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.