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Tag: zoning

Powhatan green-lights $2.7B data center campus

Although some Virginia counties are backing away from hosting more data centers, Powhatan County supervisors voted 3-2 in October to approve an estimated $2.7 billion data center campus.

The project will be on 119.9 acres partly bordering Chesterfield County, and supervisors OKed rezoning and a conditional use permit, rejecting the Powhatan Planning Commission’s recommendation.

The developer, Newport Beach, California-based Province Group, estimates that its capital investment at full 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 as proposed has 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 will allow the developer to build structures up to 75 feet high, rather than being capped at a height of 45 feet.

A Mangum Economics study projects the development will create 165 direct jobs. According to the study, the property’s data centers would directly pay $17 million in county taxes by 2034, and the county’s total annual tax revenue, including indirect taxes from activity the data centers support, would be $21.5 million.

Several Powhatan residents said they were concerned that the project had no end user and has a provision for numerous possible other uses after 18 months.

To secure an end user, “we need to go to market,” Province Group CEO Mark Kerslake told the board of supervisors. “In order to go to market, we need our zoning approval. The users … 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,’” said Kinney, who voted against the permit.

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

Developer downscales plans for Pittsylvania power plant/data center campus

The developer planning a natural gas power plant and data center campus on 2,233 acres in the Banister and Callands-Gretna districts of Pittsylvania County withdrew its rezoning application Monday, after facing vocal opposition from residents at public meetings held last week. 

Instead, Herndon-based Balico, the development company behind the project, intends to file a rezoning application with Pittsylvania County by Nov. 19 pitching a scaled-down version on about 600 acres in the same area, according to Balico founder and CEO Irfan Ali. 

Ali acknowledged the project has a “certain amount of a perception issue,” but insisted the controversies generated after the project’s first application wasn’t the main reason for Balico’s initial withdrawal. 

“The reason we scaled it down is because, really, what my engineers and lawyers concluded is that we don’t want to trigger a traffic impact analysis study with [the Virginia Department of Transportation],” Ali said Wednesday, “so we’re staying under the threshold in this filing.” 

However, Ali hopes the project will eventually be able to grow beyond 600 acres. “This is the first phase, and ultimately we will continue,” he says. 

The initial application for the project would have included up to 84 data center buildings and a 3,500-megawatt natural gas power plant in a rural area along Chalk Level Road. That development would have created 700 jobs and deliver a minimum of $120 million per year in tax revenue to Pittsylvania County once it was built out, Ali had said.

At last week’s public meetings, attendees sternly expressed concerns about the project, including worries about dropping property values, traffic and the impact on the area’s rural nature. 

Last week, Robert Tucker, vice chair of the Pittsylvania County Board of Supervisors, announced Balico didn’t have the votes to get the rezoning passed by the supervisors. When reached Friday, Tucker said he wouldn’t support a smaller proposal from Balico either. 

“Based on everything that we’ve experienced with this particular investor and the community reaction, I don’t think that I’m going to support that,” he said. “I can’t speak for the other supervisors, but I don’t think the support is there.”

A scaled-down project would create between 300 and 400 jobs, according to Ali, who noted he’s heard of Pittsylvania residents traveling two hours to go to work. “This will create jobs right in their own backyard,” he said. 

Balico has hired LINK Public Affairs, a Richmond communications firm, to rally local support for the project. “We’re building already quite a strong momentum among the business community,” said Ali. 

Data centers require water for cooling servers. Initially, Ali hopes to tap into a source of nonpotable water in Chatham. Long term, Ali said, he’s talking with officials in Hurt about building a pipeline to carry water about 19 miles from a town water source to the data center campus. Town Mayor Gary Hodnett did not immediately respond to a request for comment Thursday.

The pipeline, Ali said, would be able to deliver up to 18 million gallons of water a day. The data center campus will only require 2 million gallons a day, he noted, so the remaining water could be used by homes in that area that rely on individual wells.

