Tax-rich data centers stir up county controversy
Sabrina Moreno// December 31, 2023//
Elena Schlossberg has spent the past three-and-a-half years fighting against what some say is soon to become the world’s largest data center complex.
The Haymarket resident estimates she’s participated in at least 100 Zoom calls, town halls and Prince William County meetings to protest the project, while wearing a series of T-shirts voicing her opposition with slogans like “Data centers destroying communities.”
The Prince William Digital Gateway project — which Schlossberg alternately calls the “digital gateway to hell” — is set to transform 2,100 acres alongside the historic Manassas National Battlefield Park into 23 million square feet of data centers after county supervisors approved its rezoning Dec. 13, 2023, after a 27-hour meeting and public hearing that saw as many as 200 people testify for or against the project.
Proponents say the project will support 30,000 construction jobs and could generate $500 million in annual tax revenue during the next 15 to 20 years, money that could go toward schools and public safety. It would nearly quadruple the $101.42 million in tax revenue Prince William’s existing data centers brought in for 2022, a figure that has grown from $6.2 million in 2012.
“My goal was always to bring in commercial tax revenue. We’re a county that tries to keep up with the Joneses,” says outgoing Prince William County Board Chair Ann Wheeler, adding that she was trying to relieve pressure on the county’s residential tax base through her support of data centers, which may have cost her re-election to the body. “It’s really hard to do without the same kind of commercial tax base like Fairfax and Loudoun.”
But critics like Schlossberg view the spread of data centers in Prince William as a noisy, looming catastrophe with unsustainable energy demands and high environmental risks that clash with the county’s Community Energy and Sustainability Master Plan, which aims to cut greenhouse gas emissions by 2030 and become carbon-neutral by 2050.
That opposition has led to lengthy battles before the county’s planning commission and supervisors, including meetings that have stretched overnight and pitted residents against the industry, placing elected officials in the crosshairs. Also adding to the controversy is the lame-duck board’s approval of Digital Gateway and another development, the 270-acre Devlin Technology Park, near Bristow, in late November 2023, before new members could be seated, leading to complaints that the developments were jammed through.
The previous county board — with Democrats holding five seats to Republicans’ three — was divided mainly along party lines, with Democrats supporting the project and Republicans opposed. Ultimately, the project passed Dec. 13 on a 4-3 vote, with one Democrat, Kenny Boddye, abstaining.
“This is big money, big tech, big business,” says Dr. Steve Pleickhardt, president of the Amberleigh Station Homeowners Association, and a former Republican candidate for delegate. He’s not anti-data centers, he says — he just doesn’t want them near his home, or national parks. “Citizens don’t stand a chance against any of that.”
Bordered on the east by the Potomac River and home to Marine Corps Base Quantico and the FBI Academy training and research complex, Prince William has transformed from a farming community into a burgeoning life sciences corridor with the 2022 opening of the Northern Virginia Bioscience Center in the county’s Innovation Technology Park, a 1,500-acre research park anchored by George Mason University’s College of Science.
It’s also become an attractive destination for data center developers, lured by cheaper, more available land and better tax incentives than tech companies can find in other Northern Virginia counties.
Prince William has 42 data centers, totaling 7.78 million square feet, and another 4.5 million square feet were under development as of November 2023. That’s still a fraction of the industry’s presence in Loudoun County, Prince William’s neighbor to the northwest, which is home to the world’s greatest concentration of data centers.
Loudoun has more than 200 data centers comprising more than 26 million square feet, with an additional 4 million square feet under development. It’s home to Data Center Alley, a 6-square-mile area in Ashburn that handles more than 70% of the world’s internet traffic. Loudoun officials estimate data centers will generate about $570 million in personal property taxes in 2024. That’s about half of the local tax base, prompting Loudoun’s Board of Supervisors in November to approve a $70 million-plus revenue stabilization fund for its data centers to cover fluctuations in data center tax revenues in years when revenues are lower than anticipated.
Data centers are a growing, tax-rich business in Virginia, where the industry contributed $54.2 billion to the state’s gross domestic product from 2017 to 2021, according to a September 2023 PricewaterhouseCoopers study. Amazon.com alone invested $52 billion in building data centers in Virginia between 2011 and 2021, and the e-commerce giant expects to spend $35 billion more on data centers in the commonwealth by 2040, fed by increasing demand for cloud-based services like artificial intelligence tools and streaming media.
