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.”