Building the pipeline and a water treatment facility would cost about $17 million, Ali estimated. Before work begins on that, however, Ali said he will need to identify a user for the data center campus. “None of this can be financed if we don’t have a user at the back end,” he said. 

Matt Rowe, director of economic development for Pittsylvania , receives multiple calls a week from data center developers looking at the county.

Rowe pointed out that the region isn’t subject to “hurricane impacts” and has low seismic activity. The soil in Pittsylvania is good for load-bearing capacity, he added. 

“When you get closer along the coast there and certain places, [where] you’re dealing with more sand, and that just adds cost to construction,” Rowe said. 

Location also works in favor of Pittsylvania, he noted. 

“Almost all internet traffic is going through Ashburn, Virginia, or Marietta, Georgia, or the QTS facility in Sandston,” Rowe said. 

Pittsylvania officials will need to consider what role they want data centers to play in the region’s economic future, Rowe maintained. The county’s comprehensive plan was adopted in 2010.

“What’s even more important to the county and for long term is looking at probably doing a total rewrite of its comprehensive plan because that’s really what guides … future growth.” Rowe said. 

Roanoke City Council approves zoning changes — again

A residential zoning do-over in the Star City is done. At least for now.

On Sept. 16, Roanoke City Council voted 6-1 to adopt zoning amendments that will allow greater housing density and eliminate single-family-only housing

City Council adopted similar zoning amendments in March, but several city homeowners, including Republican mayoral candidate David Bowers and former City Attorney Bill Hackworth, filed a lawsuit charging that city officials did not follow proper procedures prior to the vote. The suit remains pending, according to Maynard Sipe, the plaintiffs’ attorney.

Roanoke officials responded to the lawsuit by starting over and reopened discussion on the matter through the summer. In August, Roanoke’s planning commission reversed course, opting by a 3-2 vote not to recommend the changes. But City Council, which isn’t bound by the commission’s vote, adopted the proposal at its September meeting following lengthy public comment.

Several Roanoke homeowners filed a second lawsuit Oct. 16 at Roanoke City Circuit Court charging that Roanoke City officials failed to provide a sufficient summary of the zoning amendments in public notices about public hearings for this round of zoning amendment adoption and other issues.

Roanoke isn’t alone in eliminating single-family zoning, according to Alexander von Hoffman, senior research fellow at the Joint Center for Housing Studies of Harvard University.

“The idea is that by allowing demand to flow freely without the constriction of the zoning regulations, you’d be able to get increased housing … [and] produce more units that are less expensive,” von Hoffman says.

In September, a circuit judge overturned changes that eliminated single-family zoning in Arlington County, citing procedural issues and other problems. A lawsuit challenging Alexandria’s move to end single-family-only zoning appears headed for court.

Roanoke’s previous single-family-only residential zones were a holdover from the city’s Jim Crow era, according to acting Assistant City Manager Chris Chittum, who announced plans to retire in October. Paired with the city’s urban renewal projects that tore down historically Black neighborhoods to make way for Interstate 581, the civic center and a post office, Roanoke became one of the most segregated cities in America. “It’s pretty insidious how well it’s worked,” Chittum says.

The rewritten zoning code makes it easier for developers to build multiunit parcels in residential neighborhoods. It also made other changes, including reducing the amount of lot area required for dwellings.

But don’t expect Roanoke to change drastically overnight. The city issued 98 residential building permits in 2023, and it expects to see fewer than 40 additional units annually following the changes.

“The way our housing market is,” he says, “every single unit that we add is helpful.”  

Editor’s note: This story has been updated from the print version. 

Kuhn continues moving Loudoun projects forward

It hasn’t exactly been smooth sailing for Chuck Kuhn lately as he tries to rezone land for flex industrial use in Leesburg and Purcellville.

