Amazon Dealt Setback In Plan For $6B Virginia Data Center Campus

Officials in King George County, Virginia, have voted to renegotiate an agreement with Amazon needed for the tech giant to move forward with a planned 869-acre data center campus. 

The decision by the King George County Board of Supervisors, first reported by The Fredericksburg Free Lance-Star, could walk back a deal with Amazon, approved by the body less than a month earlier, authorizing tax incentives for a proposed $6B data center campus at the site of the decommissioned Birchwood power plant.

The reversal comes amid growing political opposition to data center development in Virginia and just as Amazon is rapidly expanding its footprint across the commonwealth. 

Utility Birchwood Power Partners first proposed a data center campus on the site of its former power plant in July, with Amazon revealed as the intended user soon after. According to planning documents filed with the county, the project’s initial phase would entail 4M SF of data centers across eight buildings, with a pair of electrical substations.

Subsequent phases could bring the facility’s full build-out to 7.5M SF over 15 years. The campus would be the first major data center project in King George County, located between Washington, D.C., and Richmond. 

While the county approved rezoning for the project in September, officials also negotiated a performance agreement dictating the tax breaks that Amazon was eligible to receive. On Dec. 19, the board approved a deal that granted Amazon a tax rebate equivalent to 10% of its infrastructure costs and tiered tax breaks tied to the tech giant’s spending in the county. 

The agreement likely would have given Amazon a $36M rebate on infrastructure costs and allowed it to pay $1.25 for every $100 of assessed value for information technology equipment compared to $3.25 paid by other businesses in the county, according to Data Center Dynamics. 

But just two weeks later, the board voted to renegotiate the deal. The changes come after significant turnover on the board to start the year, with a skeptic of the project taking over the board's chair position and three of his political allies elected as new board members, according to The Free Lance-Star. The new board chair, Supervisor T.C. Collins, has argued that the additional tax revenue the county was set to receive wasn't enough to justify granting use of county land to a large corporation like Amazon. 

The reversal by King George County officials is the latest indicator of an increasingly challenging political landscape for data center developers in Virginia and other major digital infrastructure hubs. Acrimony over data center projects was a central election issue in Prince William County last year, nearly derailing what is set to be the world’s largest data center corridor. Last week, lawmakers from Fairfax County proposed state legislation that would limit which data centers were eligible for state-level tax incentives. 

This growing pushback comes as Amazon is undertaking an aggressive expansion of its data center footprint in Virginia. The tech giant has pledged $35B in data center development across the commonwealth and has advanced several major data center projects at a handful of sites across the state. Many of these projects are in counties like King George that until now have seen little in the way of data center development.