Supervisors to consider tax incentives for data center projects in western Chesterfield

The Chesterfield Board of Supervisors is slated to vote Wednesday on fixed tax agreements for future data center developments on two assemblages in the western part of the county. (BizSense file)

Following recent EDA-initiated rezonings for two code-named data center developments in western Chesterfield, incentives are being teed up for the planned projects.

Proposed incentive agreements between Chesterfield and two limited liability companies – Skyward Holdings and Aeris Investments – would lock in the county’s personal property tax rate for data centers at its current 24 cents per $100 of assessed value for the future projects at sites near Moseley and Westchester Commons for 30 years.

The Board of Supervisors is anticipated to vote on whether to approve the agreements at its meeting Wednesday. As part of the deal, if Chesterfield were to increase the data center tax rate after the approval of the agreements, the county would provide annual grants to the two LLCs equal to the amount of the rate increase for the remainder of the 30-year term.

According to county memos, Chesterfield’s current data center rate, which was set in 2019, helped to attract the projects and the proposed fixed rate agreements are intended to further incentivize the developments. County officials anticipate the projects will provide economic benefits to Chesterfield, and under the agreements the properties would generate tax revenue at a capped rate during the term.

The county’s pending agreement with Skyward Holdings would grant the incentive to future facilities on a 871-acre area on the northern end of the Upper Magnolia Green West site. The land is a portion of a larger 980-acre assemblage that includes 4200 Moseley Road and was rezoned in May.

Dubbed Project Skye, the development would be “a large-scale project, consisting of one or more data centers,” and related facilities, per the contract.

Under a separate agreement, Chesterfield would provide the same fixed tax rate for a project on a 342-acre site referred to as Project Loch in the county’s pending contract with Aeris Investments. The Aeris site is the majority of the Watkins Centre South property at 750 Watkins Centre Parkway, which was also rezoned last month for data center development.

That site is near Westchester Commons, and would likewise be home to one or more data centers and associated facilities, according to the agreement.

Both projects are subject to noise and water usage limits and also feature road improvements, which were made requirements of the projects as part of their zoning approvals in May.

The zoning requests were filed by the Economic Development Authority earlier this year. More than 1,300 acres were rezoned between the two separate requests. Chesterfield officials said the rezonings were motivated by conversations between county staff and an unidentified prospective data center operator.

The proposed tax agreements are contingent on timely progress on the development of data centers and associated infrastructure, as well as on the purchase of property from the EDA, which owns some of the land subject to the proposed agreements but has yet to close on the entirety of the project sites.

The agreements would be divided into three terms. The first term would start on the agreements’ effective date of June 25, the anticipated date Chesterfield supervisors will OK the agreements, and would end 10 years after the issuance of a certificate of occupancy for “an operational data center building on the property” in both agreements. There would be two, automatic 10-year renewals to follow the first term, subject to sufficient development of the sites.

The agreements require Skyward and Aeris to buy at least a portion of the properties within 36 months of the effective date. Failure to secure the property would lead to the agreements being canceled, as would termination of the real estate option agreements between the LLCs and the Chesterfield EDA prior to 36 months after the effective date.

It hasn’t been announced who would operate the data center facilities planned for the two sites. It wasn’t clear who is behind the LLCs that the county would make its incentive agreements with. Both entities are registered to addresses in Delaware and list Michael Montfort as the manager of each, per state filings. It’s unclear exactly how Montfort is involved in the projects.

The pending incentive agreements come as Chesterfield officials are considering new restrictions on where data center projects can be located in the county as part of an update to the zoning ordinance. Last month, Chesterfield planning commissioners voted to recommend denial of a data center project near Chester.

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