Northern Va. Year-in-Review: Back to the cookie jar

Data centers continued to dominate, define and, in some cases, shape the arc of Northern Virginia’s 2023 economic story.

Amazon Web Services cleared its hurdle in Stafford County, and although Prince William County’s controversial Digital Gateway project faced major public backlash, supervisors ultimately voted to approve the 1,200-acre project’s rezoning applications in December 2023. (See related story.)

Often touted as once-in-a-generation development projects, data centers tend to bring with them the promise of an economic sea change and local tax windfalls, although critics point out that they also come with few jobs and very high electrical power usage.

However, data centers were hardly the only projects of note in the region last year. In December 2023 came Gov. Glenn Youngkin’s unexpected announcement of plans to move the Washington Wizards and Washington Capitals teams to a proposed $2 billion entertainment complex and arena in Alexandria. If successful, the arena would be owned by a state-run authority, requiring General Assembly approval. In mid-February, that bill ran into a Senate roadblock, although the House version passed. For Youngkin to seal the deal, he’ll need to make concessions to Democrats, politicos say.

Alexandria

Backed by Youngkin and majority team owner Ted Leonsis, the plan to move the Wizards and Capitals from Washington, D.C., to Alexandria’s Potomac Yard would be the economic development equivalent of Stanley Cup and NBA Finals wins for the commonwealth, supporters say. The governor has said the project could potentially create $12 billion in local economic impact and 30,000 jobs over the next several decades.

As part of the deal, the teams’ corporate owner, Monumental Sports & Entertainment, would move its headquarters from Washington to Alexandria, bringing more than 600 jobs. Run by Leonsis, with partners including Fortune 500 CEOs Richard Fairbank of Capital One Financial and Raul Fernandez of DXC Technology, Monumental also owns the WNBA’s Washington Mystics. The company would invest $403 million in the $2 billion project in addition to contributions from the state, Alexandria and JBG Smith Properties, developer of Amazon.com’s HQ2, located a short distance away from Potomac Yard.

The proposal is nonbinding, and for the plan to take place, the General Assembly must establish a sports authority that would own the property and buildings. Sen. Scott Surovell sponsored a bill in the 2024 session that would establish the Virginia Sports and Entertainment Authority and financing fund.

Fairfax County

It was a year of ribbon-cuttings for Fairfax as the county welcomed almost a dozen headquarters openings, relocations or expansions in 2023.

V2X, the aerospace and defense contractor formed by the 2022 merger of Vertex and Vectrus, moved its headquarters from Colorado to Tysons in April 2023, and satellite cybersecurity firm SpiderOak relocated its headquarters from Colorado to Reston.

Fairfax County Economic Development Authority President and CEO Victor Hoskins attributes the county’s appeal to its large talent base and its proximity to transportation and government agencies, as well the regional data center boom, which has also benefited Fairfax.

“We ended up with about 417,000 square feet in data centers last [fiscal] year, which for us is good,” says Hoskins. “That is above what we set as our benchmark.”

Overall, in fiscal 2023, the county EDA announced the additions of 9,300 jobs and more than 1.5 million square feet of office space.

Loudoun County

Buddy Rizer, Loudoun’s economic development executive director, says that although data centers are still important to the county’s economy, they aren’t the whole story. “We had significant wins from sports to retail to health IT to manufacturing and logistics. We added $10 billion of new commercial investment last year.” 

Rizer views Rivana at Innovation Station’s approval last spring as the county’s biggest deal of the year. Loudoun supervisors voted in May 2023 to approve the 103-acre multiuse project, which is expected to include 2.4 million square feet of residential, office and hotel space in its first phase. Groundbreaking is expected in March, Rizer said in January. Also, developers of Arcola Center, a 34-acre business park, broke ground last year on more than 3 million square feet of flex industrial space.

Nevertheless, Rizer expects about 2 million square feet of data center space to be added this year in Loudoun.

Stafford County

An Amazon Data Services deal stood out as Stafford’s biggest economic development story over the past year, when county supervisors approved a data center performance agreement with the Amazon.com subsidiary on Jan. 2, following months of discussion. 

Due to nondisclosure agreements and closed sessions, some details are not public, but the performance agreement includes two data centers planned on 50 acres off Old Potomac Church Road, as well as any future campuses. The project represents a $2 billion investment and the potential for more than $100 million in tax revenue annually for the county.

“Getting a data center is kind of like landing an auto manufacturer was in the 1900s,” said Kyle F. Allwine, who was Stafford County’s economic development director before departing in December 2023. “It can be life-changing for a county.

“Now it’s a matter of ironing out the incentive deals and everything else,” Allwine added. Another data center proposal —Stafford Technology Campus, a 5.8 million-square-foot project on 523 acres — is set to be submitted for rezoning by June, officials say.

Stafford’s other economic news from the past year included the October 2023 opening of Japanese convenience store food products manufacturer Warabeya Nichiyo Holdings Co.’s East Coast production plant, which resulted in the creation of more than 300 jobs, an increase from the 268 originally projected. Warabeya Nichiyo’s primary client is the 7-Eleven chain.

Prince William County

Billed as the future largest data center complex in the world, the controversial Prince William Digital Gateway received its final approval on Dec. 13, 2023, after more than 24 hours of public comments both for and against. The lame-duck Board of Supervisors passed three rezoning applications, allowing the project to go forward, in 4-3 votes with one abstention. Upon completion, the project is expected to include 23 million square feet of data centers on 2,100 acres.

As of November 2023, Prince William County had 42 data center buildings, totaling 7.78 million square feet, with an additional 4.5 million square feet under development.

“This is definitely a sweet spot for Prince William County,” says Christina Winn, executive director of the county’s Department of Economic Development and Tourism.

Overall, Prince William recorded $1.9 billion in capital investment, and 1,420 new and retained jobs in 2023.

Meanwhile in the county’s seat, the city of Manassas, Giant Food opened its 82,000-square-foot e-commerce distribution facility in May 2023, creating 200 jobs and investing about $30 million.

Arlington County

February brought an early Valentine’s Day gift to Arlington, with the news that CoStar Group was investing $20 million to relocate its global corporate headquarters from downtown Washington, D.C., to Rosslyn. Known for its Apartments.com brand, the real estate analytics and data company purchased the region’s tallest office building, the 560,000-square-foot Central Place Tower, for $339 million from Bethesda, Maryland-based JBG Smith Properties and PGIM Real Estate. CoStar plans to move into 150,000 square feet of the building in late 2024. About 500 employees will be relocated, and CoStar also plans to add 150 jobs.

Meanwhile, retention and expansion were the name of the economic game for Arlington in 2023, although in June, Amazon held the grand opening for Metropolitan Park, the first phase of HQ2, the e-commerce giant’s $2.5 billion-plus East Coast headquarters, a high point for the year. While Amazon had hired 8,000 HQ2 workers by June, it announced in March 2023 that it would be pausing construction of HQ2’s second phase, PenPlace, including the proposed showcase spiral Helix building. Amazon began moving employees into the first of Metropolitan Park’s 22-story twin towers in May.

Spotsylvania County

In October 2023, Kalahari Resorts & Conventions broke ground on its $900 million, 1.38 million-square-foot destination water park resort in Spotsylvania. (See related story.) Meanwhile, the U.S. Department of Veterans Affairs made significant progress on its new regional outpatient clinic at U.S. 1 and Hood Drive in the county’s Four Mile Fork area, expected to be among the largest VA outpatient clinics in the nation. Initially scheduled for delivery in late 2023, the clinic is now slated to open in 2025.