ALEXANDRIA, VA. — The construction of expansive, windowless warehouses that accommodate rows of rapid servers—essential for powering modern technology via smartphones and computers—is increasingly common throughout the United States. These data centers are emerging in a variety of settings, from urban centers to suburban neighborhoods.
Over recent years, the demand for data centers has surged, driven largely by the exponential rise of cloud computing and artificial intelligence. Consequently, both urban and rural authorities are vying for lucrative partnerships with major tech firms eager to establish data hubs in their locales. However, as these data centers extend into more populated regions, often adjoining residential areas, community members are voicing their concerns regarding the potential economic, social, and environmental impacts on their neighborhoods.
In Northern Virginia, the landscape is dotted with over 300 data centers, particularly in the western counties where they closely border serene bike trails and residential developments. One of the most recent proposals for this area, named Plaza 500, plans to erect a massive 466,000-square-foot facility and an adjacent electrical substation mere feet away from homes, playgrounds, and community centers. The proposal, put forth by Starwood Capital Group, a private investment company led by billionaire Barry Sternlicht, aims to entice Fairfax County officials with promises of job creation and increased property tax revenues. However, critics argue that these incentives fall short of mitigating the negative effects tied to such close proximity of data centers to residential living spaces.
Tyler Ray, a prominent advocate opposing this development, has expressed profound concerns regarding the pressure that additional data centers could place on Virginia’s power grid, which already supplies over a quarter of its output to these facilities. Projections indicate that this percentage could escalate to as high as 46% by 2030 if construction continues at the current trajectory. Additionally, reports suggest that a mid-sized data center uses as much water daily as 1,000 households, heightening worries about water scarcity. Ray is also troubled by air quality issues, primarily because the large diesel generators necessary for powering the data centers contribute significantly to toxic emissions.
Despite their efforts to resist the ongoing development, Ray and other residents have found it challenging to sway local governance. Although a recent directive required all newly proposed data centers to conform to escalated zoning regulations, the Plaza 500 project has received an exemption. “How can an average resident, even those deeply engaged, confront the robust data center industry?” Ray lamented during the supervisors’ voting session.
For local governments, establishing data centers brings in a significant financial advantage. Virginia’s Governor, Glenn Youngkin, highlighted in 2024 that existing data centers have contributed around $1 billion in tax revenue. While the typical data center generates a relatively small number of direct jobs, often below 100 positions, tech giant Google recently claimed that its investment in a neighboring county led to around 150 direct jobs. However, this figure is met with skepticism from opponents, who argue the disruptions caused by these facilities overshadow the benefits. Proponents, on the other hand, emphasize the abundance of indirect job opportunities created through construction and technology support. Google claimed that its investment generated approximately 2,730 indirect jobs as a result.
Kathy Smith, Vice Chair of the Fairfax County Board of Supervisors, supported the Plaza 500 proposal, contending that the escalation of data centers in the region is unavoidable, thus the county should benefit from them. “We must consider the broader perspective,” Smith stated. “Data centers are here to stay.”
On the West Coast, in Morrow County, Oregon, Amazon Web Services (AWS) has established multiple data centers around the small town of Boardman, which is situated amid vast agricultural land alongside the Columbia River. In the previous year, AWS contributed around $34 million in property taxes and fees as per their agreement despite previously receiving a tax grant of $66 million. These funds have been crucial for enhancing local infrastructure and services, contributing towards various improvements like a new ladder fire engine and supporting community initiatives such as $5,000 grants for new homebuyers, totaling at least $2.8 million.
“This road we’re traveling on? It wouldn’t have been built without AWS,” remarked Boardman Mayor Paul Keefer, as he traversed the town and pointed out construction efforts underway.
AWS has formed strong ties with local officials such as Keefer and Police Chief Rick Stokoe, who are in positions to vote on tax incentives for the corporation. This close relationship has raised eyebrows among some former county commissioners and residents. Skepticism surrounding the arrangements surfaced when three former elected officials were accused of approving data center contracts while simultaneously holding investments in a company that partnered with AWS for fiber optic cable provision. They settled an ethics complaint by each paying $2,000.
Although these officials no longer serve in their positions, recent agreements between AWS and Morrow County, valued at an estimated $1 billion in tax breaks over 15 years for constructing five additional data centers, have raised similar concerns. Former Morrow County Commissioners Jim Doherty and Melissa Lindsay had, in 2022, advocated for higher tax contributions from AWS during negotiations but were unsuccessful. “We didn’t want to jeopardize our relationship. However, we believed better arrangements could have been achieved,” said Lindsay, reflecting on the situation.
