Henrico supervisors approve rezoning for potential data center complex in Sandston, which also could include AI users

Following about four hours of discussion and public comment May 14, the Henrico Board of Supervisors approved Richmond developer Hourigan’s rezoning plans for a 622-acre advanced manufacturing and data center complex to be known as White Oak Technology Park II in Sandston, despite largely negative public feedback during the meeting and before the Henrico Planning Commission in April. This complex will be located at the southeast corner of the I-64/I-295 interchange, with construction likely to start within two or three years and buildout possible within a decade.

Resident concerns focused primarily on three categories: environmental impacts, largely around water and energy use; losing a portion of the Savage Station Battlefield; and noise and air quality harms to neighbors. But unlike April’s planning commission hearing, several other residents spoke in support of the project, particularly citing job creation.

Board Chair and Varina Supervisor Tyrone Nelson emphasized that citizen feedback had made a difference in the case.

“[E]ven though it’s not everything that you may want, a lot of these things that have been pushed, changed. . . have been because of those persons who are speaking out,” he said. “Even though you may leave frustrated that we don’t vote the way you want us to vote, I pray and hope that you can see the value in the work.”

Attorney Andy Condlin, who represented Hourigan in the case, told supervisors that a number of potential users have expressed great interest in White Oak II. He emphasized that although Hourigan could fill the site entirely with interested data center users, the company also has had interest from advanced manufacturing users and added that artificial intelligence companies were likely to be among the future tenants.

Varina resident Gray Montrose told supervisors that “finding out this is a totally different kind of development, with a totally different kind of uses” concerned her because it was “piling on to the factories upon factories already in the East End.”

But Nelson said that a second technology park was necessary because White Oak Technology Park was already largely utilized.

“Some of those parcels are already spoken for, they just don’t have buildings on them,” he said.

Some citizens had urged the board, both in person and in writing, to defer the case and any others related to data centers until after publication of a report about the impact of data centers in Virginia due later this year from the Virginia Joint Legislative Audit and Review Commission, an agency that provides oversight and analysis to state lawmakers.

But Nelson said that since any new regulations that may ultimately be suggested by that report and adopted by the General Assembly automatically would apply to data centers statewide, including any built on the Sandston site, waiting for the report was unnecessary.

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Addressing citizen concerns about air quality impact of data centers, Condlin noted that particles pose a risk to data center equipment and so the developer had a vested stake in the issue. But when questioned repeatedly by Three Chopt Supervisor Misty Whitehead and Nelson, who even asked him to confer with the developer in the hallway, he said that Virginia Department of Environmental Quality reports were public and that the nearest testing station was 10 miles away, so Hourigan could not proffer to perform onsite testing or share internal air quality tests.

“We’re going to meet whatever the DEQ standards are and the state standard,” Condlin said. “I know that’s not the answer people want to hear, but that’s actually the standard everyone is held to and there’s a reason for that, because it’s continuing across the state so we don’t have different standards for different jurisdictions for different industries based on the whim of whatever the concern is at that particular time.”

He added that Virginia was ranked No. 3 nationally in air quality despite having the highest concentration of data centers in the country.

“The air quality issue really is not a big issue in Virginia,” said Hourigan CEO Mark Hourigan.

County officials do not share the concerns raise by some citizens about the potential of massive water usage by the data centers, since cooling techniques for the computer servers they house have changed in recent years. Henrico Public Utilities Director Bentley Chan told supervisors “we expect the water use to be minimal.”

Nelson asked Hourigan officials about the requests made by citizens that the developer utilize renewable energy.

“These concerns came from [the Henrico Conservation Action Network],” Nelson said. “They also have come from at least half of the board of supervisors.”

But, Hourigan officials said that it wasn’t feasible to proffer (voluntarily offer) the purchase of a specific form of alternative energy for the development.

Addressing concerns from some citizens who argued that the development would amount to the loss of agricultural and potential park land, Henrico Planning Director Joe Emerson said that “while the site is currently zoned for agricultural uses and inquiries about the loss of agricultural land have been received, long-term agricultural use is not envisioned by the 2026 [Comprehensive] Plan.”

The designation of a portion oft he site as “recreational” in land use plans was made because it had been donated by a previous owner, Emerson said, but it was viewed on a long-term basis by county officials as an economic development site.

The site will contain about 35% open space, well above the 10% required, Emerson said, and Hourigan committed that existing vegetation would be maintained to the greatest extent possible and that 50% of all new plantings would be native species. Further, since rooftop cooling equipment would prevent the use of solar panels on the buildings, the developer pledged $5 million towards the installation of rooftop solar panels that will be installed on 250 to 300 homes in Henrico instead.

In response to citizen concerns, Hourigan also agreed to only install LED lights on the site and has committed to LEED Silver design standards and 60% heat-reflective roof coatings.

As for the historical nature of the site, Emerson pointed to the developer’s commitment to perform a Phase I archeological and culture study before submitting its first plan of development, since the site will be developed in phases. (A Phase I study is for identification of historic resources and to assess the need for a further Phase II evaluation.)

Addressing noise concerns, Condlin told supervisors that during normal operation, similar data centers caused no more noise than any office facility. Hourigan also committed to a baseline sound study before the first plan of development to limit sound levels to 70 decibels during the day, equivalent to a washing machine, and 55 decibels at night, equivalent to a refrigerator.

Nelson cited similar facilities at which sound had traveled up to 2.5 miles and asked who would ensure the facility met these standards. Emerson explained that the Henrico Planning Department has sound inspectors, but that the largest sound issue in the area is Richmond International Airport. Further, he said, the most significant onsite noise pollution at other sites was from now superseded cooling technologies.

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White Oak Technology Park II is not the only new data center complex being planned in the region. Hanover County approved a proposal in March for a 1,200-acre data center complex northeast of Ashland, while Powhatan County will hear a proposal in June for a 120-acre data center site on US-60 west of Midlothian.

Tuckahoe Supervisor Jody Rogish noted that the height and sound restrictions for the Hanover site were less than what Henrico required, plus the environmental impact would be greater because so much supporting infrastructure was not already in place there. Whitehead added that the proffers on Hanover’s recently approved data centered “paled” in comparison to what Henrico was requiring.

With that demand in mind, some residents have criticized the county’s lower property tax on data centers and the return on investment. Henrico charges $0.40 per $100 of data center property after lowering the tax from $3.50 in 2017. Fauquier, Loudoun, Fairfax, and Prince William Counties charge between $3.70 and $4.57 per $100, with Prince William increasing their tax from $2.15 in April.

Nelson, foreshadowing the county’s announcement two days later about plans for a $60-million housing trust fund using county tax revenue from data center developments, said that his primary concern is how Henrico uses the money.

“There’s a lot of revenue that will come in because of this case alone” so “we need to dedicate this funding to something that could really help people. People who don’t even know that we’re even having this conversation. Next year, two years, three years from now, they’re going to look back at the county that they live in and say, ‘Wow, my county led the way in something.’”

Nelson also admitted that the tax may need to be rethought, especially given his unique perspective as the only sitting supervisor who was on the board in 2017, when he voted for the decrease.

“There are a lot of things that have come forward about the impact of data centers in communities that I had no idea in 2017 that would come forward,” he said. “In 2017, it made sense to have a $0.40 tax rate for us to drive business. Maybe it doesn’t make sense anymore.”

He promised that the board would review the tax in the next budget season and would consider lowering the real estate tax to compensate.

“That’s a win-win for the community.”