Four City Council Members Say Hard No to 1500 Gateway Data Center in Fredericksburg
THE FXBG ADVANCE MONDAY 8/3/26 AFTERNOON READ
By Steve Watkins, ADVANCE EDITOR
The majority of Fredericksburg’s City Council members have announced that they oppose the Penzance Development company’s recently announced plans to seek permits for a million-square-foot, two-building, 75-foot-high data center at 1500 Gateway Boulevard in an 84-acre wooded area in the city known as the Hylton Tract.
“Simply put, it’s the wrong location for a project such as this,” Ward I Council Member Matt Rowe said in an email to The Advance. “It’s too close to existing residential development, and the power lines that would be necessary to accommodate this project would need to be routed just behind Hugh Mercer ES or loom over all of Cowan Boulevard from Route 1 to 1500 Gateway.”
He added, “Constituents that I have heard from have been virtually unanimous in their opposition to a data center complex at this location as well. I’m impressed by Penzance’s tenacity to make this project happen, but at some point you need to accept ‘no’ for an answer.”
Penzance has come to the city twice in the past two years with proposals for a data center campus that would have been twice the size and height of the current project. Their most recent application was shot down in February 2025 by the city Planning Commission in a unanimous vote against recommendation.
An affiliate of the company has since launched a PR campaign in advance of the new proposal, with a postcard blitz, a supporter-packed Council meeting in May, and recent announcement of a Project Labor Agreement—and the promise of hundreds of construction jobs—with the Baltimore-DC Metro Building Trades Council.
Penzance is promising to only use non-potable water for cooling, and to a create a mostly wooded buffer zone of 20 acres between the data center campus and the nearest neighborhood. Among the proffers are $18 million to the city’s capital improvement plan, $20 million to the city school system, $1 million for sewer improvements, $500,000 to the city’s career and technical program, and $455,000 to the city’s public safety fund—on top of an estimated $200 million in tax revenues over the first 10 years of operation.
Ward 3 Council Member Susanna Finn says despite all that, she’s another no.
“While I believe that data centers have the potential to be economically advantageous, I have concerns about the 1500 Gateway Project and its siting outside the TOD,” she said. “I’m just not confident the City has the space or infrastructure for two centers, and do not plan to support this item, should it come to Council.”
A year and a half ago, City Council created a Technology Overlay District, or TOD, to accommodate a massive “by-right” data center development that will be going up in Celebrate Virginia South. That action came at the end of a contentious five-and-a-half-hour Council session where dozens of residents spoke out against the plan after the city’s Planning Commission had voted against recommending it.
At-Large Council Member Will Mackintosh says he still supports approval of the TOD, but won’t be getting behind the Penzance project.
“I don’t think a data center makes sense on this site,” he said.
“I am proud of the process that we undertook back in late 2024/early 2025 that led to the creation of the Technology Overlay District in Celebrate Virginia,” he added in an email to The Advance. “I think we as a city got out ahead of the data center issue and decided on our own terms how many data centers we wanted, where they should be in the city, and what kinds of environmental restrictions should be placed on them if they want to locate here.
“It’s a tough issue, but I think we struck the best balance we could. Since this project isn’t in the TOD, I think we have already answered the question about whether we want a data center there or not, and I think the answer is no.”
Jannan Holmes, another at-large council member, echoed McIntosh, and said she had already spoken publicly at a Fredericksburg Democratic Party meeting about her opposition.
“When we voted on the TOD, I said that one TOD was enough for Fredericksburg and I would not support other data center projects in the city,” she said. “Council has not seen the final proposal from Penzance, other than the glossy mailers they have sent to residents. Though I do not want my above statements to be seen as ‘voting,’ which can only happen in an open meeting, I am true to my word, and will not be supporting the 1500 Gateway Data Center Project.”
The Advance sent queries to, and is waiting for responses from, the three other members of Fredericksburg City Council—Mayor Kerry Devine, Vice-Mayor and Ward 4 Member Chuck Frye, and Ward 2 Member Joy Crump.
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Steve Watkins is editor of The FXBG Advance.
Hurrah!
While the PC voted to not recommend approval of the zoning modifications requested by the developer, we first found that the proposal was “not substantially in accord” with Fredericksburg’s Comprehensive Plan.
Under Virginia Code § 15.2-2232, if a local planning commission determines that a public or certain private facility (like a utility, street, or solar project) is not substantially in accord with the local comprehensive plan, that project generally cannot be built or authorized. In this case, it was the inclusion of the project’s proposed electrical substation (which does not exist in the Comp Plan) and the non-inclusion of a pedestrian bridge from their property across I-95 to Central Park (which does exist in the Comp Plan) that led to this determination.
State code gives the local governing body (e.g. our City Council) the authority to overrule the commission's “not in substantial accord” finding and approve the project anyway. I am gratified to see that a majority of Council Members have made such definitive statements validating the Planning Commission’s decision and recommendation.
— David Durham, Chair, FXBG Planning Commission