In Prince William, the county designated 9,500 acres as an overlay district in 2016, allowing data centers to develop in certain parts of the county without a special use permit. In 2022, county supervisors voted to open more than 2,000 acres for data center development use — an ongoing expansion effort prompted in part by a county study that found the overlay district is running out of marketable land.
Prince William’s fiber optic network and other infrastructure, as well as its initial data center tax rate of $1.25 per $100 of assessed value, added to the allure, says Wheeler.
Supervisors voted to raise that rate to $2.15 last spring to generate more revenue to cover county expenses and avoid spikes in real estate tax bills. That increase doesn’t appear to have impacted developer interest.
Loudoun County’s data center tax rate is $4.15 per $100 of assessed value, but Wheeler says Loudoun is running out of land, and what it does have, it needs for housing. “[Data center developers] started looking close by, and we were here and had the fiber backbone already starting to go in,” Wheeler says.
As of early December 2023, there were at least 23 pending applications covering 14 data centers in Prince William that seek to rezone acreage from agriculture to business or modify building heights, according to the county planning office.
Those applications span data center projects over more than 1,000 acres. Among the largest are University Business Park, which would rezone about 117 acres in the county’s Brentsville District and allow for up to 3.8 million square feet of data centers, and Hunter Property, which would rezone roughly 196 acres in Brentsville.
One pending case deals with amending a zoning ordinance to address possible impacts of data center uses. Another is a review that could include amendments to the overlay district map.
Christina Winn, the county’s executive director of economic development, has previously said the county isn’t targeting data centers but considers the industry key to Prince William’s growth. Winn denied interview requests for this story.
The next “bull’s-eye” for data center development in Prince William is Sanders Lane, a two-lane, 4-mile road located near the Digital Gateway and surrounded by high-power transmission lines, Schlossberg says.
Similar to landowners near the Digital Gateway project, Sanders Lane residents are considering selling their properties to data center developers. A potential buyer for the Sanders Lane property hasn’t been disclosed and no application has been submitted yet.
“The Digital Gateway is just a microcosm of what’s happening in the state of Virginia,” Schlossberg says. “If people don’t wake up, we’re going to be sliced and diced and industrialized for the benefit of the world. And I don’t approve of that.”
Debates over data center development in Prince William reached a fever pitch over the Digital Gateway and show no sign of abating, says Schlossberg, who founded the Coalition to Protect Prince William County in 2014 in response to a proposed transmission line to power an Amazon data center. The nonprofit focuses on smart growth and pushes back on the data center industry. It’s also one of more than 20 environmental and climate advocacy groups — including the Sierra Club and the National Parks Conservation Association — that banded together in December 2023 to ask the state legislature for regulatory oversight on data centers and a reexamination of the facilities’ impact on public health and the environment.
State Sen. Danica Roem, a Prince William Democrat who opposed the Digital Gateway, has said she plans to sponsor legislation that would allow the state more oversight of data centers.
Concerns over land constraints are already happening in Prince William County, too, along with skepticism over having the transmission capacity to meet the energy demand of the fast-growing sector.
Despite being the largest investor in renewable energy, the data center industry’s energy usage surpasses that investment, says Julie Bolthouse, director of land use with the Piedmont Environmental Council, which has organized against the centers in Prince William.
“The innovation on our renewable energy sector is not keeping up with the explosive energy demand that they are requiring,” Bolthouse adds.
Steve Precker, a spokesperson for Dominion Energy, assured planning commissioners during a Nov. 8, 2023, meeting that while the Fortune 500 electric utility can’t predict future impacts to the grid, Dominion would be able to handle the Digital Gateway’s initial buildout. Dominion Energy forecasts that electric demand for data centers in Virginia will more than quadruple from 2.8 gigawatts in 2023 to 13 gigawatts — roughly the equivalent of powering about 3.3 million homes — by 2038.
But Prince William Planning Commissioner Tom Gordy, a Republican who won election to represent the county’s Brentsville District on the Board of Supervisors in November on a platform of restricting data center growth, wasn’t convinced.
