Henrico supervisors defer votes on proposed data center rule changes

Henrico supervisors and staff held a joint meeting with the Planning Commission on the proposed data center regulations Thursday. (Jonathan Spiers photo)

Henrico supervisors’ attempt to rein in data center development could end up more restrictive than originally proposed.

The board on Thursday deferred votes on proposed data center regulations that would require supervisors’ approval – and public hearings – for projects outside of the county’s White Oak Technology Park, where data centers would have remained a by-right use.

After a three-hour joint meeting with the Planning Commission that saw nearly two dozen speakers take part in a public hearing, Supervisor Tyrone Nelson, whose Varina District includes White Oak, led the board in deferring the votes to the board’s June 10 meeting.

Nelson also directed staff to revise the proposals so that public hearings would be required of all new data centers across the county, including any proposed in White Oak. The revised rules would require all data center projects to obtain provisional-use permits from the county, eliminating the possibility of such projects being allowed as a by-right use according to existing industrial, office or business zoning.

The deferrals were a surprising conclusion to a meeting in which Nelson and other supervisors repeatedly maintained, in the face of speakers who argued that the rules were being rushed, that approving the regulations would allow the board and the public more say and control in data center development and locations in the county.

Facing criticisms from speakers that the hearing was being held only weeks after the proposals were introduced and advertised, supervisors stressed that the proposals were in response to concerns they had heard from the public about the rise in data center development in the county and potential impacts such as energy use, water service, noise, air quality, and appearance and visual buffering.

Supervisor Misty Roundtree, who presided over the hearing as the board’s representative on the Planning Commission, said the reason for the proposals “started with a concern that we had as a board about where the direction of data centers in Henrico County was going.”

“There has been a significant amount of change in a relative short period of time with how we started off with data being done on a small-scale basis…and now having these super-centers,” she said. “A lot of localities and states and even the federal government have been trying to catch up with the technology as it has developed.”

The proposed Technology Boulevard Overlay District is highlighted in red.

Last year, the Henrico board approved a 600-acre data center project in Varina that has drawn the ire of opponents and some area residents. The project was proposed by Atlantic Crossing LLC and Vienna Finance Inc., which subsequently sold the site to data center giant QTS.

The first speaker to address the board in Thursday’s hearing was Glenn Miller, vice president of Vienna Finance and manager of Atlantic Crossing, who noted that they also own an additional 175 acres across Interstate 64 from the 600-acre site that has been likewise planned for data center development.

He said the 175 acres is zoned for data center use but would require a provisional-use permit under the rule change, potentially jeopardizing over $300,000 spent on the site so far based on assurances from county staff that data centers could be developed there by-right.

“This was spent in good faith in terms of engineering and wetlands in order to potentially create a data center park due north of 64,” Miller said. “In the interest of fairness and equity, we think that this use should be grandfathered and that the existing overlay district for the Technology Boulevard should be extended to include these 175 acres.”

Miller’s concerns echoed those of Centra Logistics, whose representatives also addressed the board about a similar situation with a 1 million-square-foot data center campus they’ve proposed for about 200 acres behind the Fareva pharmaceutical facility off Darbytown Road, just outside the proposed overlay district.

Noting his group had put more than $700,000 into the project before the rule change was conveyed, Centura’s David Wagner said during the hearing, “What should I have done differently? Why didn’t Henrico County just come out and say they don’t want any data center development outside of White Oak?

“There were so many opportunities with so many different departments in Henrico that we met, and we were always given assurances that our project could move forward,” he said.

White Oak Technology Park is home to the bulk of the existing data centers in Henrico.

Also addressing the board was Andy Condlin, a local land-use attorney who represented Atlantic Crossing in its 600-acre rezoning. Condlin, who has represented cases before the board for 30 years, maintained that the board’s actions in proposing and considering the new rules were abnormal.

“I understand the desire to have a public dialogue about creating guardrails for development of an industry that has anticipated growth and discussion of potential impacts of that growth. It makes good policy sense to have that discussion. My concern, however, is this process, which is highly unusual in my experience with 30 years in Henrico County.”

Condlin said the hearing was being held only seven weeks after the proposals were first introduced, and two weeks after the public was notified about it, limiting the amount of time they had to understand the proposed changes.

“I think you’re seeing some of the frustration that comes with that,” Condlin said.

Prior to the hearing, Planning Director Joe Emerson told the board that he was working with the county attorney’s office on some cases where requests have been made for existing data center proposals to be vested.

Following the hearing, the Planning Commission voted to recommend the changes to the board, which then took a 10-minute break before considering a vote. When the meeting reconvened, Nelson conveyed his position before leading the board in deferring the votes, and directing staff to redraft them without the proposed overlay district for White Oak.

“I was a part of the QTS rezoning last year,” Nelson told the audience, referring to the 600-acre Atlantic Crossing project. “One of the reasons I voted for the QTS rezoning last year was because we were able to get $60 million committed for affordable housing that will impact people for years to come.”

Nelson was referring to Henrico’s housing trust fund that was announced last year and is to be fueled by economic development revenue generated from data centers specifically.

“The reason that I support this is because it keeps us from no longer being at the mercy of zoning of land,” Nelson said. “Now the board gets the opportunity to hear each individual case; you get the opportunity to speak on each individual case.”

The board will reconsider the proposals at its June 10 meeting, allowing time for the reworked ordinances to be drafted and advertised for another public hearing at that meeting.

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