The Metropolitan Washington Airports Authority today approved the sale of 424 acres to data center developer Digital Realty Trust.
The $236.5 million deal carries significant ramifications for the county government’s tax rolls and for passengers passing through Dulles Airport.
The property is part of a larger 584-acre parcel listed in county records at a fair market value of $115.9 million. Under MWAA ownership, the land is exempt from county real estate taxes. Once it is transferred to a private owner, it will be subject to county real estate taxes and the county’s special Metro-area real estate tax districts, currently set at an additional 20 cents per $100 of assessed value.
The sale won’t only make space for a major expansion of Loudoun’s Data Center Alley and generate more money for schools and other government services; travelers are expected to rack up big savings, too.
Proceeds from the sale will be required to be used for airport-related activities. That creates capital for some planned expansion projects, but it also provides a pool of money that can be used to reduce the fees added to the tickets of every passenger who boards a flight at Dulles.
Passenger fees, called cost per enplanement, at Dulles reached a high of $26.55 per passenger in 2014. As airlines sounded the alarm about the increasing competitive disadvantage of running flights through Dulles compared to the lower cost at nearby Reagan National and Baltimore-Washington airports, there has been a stronger focus on reducing to ticket prices.
The situation has been helped by a decision shift some revenue, about $35 million this year, generated by at Reagan National, which also is controlled by MWAA, to Dulles. Also, then-Gov. Terry McAuliffe won General Assembly approval to provide Dulles with $50 million in state grants over two years to help reduce the passenger fees. Passenger costs are expected to drop 6 percent, to $17.82 per passenger, this year. However, with the expiration of the state grants, fees were expected to rebound to more than $23 next year. By comparison, the per passenger cost at BWI is under $10, allowing the region’s busiest airport to attract even more flights from low-cost carriers.
According to the airports authority, Digital Realty was the highest bidder, and has already negotiated with the authority and made a $5 million deposit. Following the board’s approval, closing is expected between Sept. 28 and Oct. 12. The deed will include covenants to ensure that development on the land is compatible with the nearby airport uses.
Digital Realty is already an established presence in Loudoun, with 17 data centers in the county already according to the company’s website. Some of those data centers have drawn noise complaints from the nearby residents, such as at Regency at Ashburn.
But the western lands—between Old Ox Road and the airport’s runways—are far from most homes, except Loudoun Valley Estates, and in an area where by policy the county does not allow residential development because of airport noise.