“Don’t sit here and tell me we have enough power. We don’t,” Gordy shot back. “We can’t keep doing this. … What is the breaking point for our county? When do we say enough is enough?”
That exchange was another volley in a yearslong political battle over data center demand that’s divided supervisors along party lines. Prior to that meeting, on Nov. 3, 2023, Digital Gateway’s developers, Dallas-based Compass Datacenters and Overland Park, Kansas-based QTS Data Centers, submitted a fifth round of application documents to the county. Planning staff recommended that the project be denied, complaining that the submission of thousands of pages of documentation less than a week before the planning commission hearing on the project did not leave enough time for review. The planning commission, which plays only an advisory role, also recommended denial.
After a more thorough review of the Digital Gateway, county planning staff still recommended the project’s denial in early December, saying the applications lacked critical information about site layout, elevations or blueprints.
Noting that more than 100 residents had joined to sell their homes for the Digital Gateway, a QTS Data Centers spokesperson said in a statement to Virginia Business that “QTS is grateful to Prince William County … for entrusting us with stewardship of the Prince William Digital Gateway. … QTS will continue to work diligently with county staff, elected officials and residents as it carries out its environmental and responsible development commitments. We are excited for this partnership to strengthen the Prince William community and bring increased local tax revenue and new job opportunities.”
The Digital Gateway controversy ensnared Wheeler, who faced a recall campaign in 2022 over her support for data centers — support that contributed to her ouster in June’s Democratic primary by Deshundra Jefferson, a media relations strategist and former broadcast journalist who opposes the Digital Gateway project. Jefferson will replace Wheeler as board chair Jan. 2.
It also led former Supervisor Pete Candland to resign his position in 2022, citing a conflict of interest because he was one of the homeowners who had agreed to sell their homes to the Digital Gateway developers.
Data centers have consumed so much political energy that residents and county officials say little headspace has been left to consider alternatives, says Supervisor Bob Weir, a Republican who represents the Gainesville district where Digital Gateway is located, and who has repeatedly voted against data centers.
Weir says efforts should instead be put toward supporting small businesses who “get the short shaft every time.” He expects litigation to follow the December Digital Gateway vote, which also poses an additional challenge to the incoming board, which will have to see the proposal through.
Jefferson says she’s heard from residents that tourism could be a welcome industry for the county to develop, but many remain more “fearful about what is in front of them.”
Wheeler sees opposition to data centers as a general resistance to development and growth, including housing, and an example of how misinformation proliferates.
“I just assumed that it would defend itself,” Wheeler explains. “And I was wrong.”
Associate editor Courtney Mabeus-Brown contributed to this story.
Founded in 1731 and located about 30 miles southwest from the nation’s capital, Prince William County is the second largest county in Virginia. Home to Quantico — a Marine Corps base and the main training facility for the FBI and DEA — the county known for its Civil War history and historic riverside towns. Prince William is also home to the state’s largest public research university, George Mason.
Population
486,943
Top employers
Major attractions
Tourist attractions in Prince William include two national parks: Manassas Battlefield, where the first major Civil War battle occurred, and the 15,000-acre Prince William National Forest, which has 37 miles of hiking trails. You can dive into history at the National Museum of the Marine Corps, a 120,000-square-foot building that covers the Marines’ role in World War II, the Vietnam War and others. Farm Brew LIVE at Innovation Park is dubbed Northern Virginia’s “first destination brewery campus.” MurLarkey, a local distillery, is undergoing an $8.1 million investment to establish a 25,000-sqaure-foot building on Farm Brew’s campus.
Top convention hotels
Hilton Garden Inn Manassas 108 rooms, 1,500 square feet of meeting space (opening in 2024 with 43,000 new square feet)
Wyndham Garden Manassas 158 rooms, 5,500 square feet of meeting space
Hilton Garden Inn Haymarket 117 rooms, 2,570 square feet of meeting space
Notable restaurants
Abugida Ethiopian, abugidaethiocuisine.com
The Black Sheep American, theblacksheeprestaurant.com
Bistro L’Hermitage (Woodbridge) French, m.bistrolhermitage.com
The Bone Southern, thebonebbq.com
SEMIFREDDO (Manassas) Italian, semifreddoitaliancuisine.com
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