The CEO of JK Moving Services and JK Land Holdings, Kuhn is one of Northern Virginia’s most prominent data center developers and land conservationists, having purchased swathes of property in Loudoun County to keep the land rural. But his reputation as a data center builder has run into growing opposition from residents who oppose more data center development in Northern Virginia.

In Leesburg, Kuhn has proposed to rezone and redevelop the 7.6-acre site of the shuttered Westpark Golf Club hotel and conference center into an 86,400-square-foot flex industrial building. The site neighbors a golf course that Kuhn sold to Loudoun County in 2022 to be turned into a public park.

Kuhn’s development proposal — approved 5-2 by the town council in July — faced scrutiny over the project’s scale and appearance, as well as truck noise levels.

Another concern was whether the building would become yet another data center; Kuhn’s team later changed the plan to exclude data centers as a permitted use for the land.

Work on the building’s site plan and design are underway, and in mid-August, Kuhn said he expects both proposals to be presented to the town for approval by late September. “We’re hoping that we’re demolishing the old building within the next six months,” Kuhn said.

Progress in Purcellville has not gotten as far.

Town council members there voted 4-3 in late July to continue gathering information before deciding on Kuhn’s application to annex and rezone land outside town to develop the Valley Commerce Center. Like Kuhn’s proposal in Leesburg, he has offered a plan that would not include a data center.

Concerns with the Valley Commerce project include water usage, location suitability and traffic increases, according to Purcellville Town Council member Caleb Stought, who voted against the application.

Kuhn’s project will add an estimated 3,500 trips per day to roads “that are already prone to significant congestion and gridlock,” Stought says.

Kuhn has also filed a rezoning application with Loudoun County. In August, JK Land Holdings purchased the 25-acre Telos Corp. headquarters site in Ashburn for $60 million — and that could be a potential space to develop data centers, although Kuhn hasn’t said what he intends for the site.  

$1 billion data center campus moves forward in Pittsylvania

With more than 70% of global internet traffic flowing through Virginia data centers — mostly in Loudoun County — the commonwealth is the world’s undisputed data center capital. And Tom Gallagher’s development group wants Pittsylvania County to claim a stake in that action.

Gallagher represents Anchorstone Advisors SOVA, the developer planning to build a potential $1 billion-plus data center campus on a 946-acre tract in Ringgold. During its July 16 meeting, the Pittsylvania County Board of Supervisors unanimously voted to rezone the tract for heavy industrial use to allow for the project. Construction could begin on the project’s first phase by mid-2025 to early 2026.

Currently, the only hyperscale data center campus in Southern Virginia is the 1.1-million-square-foot Microsoft data center complex in Boydton, about an hour east in Mecklenburg County.

“I think it’s a golden opportunity for [Pittsylvania] to get in on the game,” says Gallagher, who is also a principal in a $550 million mixed-use development proposed for Pittsylvania’s Axton area.

No tenant has been announced for the data center campus yet, but Pittsylvania’s economic development director, Matt Rowe, hopes Anchorstone’s project will be “the tip of the spear” for attracting more data centers southward.

“We recognize there’s tremendous opportunity for Southern Virginia when it comes to attracting hyperscale data centers,” Rowe says. “Northern Virginia is pretty much tapped out from a power standpoint [and] from a land standpoint, so we … become the next best option,” due to the region’s available land, low tax rates and proximity to subsea high-speed internet cables in Hampton Roads and QTS’s network access point in Henrico County.

“Counties like ours need the types of direct [tax] revenue that come from these projects,” says Rowe, “and we have the available land mass and space where they can do it at scale without impacting a lot of adjacent property owners.”

That said, some residents did express concerns to the county about potential increases in traffic, light and noise that might come from Anchorstone’s data center campus, which is expected to receive its data center use permit from the county Board of Zoning Appeals by year’s end.

Anchorstone has agreed to comply with county noise ordinances and to reduce light pollution, says Gallagher, noting that the campus also will have direct access to U.S. Route 58, so it won’t impact residential roads. “Most [residents] won’t even know it’s there.” 

