Warner Hears of Data Centers’ Local Impact

U.S. Sen. Mark Warner met with executives from Loudoun’s data center and cloud computing industry in Data Center Alley on Friday, getting a briefing on how they see the industry’s impact on Loudoun and the threats it could face.

The discussion, hosted at an Equinix campus, focused on the industry’s positive impacts, the surrounding community’s sometimes negative reaction to the industry, and how Loudoun came to be the dominant data center market in the world.

According to Department of Economic Development Executive Director Buddy Rizer, this year data centers are estimated to bring in more than $400 million of tax revenue to the county government. This year, each penny on that real estate tax rate is worth about $9.5 million in revenues.

But, he said, “We need to continue to convince the citizen that this is something that has ben transformational for our community. You’ve heard the saying ‘you can’t see the forest for the trees’—many Loudoun citizens can’t see the benefit for the buildings.”

That came to a head a few years ago during fights over possible power line routes and unpopular rezonings, he said.

Rizer and others in the room said Loudoun came to be the data center capital of the world in large part through his ambitious plans, as well as a confluence of fiber connections, energy infrastructure, and highly-trained workforce, along with support from a series of Boards of Supervisors.

And former state delegate and QTS Chief Hyperscale Officer Tag Greason said data centers create more jobs than the handful of people they employ.

“If you look at the parking lot, there’s 600 contractors that come to the data center every day,” Greason said. “…It is an amazing ecosystem. People say, QTS only hired 20 people. Yup, but we employed indirectly a thousand people to build that.”

However others also touted data centers’ relatively small direct impact on the tax base—based on how few people data centers employ per facility.

Data center executives in the room said aside from the tax benefits to the locality, the industry has also been central to the push for more green energy.

Erich Sanchack, Executive Vice President at Digital Realty—a company that in particular has previously faced criticism from its residential neighbors—said that data center market has also become a “strategic asset” for the United States. And while data center companies in recent years have put more into making their formerly imposing, featureless buildings more attractive, he and others also discouraged regulating their looks.

“I would discourage any kind of regulating pretty, you can’t regulate pretty,” Sanchack said. Instead, he suggested working with data centers to see what they can do “versus coming up with a regulation of what it is, and then getting a cookie cutter of that.”

They also discouraged regulating the industry in other ways.

“There’s an ecosystem that’s been built, taxes, power, people, location—it’s working,” said Brian O’Hara, Vice President at CloudHQ. “Guardrails are okay, but meddling is going to do damage.”

Warner also told the industry representatives in the room he would like to attract their projects to less-wealthy areas of the state like south-central and southwestern Virginia—”if any of you were to ever be willing to look at southside or southwest, I will move heaven and earth in terms of state and federal incentives.”

After the meeting, Warner said he hadn’t “fully appreciated” just how much tax revenue the industry generates for the local government. And, he said, “I still would love to see this benefit spread more around the Commonwealth… and I think there is a recognition in terms of future design, you’re going to have to make these structures more attractive.”

5 thoughts on “Warner Hears of Data Centers’ Local Impact

  • 2020-02-29 at 3:56 pm
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    The county could have ordered them built underground. They didn’t. You can smear lipstick across these big, square, ugly pigs but it doesn’t change anything. I’d rather pay 3 or 4 cents more on the tax and have parks, open space and other land uses available. But hey, I’m sure they’re taking the “don’t regulate us” stance because it’s best for us taxpayers…

    • 2020-03-03 at 12:03 am
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      If you’re opposed to Data Centers and the revenue they bring, that’s fine. But you must base your opinions on facts. The facts are that without data center revenue, the tax rate would not be 3 or 4 cents more. It’d be 30 or 40 cents more. Secondly, you suggest the land would otherwise be open space or parks. Not necessarily. The county doesn’t own the land. Private folks do. If they don’t develop it with data centers they’d develop it with something else (that you’d probably object to.) So, it’s either data centers with lots of revenue and little impact on roads and schools or something else with high road impact and high student generation. Your choice. But use facts when getting to that decision.

  • 2020-03-03 at 11:13 am
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    I can’t help but think that this might be like building massive warehouses in 1990 to store floppy discs. What will happen to all these buildings when the data they store can be stored in something the size of a brick? Maybe in 10-20 years, we’ll have most of these massive buildings sitting empty.

  • 2020-03-05 at 9:24 am
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    Listen carefully to Senator Warner’s comments and then ask yourself if he truly represents you in Loudoun as he tries to influence data centers to go south. This is done at the same time Virginia “leaders” continue to allow the composite index to steal hundreds of millions yearly that should be coming back up to Loudoun from sales taxes collected to support our schools which are literally billions of dollars behind in construction needs. Politicians like Warner, Northam and Kaine harvest northern Virginia for votes and then bleed us whenever possible to placate other parts of Virginia that don’t charge themselves anywhere near the property tax rate Loudoun does. This is insulting to anyone who pays attention! 🙂

  • 2020-03-06 at 11:30 am
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    The Board of Supervisors (BOS) , Tim Hemstreet, Loudoun County Economic Development (aka the The Godfather of Data Center Alley, Buddy Rizer), Loudoun County Economic Development Advisory Commission (EDAC), Data Center Coalition….as noted in today’s EDAC meeting are all unable deliver any other industry that could replace the economic impact of data centers. Economic Development goal and policy is to provide a diverse economy for all Loudoun County and not to be reliant upon a single industry. This has not occurred, nor will it occur given the lack of thought leadership by all parties listed above and especially Godfather of Data Center Alley.

    Mr. Rizer’s salary should be measured by his sole ability to attract new industries and not sole measured by data centers. Simply Mr. Rizer did not create the data center industry in Loudoun County. He was originally employed at DC101 along with his colleague the Greaseman (an reprehensible and offensive radio personality that attacked many ethnic classes), plus across the river in Baltimore spinning records at 98 Rock during the early days of the dot com industry. BTW Mr. Rizer’s salary and other government official salaries did not go down during the great recession when many residents in Loudoun sufferred great economic losses. Hmmm! Government does not operate like private enterprise. Even if Mr. Rizer claims it does in multiple articles / presentations that he / Loudoun County founded / created it all (aka Al Gore, Barack Obama). Contray to Mr. Rizer / Loudoun Government did not self fund Data Center Alley! Shame on Mr. Rizer / Loudoun Government and all parties above for the self proclamation.

    The BOS should take immediately official actions requesting that Buddy Rizer publicly denounce at a BOS meeting the use of term the Godfather of Data Center Alley and his previous employment. Many in Loudoun County believe the term “Godfather” is a ethnic term to repress the views of others with physical harm or restraint (Mario Puzo in the movie, The Godfather) similar to comments of Mr. Rizer’s former colleague, the Greaseman. Hmmmm!!!

    Fiscal Conservative policies are need now during great economic prosperity that the BOS, Mr. Hemstreet, Mr. Rizer, EDAC, Data Center Coalition did not create. Private market investments created prosperity. Government should restraint spending!

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