A headline popped up in my news feed recently that caught my eye: “Trade unions back massive ‘rural crescent’ data center plan.”
Whoa! Virginians talk about the urban crescent, that collection of metro areas from Northern Virginia to Richmond to Hampton Roads that now dominates the state’s population – and politics. But a rural crescent? That’s a new one. Still, just as every waxing moon eventually has a waning moon, maybe somebody’s calling us the rural crescent now? In any case, a “massive” data center plan? If someone is gifting us such a thing, we’ll overlook any quibbles over geographical terms.
Alas, ’twas not to be. The “rural crescent” mentioned here is in what the Prince William Times described as the “rural, western” part of Prince William County in the Northern Virginia exurbs, where there are plans for an 800-acre complex of data centers – the big warehouses of computers that make the internet go. Or, as the Prince William Times puts it, a “controversial” 800-acre complex. Hold that thought.
Data Center Frontier, an industry group, says Northern Virginia has the world’s largest concentration of data centers, with nearly 250 so far and more on the way. Here’s a stat that gives a sense of scale: Northern Virginia has twice the data center space as Silicon Valley, according to the Loudoun County Economic Development office. And more data centers are on the way: Data Center Frontier says that the region is “a hot bed for ‘land banking’ – provisioning sites for future data centers for hyperscale operators like Amazon Web Services, Microsoft, Google and Facebook.” The nexus of all that data center activity has been in Loudoun County; the Ashburn area is known as “Data Center Alley,” but it’s now getting built out, and development is pushing into outlying counties – which brings us to the current controversy in Prince William County.
You will not be surprised to learn that there are those who aren’t keen on all this development. The main issue is whether these data centers should go in the county’s existing 10,000-acre “Data Center Development Zone” (which has nearly run out of space) or the county’s so-called “rural crescent” where, as the newspaper described it, “residential development is limited and industrial development is generally not allowed.”
The politics of this have been unusual, at least in Prince William County. The Democrats on the county board of supervisors have taken a pro-development stance (sometimes citing the amount of tax revenue the centers would produce). The Republicans on the board have taken an anti-development position, which has put them in alignment with environmental groups. Strange bedfellows, indeed.
Now here’s why this political tempest in Northern Virginia matters for us: Why are these data center companies so intent on building in Prince William County, where land prices sometimes go for $1 million an acre? We have localities in Southwest and Southside that are literally begging for data centers. The InvestSWVA economic development group produced a now-famous study – Project Oasis – touting the coalfields as a place to build data centers. (Data centers need a lot of heating and cooling; the theory behind Project Oasis is that water from flooded underground mines would be a lot cheaper than pumping municipal water someplace else.)
Other places want data centers, too. Last year Prince Edward County allocated $1.5 million to buy 280 acres to market as potential data center space (so, yeah, $1 million in Prince William buys you an acre; $1 million in Prince Edward will get you a whole industrial site). In September, the Prince Edward supervisors voted to create a separate – and lower – tax category for data centers. County administrator Doug Stanley told the board that in Prince William County, the tax rate for data centers is $1.25 per $100 of assessed value. In Prince Edward, it will be $1. And even that’s higher than the 25-cent rate that Danville adopted in 2018, which it said then was the state’s lowest. Five localities in Southwest Virginia – the counties of Dickenson, Lee, Scott and Wise and the city of Norton – have gone even lower. Earlier this year, they adopted a rate of 24 cents. Legislators from the coalfields – Del. Terry Kilgore, R-Scott County; Del. Will Morefield, R-Tazewell County; Del. Israel O’Quinn, R-Washington County; and state Sen. Todd Pillion, R-Washington County – have all sponsored legislation to further encourage the location of data centers in “economically distressed” communities, which would cover lots of Southwest and Southside. Meanwhile, a report came out Monday from the Joint Legislative Audit and Review Commission that over the past nine years, 28% of the state’s economic development incentive funding — four times more than any other category — has gone to data centers, which means the biggest chunk of the state’s money has gone to help Northern Virginia. Or, as some might say, the state has helped the rich become richer. More charitably, these incentives have helped create a (bigger) technology cluster in the state, but that cluster right now only benefited part of the state.
So why do all these data center companies insist on building in Northern Virginia anyway? Yes, yes, I know all the official reasons: It’s a lot easier to find data center workers there than in rural Virginia and companies go where the workers are, not always the other way around. That’s why companies like to cluster. Birds of a feather, all that. But come on, people. The median salary for a data center technician is $77,810, according to Comparably. Some range as high as $124,000, the site says. Other sites give somewhat lower rates, but all things are relative: These are good-paying jobs. If a data center located on the back side of the moon, there’d be people willing to move there to make that kind of money. You’d think some accountant for one of these data center companies would look at the numbers and think: You know, why are we paying $1 million for an acre of land in Prince William County when for that same amount of money we could buy hundreds in Southwest or Southside Virginia? And look at the money we’ll save on taxes! Yeah, HR tells us they might have trouble finding a big enough labor pool, but we could pay people a bit more to entice them and still save the company money! Heck, why even offer more money? We can just point out how much lower the cost of living is in Farmville or Danville or Big Stone Gap or you name it. Everybody wins – the company reduces its costs and the workers have more money. Isn’t capitalism great?
I’m generally a free market guy, believing that the marketplace is far more innovative than any of the other economic models out there. But gosh darn, something like this makes me question that. Companies that otherwise like to claim they’re innovative aren’t being very innovative here. They’re all playing follow-the-leader.
So how do we break this cycle? Here’s the opportunity I see. The politicians in Prince William County most unhappy about all these data centers are Republicans. Most of our politicians in Southwest and Southside Virginia are Republicans. Hello? Who among them will pick up the phone and call their partymates in Prince William and point out the obvious solution to everybody’s problem: Those Prince William Republicans shouldn’t just be opposing the data centers there, they could be advocating for those companies to go to Southwest and Southside instead. They’d get the credit for stopping a controversial development; we’d get the jobs.
Politicians in Prince William don’t seem to care much about the jobs. The reality is data centers don’t employ that many people. The Tech Republic website says the average is about 30. It pooh-poohs the notion of data centers as big job creators. But that’s a typical big-city conceit. Thirty jobs in Prince William County mean almost nothing; 30 jobs in Prince Edward or some other community in Southwest or Southside – especially 30 jobs paying what these jobs pay – would be a very big deal, indeed. (I once had a legislator from our region tell me that a colleague from Northern Virginia wondered why the governor was even bothering to go to his community to announce some handful of jobs; the legislator from our part of the world had to patiently explain that in his district, even five new jobs are significant.) Tech Republic discounts data centers because many don’t create jobs for local residents. It quoted someone complaining that when Microsoft built its data center in Mecklenburg County (see, we do have some!), “they brought in outside technicians to do most of the work.” So? Most of our counties in Southwest and Southside are losing population. We should welcome companies that bring in workers as much as we should welcome companies that employ people already here.
Should Prince William County develop its “rural crescent”? Man, I have no idea. Not my county. But for all those people in Prince William who don’t think it should, there’s another rural crescent that is begging for the jobs and tax revenue that some in Prince William don’t want.