Culpeper tech zone attracts data centers

A Dallas-based developer seeking to build its fourth data center campus in Virginia had a problem.

Finding sites large enough was getting difficult in Northern Virginia, where DataBank has two locations in Ashburn’s Data Center Alley and one in McLean.

“Virginia is still a solid data center market,” says DataBank Chief Operating Officer Joe Minarik. “We looked around and said, ‘Hey, where’s expansion still growing and land [still] available?’”

DataBank found 85 acres where it plans to break ground by early 2025 in the 690-acre Culpeper Technology Zone (CTZ). It offers access to fiber, electricity, incentives and workforce training.

“Culpeper tipped the scale for our ability to get there,” Minarik says. “And it’s already starting to develop. You’re seeing other data center providers grow theirs there.”

Those include Peterson Cos., Cielo Digital Infrastructure, CloudHQ and Copper Ridge. Additionally, Red Ace Capital Management received county approval July 2 to locate in the zone.

Culpeper County created the CTZ in 2021 to consolidate data center development in one place, streamlining power needs and curtailing expansion elsewhere. Developers who invest $10 million and hire at least 10 new employees there get a tax rebate of 40% over a five-year period, says Bryan Rothamel, Culpeper’s economic development director.

Also located in the CTZ are the Culpeper Technical Education Center and the Daniel Technology Center, offering trades and IT training relevant to building and maintaining data centers.

DataBank plans to build three facilities totaling 1.4 million square feet in the CTZ, with the first coming online around 2027 or 2028. It’ll need hundreds of workers to build them, and then 50 to 60 people to manage each building. Tenants will bring their own IT staff. Having nearby schools provide workforce training is a plus, Minarik says.

The CTZ also ticked boxes for Peterson Cos., a Fairfax-based real estate developer with 10 other data center projects. The zone’s ordinance anticipates the needs of data centers, and the CTZ isn’t near schools and dense residential development, so developers face less opposition, says Adam Cook, Peterson’s managing director of development.

Peterson won approval in 2023 to build eight data centers totaling over 2.05 million square feet on 150 acres there.

“Staff members and elected officials have listened to their community and preserved the rural nature of their community, while still making space for data centers,” Cook says. “It’s really a tribute to fantastic leadership.”  

QTS finishes $137M purchase of rezoned Henrico tech park land

QTS Data Centers has secured ownership of all 622 acres of the recently rezoned site for the White Oak Technology Park II project in Henrico County’s Sandston area for approximately $137 million.

On June 28, a limited liability company belonging to QTS bought the remaining portion of the site that it hadn’t yet acquired — about 397 acres — for $118.8 million from a limited liability company belonging to Richmond development company Hourigan, county records show. Hourigan shepherded the land through its county rezoning process to light industrial.

The LLC owned by Hourigan purchased the land that day, buying about 223 acres for $38.05 million from Atlantic Crossing and 174 acres from Vienna Finance for $20.5 million.

“[QTS] came to us with a vision and a plan for eastern Henrico that allowed them to have complete control of that entire site,” said Hourigan founder and CEO Mark Hourigan, “and in evaluating all the options and ways that we might be able to consider moving forward with that, we thought that was the best long-term outcome for the county and for that site, is to have someone with a proven track record [and] the capital behind them to be able to make that kind of investment.”

QTS previously acquired the other approximately 225 acres of the site and some 4 outlying acres from Harmon Properties, Brenda H. Sargent and John C. Harmon in several December 2023 transactions totaling $18 million.

The Kansas-based company already has a data center campus in the original, adjacent White Oak Technology Park and announced in 2022 plans for a 1.5 million-square-foot expansion. Also in that park is QTS’ network access point, which connects, through Virginia Beach landing stations, to three subsea internet cables originating in Europe and South America.

