Stack Infrastructure says its AI data center project in Pittsylvania will move forward after the General Assembly finalized a budget Monday that kept state tax exemptions in place for the industry.
The tax exemptions were the main hold-up in approving a budget. Ending the exemptions early would have jeopardized the Stack project, which would be the largest economic development announcement in Southside history in terms of investment and jobs.
Stack has promised to bring $100 billion in investment and create 2,500 jobs with salaries of at least $80,500 over a 30-year span.
With the tax exemptions in place, Southside Virginia is a viable location for the project, said Kevin Hughes, chief external affairs officer of Stack Americas, in a Tuesday statement.
“With the signing of the budget agreement reached by the governor and the General Assembly, Stack Infrastructure can confirm that our project at the Berry Hill Megasite in Southern Virginia will continue to advance through our competitive site selection process,” Hughes said.
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.
These exemptions are set to expire in 2035, but a proposal to end them early, in 2027, caused a heated debate in the General Assembly.
The General Assembly passed Gov. Abigail Spanberger’s budget amendments Monday, ending the months-long budget negotiations. Data center tax exemptions will remain in place until 2035, and the industry will now be subject to a consumption tax for electricity consumed at each facility.
The Stack Infrastructure project in Pittsylvania is currently exempt from state retail taxes until at least 2040 under a separate deal with different criteria: a capital investment of at least $35 billion and the creation of at least 1,000 new jobs with average wages that are at least 1.5 times the prevailing wage in the locality. That exemption could be extended to 2050 if those figures are exceeded by a certain amount.
“We look forward to continued collaboration with state and local leaders to move this transformational project forward,” Hughes said.
Vic Ingram, chair of the Regional Industrial Facilities Authority, said that this project’s investment and job creation would be “historic and life-changing” for Pittsylvania County.
“Now that the state has decided to retain prior agreements and to treat Stack fairly … I am grateful that we can look forward to a long and prosperous relationship,” Ingram said Tuesday.
The Southern Virginia Megasite at Berry Hill, which at 3,528 acres is the largest industrial park in Virginia, will be almost entirely occupied by Stack’s data center campus.
In April, the company purchased nearly 3,000 acres at the park, which is less than 10 miles west of Danville and has been preparing for a large-scale industrial user since the land was purchased by the city and the county in 2008.
Stack signed a local performance agreement with figures that top 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 at the time, promised 2,015 jobs and $1.3 billion in investment.
The Stack project will be built 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.
