Data centers have become a significant facet of the technological landscape, particularly in regions like Northern Virginia, which hosts a substantial portion of the world’s data infrastructure. The development of data centers, while economically beneficial, often faces community resistance and regulatory challenges. This article explores recent trends and developments in data center land use, focusing on the balance between economic growth and community concerns.
Regulatory Changes in Loudoun County
One of the most significant recent developments is Loudoun County’s decision to take steps to remove data centers as a “by-right” use on all properties. This change, if approved by the Board of Supervisors, would mean that all new data center proposals would require discretionary approval from the board, rather than being automatically permitted under existing zoning regulations. The primary motivation behind this change is to promote economic diversity and prevent the monopolization of land by data centers, which can inhibit other commercial developments. Board of Supervisor Chair Phyllis Randall emphasized the importance of economic diversification: “We are turning away other businesses, other commercial entities in Loudoun County because they can’t afford to buy land here because the data centers are buying all the land up…If we do not make an absolute effort to allow other businesses in Loudoun County we will be reliant on one source of commercial revenue. It is never a smart thing to be reliant on one source of commercial revenue.” Supervisor Juli Briskman also highlighted the financial evolution of the county, stating, “Right now the commercial tax base is 49% of our revenue pie. When our esteemed Mr. Rizer came on board, we were at 19% of our revenue coming from the commercial tax base. His goal was then to bring it to 23%…Just less than 25% of our tax rate. We are now at 49%.”
For developers, this means navigating a more rigorous approval process, requiring special exception permits (SPEX) for development in Industrial Park (IP), General Industrial (GI), and Mineral Resource – Heavy Industrial (MR-HI) zoning districts where data centers were previously permitted by-right. Developers should prepare for comprehensive reviews and be ready to address various concerns related to land use compatibility, infrastructure capacity, and environmental impact. Additionally, they need to carefully select sites and design projects to align with the county’s revised Place Type boundaries and comprehensive plan amendments, focusing on areas designated for Suburban Employment rather than Suburban Mixed-Use or Residential areas. Emphasis on aesthetic and environmental considerations will be crucial, as the county aims to minimize visual impacts and ecological disruptions. While these changes might pose initial challenges, they also open opportunities for more integrated and community-friendly developments that can garner broader support and potentially enjoy more streamlined operations in the long term. Developers should highlight the economic benefits of data centers, such as job creation and significant tax revenue contributions, which are critical for gaining support from both the public and the county officials.
The next phase in the County’s approach involves a detailed process of amending the Loudoun County 2019 General Plan and the Zoning Ordinance to reflect these changes. The county has outlined a two-phase approach for these amendments. Phase 1 includes amending the General Plan to identify data centers as a Conditional Use in specific Place Types and adjusting the Place Type boundaries to incorporate existing or approved data centers. It also involves revising the Zoning Ordinance to designate data centers as a Special Exception (SPEX) use in all relevant zoning districts. This phase is expected to take approximately 12 months, concluding in February 2025. Phase 2 will focus on developing policies and additional zoning standards for the design and performance guidelines of data centers and utility substations. This phase is expected to take around 14 months and will commence after the completion of Phase 1. It includes research on regional and national best practices and public engagement to ensure comprehensive policy development.
Community Resistance and Infrastructure Challenges
Community opposition to data center developments is not uncommon. In Fayette County, Georgia, residents have voiced strong opposition to the installation of nearly 200-foot electrical poles required to power a new data center. Homeowners are concerned about property values, health impacts, and quality of life issues associated with the new infrastructure. This resistance highlights the ongoing challenge of balancing technological advancement with community interests.
Economic Impact and Approval in Culpeper County
Contrasting with the regulatory tightening in Loudoun County, Culpeper County has approved several data center projects, viewing them as vital to economic growth. The Red Ace Data Center campus, for example, received approval for rezoning 69.19 acres from rural to light industrial use. This project is expected to bring substantial tax revenue and employment opportunities to the region. However, this has not been without debate. Local leaders and community members have expressed concerns over the environmental and infrastructural impacts of these developments.
Innovations in Power Supply
Innovations in power supply for data centers are also a critical area of focus. The proposal for Amazon’s nuclear-powered data center in Pennsylvania is a prime example. This project, which involves utilizing nuclear power from the adjacent Susquehanna Steam Electric Station, aims to provide a clean energy alternative for data centers. However, the project has faced legal challenges from utility companies concerned about the implications of this novel power arrangement on grid management and costs.
Conclusion
The development of data centers continues to be a double-edged sword. On one hand, they bring economic benefits, including job creation and significant tax revenues. On the other hand, they pose challenges related to land use, community impact, and infrastructure demands. As regions like Loudoun and Culpeper Counties navigate these complexities, the need for balanced, forward-thinking policies becomes ever more apparent. For developers and property owners, understanding these dynamics is crucial to successfully navigating the landscape of data center development.
If you have questions about the impact of data centers on land use and zoning or need assistance with another real estate matter, please contact Andrew Gregg, at agregg@beankinney.com or (703) 284-7254.
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.