Facebook finds perfection at White Oak

As Facebook officials scoured the country seeking a location for their eighth U.S. data center, they weren’t willing to settle.

At the urging of executives with Dominion Energy, they visited several sites in Northern Virginia and the Richmond region. Twice, they toured Henrico’s White Oak Technology Park in Sandston without even identifying to county officials which company they represented.

“They basically said they were looking for the perfect site,” recalled Henrico Economic Development Authority Executive Director Gary McLaren.

Ten months after Henrico officials became heavily involved with the efforts and some three years after state officials began wooing Facebook, the ubiquitous social media giant found its perfection in Henrico. The company's announcement earlier this month that it will build a $1 billion, 970,000-square-foot data center at White Oak Technology Park in Sandston was a stamp of validation on an industrial park that didn't actually need one.

Henrico fought off competition from other potential sites – including at least one in tech-heavy Loudoun County in Northern Virginia – using (in part) a recently implemented tax slash on data centers that will save Facebook millions.

The facility will sit on 328 acres near the Technology Boulevard-Portugee Road intersection and is expected to open sometime in 2019. Facebook's long-term plans for the site include the possibility of adding three more buildings – totaling another 1.5 million square feet. The initial phase, though, will create thousands of construction jobs and 100 permanent Facebook jobs, most of which are expected to pay more than $90,000 annually. The addition of the other three buildings could create another 140 permanent jobs.

Closing the deal wasn’t easy.

"I've been doing this 40 years," said McLaren, "and this project is probably the most intense I've worked."

Facebook officials wanted to have every necessary agreement – water, sewer, permitting, plan of development, among others – in place before they agreed to purchase the site, McLaren said. Many of those actions typically take place after a company has closed on land it intends to develop, but county officials knew that these were hoops worth jumping through in advance if doing so would help land the social media giant – even though there was no guarantee that the project actually would materialize.

"We knew we had competition until the end," McLaren said. "There were other options on the table. We were not counting our chickens."

The county's Planning Commission approved a plan of development for the project – stealthily dubbed "Project Echo" to preserve its anonymity as it made its way through the POD process – Sept. 14.  Delaware-based Scout Development LLC (which will develop the site for Facebook) closed on it 15 days later, purchasing it from Henrico for $10.825 million.

County, state and Facebook officials formally announced plans for the data center during a press conference Oct. 5.

“For many years, Virginia has served as a key hub for global internet traffic, emerging as one of the most active data center markets in the world,” Virginia Gov. Terry McAuliffe said. “Working with companies like Facebook and many others, we are advancing Virginia’s position as a global leader in the technology economy and a world-class home to innovative companies of every size.”

‘This didn’t just happen’

Facebook’s decision to locate at White Oak solidifies the park’s standing as a prime spot nationally for data center users, McLaren said.

"I don’t think I have to rate it,” McLaren said. “Facebook just did.”

The 2,272-acre park contains about 1,600 usable acres, of which about 1,000 will remain available once Facebook arrives. The state conveyed the entire property to Henrico in the mid-1990s, when Motorola Inc. and Siemens AG announced plans to build a $1.5-billion chip manufacturing plant there. That plant opened in 1998 and operated under several different names until it closed in early 2009, costing thousands of workers their jobs.

But in the years since, the park has enjoyed a rebirth. Quality Technology Services bought the original plant in 2010 turned it into a data center. Hewlett-Packard, Bank of America and Lumber Liquidators built facilities there, too.

The park is unique because it’s county-owned (making land negotiations easier for potential users), has substantial water reserves, a dual-feed double-circuit electrical line and is 100 miles from the new MAREA transatlantic cable that connects from Virginia Beach to Spain.

Each of those factors makes it a prime location for data centers, and McLaren and his team of economic development officials have been proactive in their efforts to attract more such users to the park. They’ve spent years attending  data center conferences and targeting users that could be good fits.

“This didn’t just happen,” he said.

Their efforts improved when the county’s Board of Supervisors dropped the tax on computers and other equipment at data centers from $3.50 to $0.40 per $100 of assessed value earlier this year. The move wasn’t made solely to attract Facebook, McLaren said, but “it sort of happened simultaneously.”

Could Facebook’s arrival lead to other prominent users?

Consider that when the company built its first data center in the U.S., it chose the tiny town of Prineville, Ore. A year after that facility opened, Apple opened its own data center across the street. Apple now operates two centers there and is building a third.

“I don’t think there’s any question we’re going to see more data center users [at White Oak],” McLaren said.

Dominion Energy’s role in attracting Facebook was significant. Dominion will serve the site as part of a new renewable rate option called Schedule RF, which it plans to file with the Virginia State Corporation Commission this month. Approval of the option would permit Facebook to offset its annual energy needs with renewable energy delivered to the grid.

The concept also would create opportunities for other large companies to make the same commitment and would provide economic benefits to all of Dominion Energy Virginia’s 2.5 million customers, according to company officials.

Renewable energy options are important to all large data center users, McLaren said. And the new renewable rate option is likely to encourage the development of solar farms in Virginia to serve such users. The first such proposed site in Henrico – slated for Briel Farm just a few miles from White Oak, adjacent to I-295 –  earned approval from the county's Planning Commission earlier this year. Upon development, it could serve the Facebook site, McLaren said.