Prince William County – The Digital Battlefield

Real Estate, Land Use & Construction Law

Prince William County – The Digital Battlefield

Aug 4, 2022 | Real Estate, Land Use & Construction Law

Prince William County (PWC) is becoming a crucial location for data center developers. However, as PWC creates incentives for data center market and contemplates zoning changes that favor data center development, some citizens have grown concerned about the changing landscape in their community.

While PWC has been courting the development of these centers since the early 2000s, it was not until the last few years that approvals and construction ramped up. Are the citizens’ concerns about data center infrastructure encroaching into rural neighborhoods, another example of NIMBYism (Not in My Back Yard), or are their concerns valid?

The role of a data center is to process, store, and communicate data that powers various internet services. For example, centers enable content streaming, email communication, social media usage, online collaboration tools, and scientific computation. To house what is often called “the brain of the internet” requires, on average, a 300,000 square foot building but some are a million of square feet or more. Inside every building is a myriad of different IT devices.

Each of these IT devices, like servers, storage drives, and network devices, all “hum” with electricity and create heat. For optimal performance, this heat must be removed. To remove heat, the centers use elaborate electricity powered water cooling systems that require thousands of gallons of water.

This means that data centers require a tremendous amount of power. In fact, the importance of electric power has changed the way people talk about the size of data centers. Gone are the days of square feet; today’s conversations about data center size are all about Megawatts (MW).

Recent findings suggest that centers like these collectively consumed 205 terawatt-hours (TWh) in 2018, or 1 percent of global electricity use.[1] To meet this huge energy requirement technology companies are looking to alternative energy sources to power data center projects. In March 2018, Microsoft announced the purchase of 315 Megawatts (MW) of energy from two new solar projects in Virginia.[2]

In September 2019, Dominion Power announced its ambitious Coastal Virginia Offshore Wind project, notably the first wind project in the United States built by an electric company. Dominion estimates the project will generate more than 2,600MW of energy by 2026.[3] This year we have already seen several data center operators, industry influencers, and leaders supporting nuclear power.[4]

Successful data center projects need cheap power, a location that can optimally service a cluster of large cities, protection from natural disasters or other emergency situations, large quantities of viable land, an abundance of connectivity, and a receptive government and workforce. Northern Virginia checks all the boxes.

According to Dominion Power’s 2018 Economic Development Report, they offer power at approximately 2.5 cents less per kilowatt hour than the national average.[5] In terms of location, if you zoomed out from Ashburn’s “Data Center Alley” in Loudoun County until you could see the whole east coast, you’d notice that Northern Virginia is very well situated in the middle.

NoVa also sees few natural disasters, except for the occasional hurricane or severe storm, making it a safe location. The region’s close ties to the federal government and long history of tech and innovation have resulted in an incredible network of fiber that can be utilized by data center providers. The state also boasts two subsea cables, MAREA and BRUSA, which connects the region with European, Central American, and South American markets.

To attract data centers, Loudoun County and Prince William County offer tax incentives, expedited permitting, targeted industry status, and permissive zoning. In the late 90’s and early 2000’s, just when the likes of AOL and Equinix were getting a foot hold, Prince William County was homing in on Data Centers. Information and Communications Technology (ICT), which includes data centers, was given “targeted industry” status, which meant that companies seeking to build centers could receive a “50% reduction in permit review time & 50% reduction in site permitting fees” as well as a “Dedicated Development Services Project Manager.”[6]

In 2016, PWC created the Data Center Overlay District. This overlay district operates in the background of existing land use and zoning regulations but allows for applicants seeking to develop land into data centers to do so by right. This means that data centers within these opportunity zones can go up without County Board approval and public input, a process that can otherwise take a year or sometimes longer.

In 2021, QTS Realty Trust, a data center provider with more than 25 data center properties around the US, initiated a Comprehensive Plan Amendment (the Amendment) for 27 Parcels located on both sides of Pageland Lane in Gainesville, VA. This area is now referred to as The Digital Gateway.

If approved, the Amendment would change the underlying plan guidance of these properties from AE, Agricultural or Estate, which allows one dwelling per 10 acres, to T/F, Technology/Flex, which consists of “industrial areas provide opportunities for technology uses such as data centers, and accessory uses.”[7]

In total, the Digital Gateway could support up to 21 million square feet of new data center development.[8] This area, which is part of the “Rural Crescent,” is ideal because it has massive powerlines that were constructed over a decade ago. The power lines are appealing to data center developers that need access to the electricity, and property owners who are interested in selling their land. The Amendment submission caused the County Board to initiate a study into available land in PWC’s Data Center Overlay District for future pipeline construction.

