DIGITAL INSIGHTS: The Status of Data Centers in Spotsylvania
How many data center campuses are there in Spotsylvania County, how much land do they consume, and when will they start generating tax revenue? Answers to these questions are becoming clearer.
By Martin Davis
EDITOR-IN-CHIEF
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Digital Insights is a weekly feature usually appearing on Thursdays that explores the role of data centers in our region. These columns will focus on four areas: tracking the development of data centers in our area, exploring projected and actual tax revenue trends, explaining what data centers are and how they affect our daily lives, and reporting on research and emerging trends in the industry. These columns are made possible, in part, by a grant from Stack Infrastructure.
Data centers are on their way to Fredericksburg, Spotsylvania, and Stafford. Tracking their progress and growth, however, can be challenging. Data centers aren’t simply announced and built, as happens with many development projects.
Many, indeed most, of these projects must go through the rezoning process, meaning land meant for one purpose — agriculture, housing, retail — is “rezoned,” or approved, for a different use, like a data center. This can be a time-consuming process. Even projects that don’t go through rezonings — so-called by-right projects because they are built on private property — can be greatly slowed, as we have seen recently in Stafford and Spotsylvania, when local boards equivocate on standards or try and force by-right projects to go through a special use permitting process.
There is also the energy question. Data centers cannot get moving until the project has the greenlight from utility companies that it will be connected to the energy grid. Getting connected requires going through the interconnection queue, which can drag out the time it takes to bring a project online.
Nonetheless, data centers a getting closer to becoming reality in our region, particularly in Spotsylvania.
Today, Digital Insights takes a look at what’s in process, and when Spotsylvania might begin realizing tax revenues. The column will explore other localities later this winter.
Spotsylvania
Data center developers are sinking big dollars into projects in Spotsylvania. For example, when Amazon announced it was investing in the county, it committed to $35 Billion being spent in the county.
The Advance secured the most-recent map from the county that shows the current, future, and potential data center sites. Currently, there are 17 project sites where data centers are either 1) under construction, 2) undergoing rezoning, 3) have a site plan in process, and 4) are approved by the Board of Supervisors.
By some estimates, it will take until about 2040 for all of these sites to come online.
Amazon is moving ahead, with buildings going up on four sites: Summit Crossing, Carter Store, Cosner, and Mattameade. (Editor’s Note: It was just announced that Amazon is also making a significant investment in Louisa County, where the company has just purchased 1,900 acres of land at a cost of $72.45 million. A tip of the hat to Tammy Purcell of Engage Louisa for breaking that story.)
While it is true that data centers are large buildings — 250,000 square feet or more in most cases — the actual footprint the centers have on the county will be small.
Spotsylvania’s public information officer Michelle McGinnis reported that of all the sites on the map below, total acreage is 3,696.
Under Construction (Designated in green): 616 Acres
Approved Data Center (Designated in yellow): 1,142 Acres
Current Rezoning (Designated in purple): 1,263 Acres
Current Site Plan (Designated in orange): 675 Acres
That represents just 1.4% of the total land in the county.
In exchange, data centers generate two types of tax revenues for localities. Property tax, which is applied to the physical facility, and the machinery and tools tax that is applied to the equipment that makes a data center run.
Property taxes are collected from when the building is issued a Certificate of Occupancy. According to McGinnis, “Certificates of Occupancy may be issued in 2026 for Amazon Web Services’ first 2 data center buildings at Cosner Tech provided there are no unforeseen delays.”
Currently, says McGinnis, “There is not sufficient information available at this time to estimate when taxes will be collected.” As for how much the county will receive, McGinnis said that will come clearer “as we work through the FY2027 budget process and can fine tune revenue projections.”
Property taxes are the less lucrative of the two tax revenue streams, but it is a steady, predictable revenue stream. Square footage doesn’t change from year-to-year, so it is relatively simple to project how much revenue each center will produce.
The machinery and tools tax is the more lucrative. This is assessed on all the technical equipment in a data center.
The machinery and tools tax revenue will vacillate from year to year, as equipment depreciates quickly. However, that equipment is changed out every five years on average, meaning that the machinery and tools tax revenue starts high, falls, and within five years quickly rises again.
How counties choose to spend these revenues is important. In some counties, machinery and tools tax revenue goes toward one-time projects that don’t require a steady flow of support, while property taxes are applied to hiring people because it’s relatively easy to project how much revenue will be there years down the road.
Coming soon: The status of data center buildings in Fredericksburg and Stafford.
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