Most Danville and Pittsylvania residents spoke against data centers at a Thursday evening event that was part of a listening tour hosted by state Sens. Louise Lucas and Mamie Locke.
The Democratic lawmakers have been traveling around the state to gather local perspectives on data centers. This was the first stop on the tour outside of Virginia’s urban crescent.
The industry is increasingly interested in Southside Virginia, as Northern Virginia, which has more data centers than anywhere else in the world, runs out of land and electric grid capacity to support data centers.
Pittsylvania is anticipating a massive AI data center project at its Berry Hill megasite, a 3,528-acre industrial park.
There has been no formal announcement of the project yet, but according to figures from a local performance agreement, it could be the largest economic development announcement in Southside history.
Stack Infrastructure, a Colorado-based data center developer, plans to bring $100 billion in investment and more than 2,500 jobs with salaries of around $80,000 to Southside through this project, according to the document.
Residents at the meeting mostly expressed concerns about the environmental impacts of data centers, transparency around local decision making and costs being passed on to ratepayers.
“I don’t want anybody to paint a rosy picture and tell me that we’re going to get $100 billion and just sail into the blue heaven,” said Beverly Richardson. “I care about what happens to my neighbor. I care that my neighbors are able to pay their bills and get healthcare, to buy insurance and to buy groceries.”
Lucas, D-Portsmouth, and Locke, D-Newport News, both serve on the joint subcommittee for tax policy, which evaluates income, sales and use taxes in the state.
“We’re here to be informed of how the community is feeling about this, so that when we get in that room, we can begin to discuss how we’re going to address this issue to the benefit of the citizens of the commonwealth, and not the the benefit of a data center owner,” Locke said at the event.
Data center tax exemptions were a hot topic during this year’s General Assembly session, and the main hold-up in passing a state budget. During the session, Lucas was a staunch opponent of data center tax exemptions, pushing them to end next year instead of the original end date of 2035.
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.
The data center tax exemption costs Virginia about $1.9 billion a year, Locke said.
“If we’re going to continue to let $1.9 billion simply flow into the hands of a data center, what you’re not getting is the payment for core services,” she said. “If we had $1.9 billion more, we could cover more investments in K-12 education, higher education, childcare, Medicaid, healthcare, transportation, safer communities, housing, all of these things.”
In an interview before the event, Lucas said data centers, like all other businesses in Virginia, should “pay their fair share.”
“There’s about to be a $100 billion facility here? Yeah, they can pay their taxes,” she said.
The state budget was finally passed in June, after months of debate, and kept tax exemptions in place for data centers.
This allowed the Stack project at Berry Hill to move forward. Kevin Hughes, chief external affairs officer of Stack Americas, said ending the tax exemptions early would have jeopardized the project.
A letter sent to Lucas from local officials said that the Stack project is the “product of years of deliberate local planning about how and where our region grows.”
The letter said that local governments should retain the ability to make decisions about data center development, and that statewide mandates or restrictions put rural localities at a disadvantage.
The data center tax exemption is an “effective and consistent policy,” said the letter, which was signed by Danville Mayor Alonzo Jones, chair of the Regional Industrial Facility Authority Vic Ingram, and chairman of the Pittsylvania County Board of Supervisors Robert Tucker.
“We encourage you and your fellow legislators to avoid a binary discussion about whether or not Virginia should allow data center investment, and to instead work towards a set of policies that encourage smart, thoughtful, high-quality investment like that which we are pursuing in the Southern Virginia Megasite,” the letter states.
Lucas and Locke listened to more than 20 residents speak at the two-hour event before offering responses at the end.
“We’re trying to make sure … that the people who are voting on how these issues are addressed in terms of regulation going forward, they hear your voices,” Lucas said. “We’re here to make sure that we take your voices back to that committee and let them know that whatever they’re selling, we ain’t buying.”
