Henrico officials expect pause in new data centers
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Henrico officials don't expect more data centers to come to the county anytime soon — signaling a dramatic shift after years of rapid growth in one of Virginia's busiest hubs.
Why it matters: Public opposition, a lack of appetite among county leaders to approve new projects and a recent state tax on data centers are among the reasons why, Axios has learned.
Driving the news: Henrico utilities director Bentley Chan tells Axios that "county leaders have expressed a non-desire to have [new] data centers because we've heard the feedback from the public."
- They're also "not looking for that type of development in the county" and are "not necessarily interested" in advancing the rezoning cases most projects would require.
- Then there's the new monthly energy consumption tax on data centers that went into effect July 1 and will sunset in 2028 — on top of the county increasing its data center personal property tax rate last year.
- Chan says a combination of the above is why the county isn't seeing many new data center applications.
Zoom in: Henrico planning director Joe Emerson offered a similar assessment during a Board of Supervisors meeting this week, saying developers aren't exactly "knocking down" the county's door with proposals.
- Emerson also doesn't anticipate that will change.
By the numbers: Henrico currently has 37 data centers. At least 17 more, approved years ago, remain in the pipeline.
Reality check: The slowdown isn't because Henrico has run out of land, Chan says.
- Local resistance overall has grown alongside the industry, as residents raise concerns about noise, land use, power demand and, most recently, its water use.
Zoom out: It also comes as several counties across Virginia consider pausing data center development, including Loudoun, or banning them, like Front Royal is proposing.
- Sen. Glen Sturtevant, who represents Chesterfield, called on Gov. Spanberger on Thursday to issue an immediate statewide moratorium "while Virginia determines whether data center development should be permitted."
Meanwhile, water remains one of the biggest flashpoints in Virginia's data center debate.
- In the Richmond region, a recent state report found that there's little room for major new groundwater withdrawals.
- That changes little for Henrico, Chan says. The county has long required data centers and other industrial users to connect to its public drinking water instead.
Yes, but: Henrico is expanding its water system to accommodate decades of growth, from approved data centers now being built to new neighborhoods, hospitals and more.
- That includes larger pump stations and the incoming Cobbs Creek Reservoir, set to finish by 2028.
- Henrico has the capacity to treat over 100 million gallons a day, Chan says. The county uses about 30 million to 40 million.
- Data centers account for less than 2% of Henrico's daily treated water use, according to the county. Only one ranks among its top 10 water users.
What we're watching: Where data centers look to next.