A company spokesperson said QTS was unable to share details of its project plans at this time.

Hourigan said, “It is a fabulous opportunity for Henrico County and to drive this region forward, and allows QTS to continue their business plan, and I think a great solution for everyone that was involved.”

Project past and future

During the rezoning process, which began with initial filings in late 2023, county residents raised concerns about environmental impacts and losing part of a Civil War battlefield. Ultimately, the county planning commission recommended approving the rezoning in April.

The Henrico County Board of Supervisors voted to rezone the site on May 14. On May 16, the board announced the county was establishing a $60 million affordable housing trust fund that would be funded by unbudgeted local tax revenue from data centers.

“We are incredibly excited about the industrial development that is happening and that will be happening in eastern Henrico,” said Anthony Romanello, executive director of the Henrico Economic Development Authority. With the establishment of the affordable housing trust fund, “developments like what’s happening in White Oak, like what QTS is doing, are really helping to make Henrico an even greater community.”

Now that the site has been rezoned, Romanello said, next steps include installing infrastructure such as water, sewer and power lines at the site by 2026. According to county documents, Hourigan will install sewer infrastructure for the project, while the county will handle water infrastructure.

Dominion Energy had to apply to the State Corporation Commission for approval to install two 230-kilovolt power lines to the site and expand its existing White Oak substation. In October 2023 testimony, a Hourigan representative referred to the proposed project, then consisting of about 320 acres, as the VAH Data Center Campus, referring to the property owners at the time: Vienna Finance, Atlantic Crossing and Hourigan. The SCC approved Dominion Energy’s application in March.

“I think we’ve had a very strong industrial base in Henrico — and I’m including data centers in industrial — and it’s getting a whole lot stronger with the investment that Hourigan and QTS are making,” Romanello said.

Brent Godwin contributed to this article.

Danville considers new rules for short-term rentals

Amid a boom in local short-term residential rentals like Airbnbs, Danville officials are examining ways to regulate the practice.

Caesars Entertainment opened its temporary Danville Casino in May, drawing some area visitors. Additional factors driving short-term rentals, speculates Danville City Manager Ken Larking, may include construction on local projects such as the $100 million White Mill redevelopment and the $650 million permanent Caesars Virginia resort casino, along with a new Navy training program for defense industry manufacturing workers at the Institute for Advanced Learning and Research.

Short-term rentals are adding to an affordable housing shortage for the region’s growing workforce. A study last year commissioned by the city found that Danville has a housing shortfall of about 600 units based on current housing supply and projected job and population growth, as well as residents’ ages and income levels. 

At least 100 short-term rentals are listed in the Danville area and not all have been vetted, says Renee Burton, Danville’s director of planning and zoning. About 30 comply with city law, but others are operating under the radar.

Danville allows for short-term rentals of bedrooms or basements as an accessory use, but special-use permits and a business license are required to rent out a house — a fact of which many residents offering their properties for short-term rentals aren’t aware, Larking says. “As soon as we know about them,” he says, “we let them know what the rules are.”

To address the issue, city staff are proposing several ordinance changes, including: requiring special-use permits for all rentals, whether a room or a house; charging a $500 fee for hosts; conducting annual inspections; collecting back taxes from hosts; limiting concurrent short-term rentals to 150, or about 1% of the parcels in the city; limiting stays to between 18 hours and 30 days; and requiring property owners to live within 30 miles or designate a local agent.

Additionally, standards are needed to address safety and ensure short-term rentals are compatible with neighborhoods, Larking says, adding that other questions should be considered, including, “Is there room to park? Will this become a nuisance to the neighbors?”

Danville’s planning commission has signed off on some changes, which are under review by Danville City Council, but a vote had not been set as of mid-November.  

Parking repeal gives developers space

Opening a small business is never easy, but for many Richmond entrepreneurs, the city’s previous minimum parking requirements added extra hassle.

