The Danville City Council will consider two items related to data centers at its regular 7 p.m Tuesday meeting. The first item would add language about data centers to the city’s development code, and the second would increase the tax rate for data center equipment.
There will be a public hearing for each item.
Nearby Pittsylvania County has received several data center proposals in recent years, and Danville has begun to see proposals in recent months, according to the staff report for the first item in the meeting’s agenda packet.
Currently, there are no data centers within the city limits.
Virginia has more data centers than anywhere else in the world, with 35% of the globe’s data centers in Northern Virginia. Data centers can be attractive to localities because of the significant tax revenue they bring in, but residents are often concerned about the large amounts of water and energy they use.
City Manager Ken Larking requested that staff research data center operations, land use policies for data centers, and review the city’s unified development code and comprehensive plan, the report states.
The unified development code, which went into effect on Jan. 1, 2026, is a document that provides guidelines for zoning, site development and subdivision regulations. The comprehensive plan, which was updated in 2024, is a long-range planning document that suggests goals and strategies to guide future development and growth.
After conducting this research, the city council asked staff to draft amendments to add data centers as a possible use in the unified development code.
In April, the city’s planning commission unanimously recommended approval of the proposed amendment, which lays out the following recommendations for data centers:
- The perimeter of a property used for a data center operation may not be within 500 feet of any property that allows residential use by right.
- A data center may not operate on a parcel that is less than 150 acres.
- A data center operation must have a minimum vegetative buffer of 20 feet.
- All equipment used to operate the facility, including generators, must be fully enclosed. The city’s planning director may grant a waiver if it’s determined that an enclosure is not feasible. In this case, all equipment must be surrounded by opaque screening.
- All ground equipment must be surrounded by opaque screening.
- A data center may not be located within an industrial park.
City staff recommends that the council approve these amendments, according to the staff report.
A second item would significantly increase the city’s tax on data center equipment from 25 cents to $1.20 per $100 of assessed value.
This increase would go into effect in July, which is the start of the 2027 fiscal year.
The city added a tax classification for computer equipment and peripherals used in data centers in 2018. The rate of 25 cents has remained the same since then.
City staff recommends that the council approve this item as well.
This is the only government meeting in Danville this week. In Pittsylvania County, the planning commission will meet at 7 p.m. Tuesday.
