Danville and Pittsylvania officials signed off on an AI data center project at the Berry Hill megasite that would be one of the largest industrial announcements in the U.S. — if the state does not end the data center tax exemption next year.
At a called meeting Monday, the Danville-Pittsylvania Regional Industrial Facilities Authority unanimously approved a local performance agreement with Stack Infrastructure, the Colorado-based data center developer behind the project.
The job creation and investment figures included in the local performance agreement are higher than previously announced.
The final document outlines a $100 billion investment and the creation of 2,500 jobs with salaries of at least $80,500 over a 30-year span.
The initial performance agreement included $73 billion in investment and 2,050 jobs over that time period. Those figures would have already topped the 2024 announcement of Berry Hill’s first tenant, a Tennessee-based lithium-ion battery separator manufacturer called Microporous.
The deal with Microporous, which made history as the largest economic development announcement in Southside history about 18 months ago, promised 2,015 jobs and $1.3 billion in investment.
The Southern Virginia Megasite at Berry Hill is the largest industrial site in Virginia at 3,528 acres. In March, RIFA approved a sale of 2,990 acres to Stack Infrastructure — that is almost all of the remaining land at the megasite after Microporous claimed about 200 acres in 2024.
The Stack Infrastructure project “would represent one of the most lucrative single economic development projects in the U.S. for the host locale,” said Matt Rowe, economic development director for Pittsylvania County, at the Monday meeting.
The project also represents the largest private investment ever announced in Virginia, or at least since 1990, when the state began collecting this data. It would be the second-largest job creation project for non-office-related uses, and one of the top five industrial announcements ever made in the U.S., according to the Virginia Economic Development Partnership.
But all of that is contingent on Virginia’s data center tax exemption staying in place.
“The project is dependent upon the state honoring its commitments to existing agreements, including the state’s current data center sales and use tax exemption expiration date,” Rowe said at the meeting.
At the state level, a heated debate continues about whether to eliminate the tax exemption for data center projects earlier than planned.
This exemption is set to expire in 2035, but a proposal to end it early, in 2027, has been a hot topic in the General Assembly. The House and Senate are diametrically opposed on this issue, and their disagreement has held up the General Assembly’s approval of a budget.
Data centers that meet certain criteria in Virginia, like investing at least $150 million and creating at least 50 jobs, are exempt from paying state retail sales and use tax on computers and other equipment. In economically distressed localities, the criteria are at least $70 million in investment and at least 10 jobs.
With the local performance agreement now signed, the end of the tax exemption could be “detrimental” to the project, Rowe said.
“This is speculation, but from what we’ve seen by looking at the industry, talking to the client, I think it would severely cause the project to be at a disadvantage,” he said.
Kevin Hughes, the chief external affairs officer for Stack Americas, said that the tax exemption has been “critical to the creation of the Virginia market and essential to the viability of Stack’s proposed data center campus at Berry Hill.”
Also included in the performance agreement are stipulations if the project does not meet the minimum expectations.
“Job creation requirements are clearly defined and enforceable, with required monetary payments should [Stack] not meet them,” according to Rowe’s presentation.
The company is also required to pay taxes to the locality, both on the land and on the equipment used.
Stack would owe at least $16.25 million in taxes per year on the first 1,000 acres of the project, and an additional $16,250 per acre for every acre after that. Once all 2,990 acres are purchased, Stack would have a minimum requirement tax payment of about $48.5 million per year.
The Pittsylvania County Board of Supervisors is expected to create a separate tax for data center equipment at a rate of $1.62 per $100 of assessed value.
“This tax rate shall be static for the project, to provide long-term certainty as long as the company is performing and meeting the stated requirements,” according to the presentation.
Several RIFA board members mentioned that the project could be a game-changer for the region.
Board member and Danville City Council member Gary Miller pointed to Mecklenburg County and Henrico County, which have used data center revenue to lower taxes and build affordable housing, respectively.
Board member and Danville City Council member Lee Vogler said the region should gather resident feedback on how to invest this “massively transformational” revenue.
“We’ve talked about what we’re able to do with the money from the casino. This blows that away,” Vogler said. “I mean, 10 years ago we couldn’t have fathomed that amount of money.”
Four residents spoke at the meeting, three in opposition to the project and one in favor.
Those in opposition were concerned about water usage, other environmental impacts and transparency with the community.
The resident in favor of the project said that he believes that southern Virginia has learned from the mistakes of places like Loudoun and Prince William counties, which have allowed data centers to infringe on residential areas.
Rowe’s presentation addressed some common resident concerns. It was similar to a presentation he gave during a community outreach meeting in April.
He said that the region has the water capacity to support this project, and that ratepayers will not see an increase to their electric bills as a result of the development. He also said that all 2,000-plus jobs will be permanent positions, and that Danville and Pittsylvania are providing no discretionary monetary incentives for the project.
Stack Infrastructure has locations in North America, Asia and Europe, including data center campuses in large U.S. cities, like Dallas and Atlanta, and in Northern Virginia, which has more data centers than anywhere else in the world.
“Virginia continues to be a core market for Stack’s extensive digital infrastructure portfolio, and we are thrilled by the prospect of bringing meaningful, long-term investment to Southside,” the company said in a statement.
The project will be built out in three construction phases. The closing date on the first phase will be no later than June 2027, according to the agreement. The other phase closings should happen before June 2031.
The Berry Hill megasite was purchased jointly by Danville and Pittsylvania in 2008. Since then, more than $217 million in public and private funds have been invested in grading, infrastructure and other preparations to ready the site for development. The megasite is now “shovel-ready,” meaning it has all the resources necessary for development.