Two years ago, when restaurant Africanne on Main relocated from its longtime downtown location to a spot near Virginia Commonwealth University’s Monroe Park Campus, city parking regulations stalled the move for weeks, recalls co-owner and chef Ida MaMusu. She had to scramble to find two additional parking spaces to rent to meet the city’s then-minimum requirement of five spaces for her business.

“Now things [are] slow, prices [are] going up in food, and we still got this huge parking bill,” MaMusu says.

Stories like this from local businesses are part of the reason City Council repealed the requirements on April 24.

The parking minimums had mostly restricted small businesses and developers, rather than larger operations with bank financing that typically require a certain amount of parking regardless of local regulations, says Richmond Association of Realtors Vice President of Government Affairs Joh Gehlbach. “Our hope is that this will add units to the market because we are in a housing crisis right now,” Gehlbach says.

Councilman Andreas Addison, who introduced the repeal, says the former requirements represented an outdated, car-centric mindset that complicated the city’s goals to develop a more walkable and accessible urban landscape.

“When you put parking as a requirement in a spot located for a development, that doesn’t mean it’s the best place for parking to be in general for public use,” Addison says.

Given that half of Richmond’s buildings were constructed before 1947 (city parking requirements were first instituted in 1943), the repeal impacts a wide range of properties, says Kevin Vonck, director of the city’s Department of Planning and Development Review. He hopes it will give developers options to share existing parking spaces and opportunities to repurpose unused lots. 

Brian Revere, president of Breeden Construction LLC, says that the flexibility the repeal will grant developers is a net positive, but it still won’t remove the need for parking altogether.

“Most of us still see this market as requiring some level of regular commuting outside of the city limits,” Revere says, “and the public transportation infrastructure is not here to support not having a vehicle.”  

Arlington residents sue over ‘missing middle’ zoning

Ten Arlington County residents filed a lawsuit against the county in April that claims Arlington’s new “missing middle” zoning ordinance was passed in March without proper notice and violates Virginia law.

“Missing middle” refers to the range of options that fall between affordable housing and single-family homes, including duplexes and other higher-density residences. On March 22, with an aim of providing more housing options, the Arlington County Board unanimously approved the plan, ending single-family-only zoning and allowing up to a sixplex in some areas. The vote drew close to 200 residents speaking for and against it.

“We are part of a dynamic, vibrant community in Arlington. … That is not a bad thing. In fact, it’s a damn good thing,” Arlington Board Chairman Christian Dorsey said after the vote, which followed three years of work. “Certainly, it’s our responsibility to think about how we accommodate [growth].”

In April, the average Arlington home price was $837,632, according to the Northern Virginia Association of Realtors.

The 10 plaintiffs suing the board and planning commission say the vote came without enough explanation, was “unlawful and rushed,” and would create “drastically” higher density in lower-density neighborhoods. Moreover, the lawsuit claims, the missing middle zoning amendment “increases density without promoting goals … such as affordability or homeownership by diverse families and incomes.”

The plaintiffs’ attorney, Gifford R. Hampshire, a partner with Fairfax-based Blankingship & Keith PC, declined to comment on behalf of the plaintiffs. The county also declined comment.

However, the plaintiffs’ views don’t represent those of all Arlington stakeholders. Ashley Goff, who lives in the county’s Green Valley neighborhood and is a leader with Virginians Organized for Interfaith Community Engagement (VOICE), advocated for the zoning change and defends the decision as transparent.

She says residents now have expanded housing choices, adding that some homeowners started calling the county before the plan took effect July 1, expressing interest in demolishing their single-family homes to build duplexes or triplexes. The county’s housing department would not confirm details, saying only that it has “received inquiries” from interested property owners.

Eric Berkey, a member of Arlington’s Citizens Advisory Commission on Housing, which backed the amendment, says high housing costs have far-reaching consequences for residents and is a systemic problem. “The fundamental question is who gets to live in a neighborhood. … What makes a community?”