use permit that the board approved will allow the developer to build structures up to 75 feet high, rather than being capped at a height of 45 feet.

The development would create 150 to 200 on-site jobs and up to 600 indirect jobs, according to a presentation from the applicant during the board meeting, although a Mangum Economics study projects it would create 165 direct jobs.

Based on the Mangum study, data centers on the property would directly pay $17 million in taxes to the county by 2034, and the county’s total annual tax revenue, including indirect taxes from activity the data centers support, would be $21.5 million.

Harold L. Ellis III and Christina W. Ellis own the land. They previously proposed a mixed-use development including up to 249 residential units for the property, which the county board of supervisors rejected in 2019.

The Powhatan Planning Commission held a work session for the data center campus proposal in May. It recommended denying the rezoning and conditional use permit in its Sept. 3 meeting.

Several county residents who spoke during the public hearing period and a supervisor said they were concerned that the project had no end user and has a provision for numerous possible other uses.

In its proffer, the developer outlined an 18-month period during which the only approved land use would be the data center campus, but after that period, the property could be used for data centers or for one or more of the 45 permitted uses it listed.

To secure an end user, “we need to go to market,” Province Group CEO Mark Kerslake said to the county board. “In order to go to market, we need our zoning approval. The users — occupiers, as we call them — have many sites being thrown at them. They won’t engage unless we have zoning approval.”

In response, Powhatan Supervisor Mark Kinney said the $17 million tax revenue projection depends on the project being fully built out.

“The $17 million is projected, and that’s if all three buildings are built out, they get a user that wants all three [and] all three buildings are packed to capacity with servers. Well, you know what comes after ‘if’ — ‘but,’” he said. “But what if they get a smaller user and there’s only one building, and [the user] only uses half the server capacity of that current building? Well, then your revenue goes down.”

In Northern Virginia, around 300 data centers are sprawled across Loudoun, Prince William and Fairfax counties, with the majority in Loudoun. The Ashburn area in Loudoun is home to the world’s largest concentration of data centers, a zone known as Data Center Alley, through which passes more than 70% of the world’s internet traffic. The Prince William Digital Gateway, if completed as planned, would be the largest data center complex in the world.

Central Virginia, though, is also seeing increased data center development. Henrico County is home to QTS Data Centers’ network access point, as well as Meta data centers. QTS also purchased 622 acres from Hourigan after the land was rezoned to light industrial.

Data center opponents argue the centers strain the state’s electric grid. Dominion Energy has previously estimated that Virginia data centers’ demand for electricity will jump from the 2.8 gigawatts it was in 2023 to 13 gigawatts by 2038.

The approved Powhatan data centers would use an anticipated 300 megawatts of electricity at full capacity. Dominion Energy will supply the facility, which will require building a substation.

According to a Dominion letter to the county’s economic development manager, the Fortune 500 utility expects distribution line upgrades to take about 18 months, for an expansion and upgrade of the existing substation to take about three years and for the construction of a new substation and transmission line to take about four years.

Earlier this month, Dominion Energy Virginia and Amazon.com announced they’d entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Plant in Louisa County that could bring “at least 300 megawatts of power to the Virginia region.”