In 2022, a report prepared by Camoin Associates was submitted to PWC that concluded “the supply of sizable sites within the Data Center Opportunity Zone Overlay District (DCOZOD) has dwindled and has forced data center developers to consider sites outside the overlay, potentially limiting the availability of land for other uses. Expanding the DCOZOD, and/or designating specific areas for non-data center industrial use could alleviate land supply constraints.”[9] In an already heated debate over data center expansion, this report may have been the tipping point.

This is where many of the arguments on both sides of the powerlines start sounding familiar. Many advocates for data centers say development can bring in much needed tax revenue to the County. Increased tax revenue would help support infrastructure projects and the school system, which invariably creates jobs and greater opportunities for the citizens of the County.

According to the Virginia Economic Development Partnership (VEDP), in 2021, 62 percent ($6.8 billion) of all the new investment was generated from new and expanding data centers. In 2021, the data center industry supported over 45,000 jobs, producing $3.6 billion in labor income, and created $15.3 billion in total economic output across the Commonwealth.[10] 

Those that oppose data center construction point to the rural nature of the area, and how industrialization will change the character of their communities. The “viewshed” they speak of is the Manassas National Battlefield Park, which would be right across the street from the southern portion of the Digital Gateway. Looking beyond the pastoral landscape of the civil war battlefield and seeing huge windowless buildings would undeniably alter the way people experience the park.

Additionally, opponents point out the negative environmental impacts that data center development might have. Data centers use a tremendous amount of power and water, produce E-waste (hardware that is thrown out when it is replaced), and emit enormous amounts of greenhouse gas. Approximately 0.5% of total US greenhouse gas emissions are attributed to data centers.[11]

Like most other contested developments, the proposed Amendment will likely be approved with attached requirements, proffers, and promises. In addition to providing tax revenue, developers will probably need to provide community benefits like open spaces, trails, and parks as well as make commitments to use renewable energy solutions.

Plans submitted to the County already show developers limiting visual impact by enhanced tree coverage and setbacks. Even with a change in land use classification in PWC’s long range plan, data center developers would still need to go through a rezoning which would likely require these benefits as conditions for approval.

Data centers are the backbone of our internet connected society. As more devices and tasks come to rely on data collection and cloud-based processing, the demand for data centers will only increase. This is especially true given entire industries depend on the analysis and manipulation of the data accessed and stored in these centers. The next big idea, society changing technology, or medical innovation, could come from increased computing power generated from one of these data centers.

Yet, the demand for data centers and hopes of innovation cannot come at the cost of open space, rolling hills, and clean air. Striking a balance between the two is an arduous and controversial task. It is likely that an optimal solution can be reached if developers take steps to limit the negative impact on the communities which they enter, and if the citizens of those communities keep an open mind as they weigh the costs and the benefits of these data center projects.

The land use team at Bean Kinney & Korman will closely watch data center development. As always, please contact us with any questions about this issue or any other land use matters.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the author and are not necessarily the views of any client.

[1] https://energyinnovation.org/2020/03/17/how-much-energy-do-data-centers-really-use/

[2] https://datacenterfrontier.com/wp-content/uploads/2022/05/DCF-Report-Northern-Virginia-Data-Center-Market-1.pdf

[3] https://datacenterfrontier.com/wp-content/uploads/2022/05/DCF-Report-Northern-Virginia-Data-Center-Market-1.pdf

[4] https://www.bisnow.com/national/news/data-center/data-centers-may-be-heading-for-the-nuclear-option-111823

[5] https://datacenterfrontier.com/wp-content/uploads/2022/05/DCF-Report-Northern-Virginia-Data-Center-Market-1.pdf

[6] https://f.hubspotusercontent00.net/hubfs/2588556/Prince-William-Incentives-Matrix.pdf

[7] https://www.pwcva.gov/assets/2022-07/PW%20Digital%20Gateway%20Draft%20Plan.pdf

[8] https://datacenterfrontier.com/wp-content/uploads/2022/05/DCF-Report-Northern-Virginia-Data-Center-Market-1.pdf

[9] https://www.pwcva.gov/assets/2022-05/Camoin%20-%20Targeted%20Industry%20Land%20Need%20Analysis%20-%20PWC-5.13.2022.pdf

[10] https://datacenterfrontier.com/wp-content/uploads/2022/05/DCF-Report-Northern-Virginia-Data-Center-Market-1.pdf

[11] Md Abu Bakar Siddik et al 2021 Environ. Res. Lett. 16 064017

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