Amazon Web Services plans to invest $11 billion in Louisa County for data centers
Amazon Web Services plans to invest $11 billion in Louisa County for data centers
Amazon Web Services plans to invest $11 billion in Louisa County by 2040 to establish two data center campuses, the county announced in a press release Wednesday afternoon.
The project is part of a planned $35 billion investment by AWS to build data centers across Virginia, a deal that Governor Glenn Youngkin announced in January.
According to the county’s release, the campuses will be in the newly created Technology Overlay District, a special zoning designation approved by the Board of Supervisors earlier this year to attract lucrative hi-tech industry. The district covers some 6,000 acres, strategically located near high-voltage transmission lines and other infrastructure necessary for tech sector development, in parts of central, southern and eastern Louisa County.
County Administrator Christian Goodwin said in an email last week that one of the campuses will be built near the North Anna Nuclear Power Station, which sits on Lake Anna at the county’s northern edge, while the other is slated for property near the Northeast Creek Reservoir off Route 33 in central Louisa.
The data centers will house computer servers and networking equipment that support remote work, streaming and other online activities, according to the release. They’re expected to provide hundreds of jobs, making AWS one of the county’s largest private-sector employers, and contribute significant tax revenue that could support schools, essential services, and investments in parks and roads.
Local officials hailed the partnership with AWS as a watershed event for the county, touting it as an historic opportunity for large-scale economic development that would bulk up the tax base and create jobs while generating “less traffic and related community impacts” than other types of development.
“This type of opportunity to create hundreds of high-quality jobs and significant investment in Louisa is why responsible economic growth is a priority for the county. We’re proud to partner with AWS to expand their operations in a world with a growing demand for cloud computing infrastructure,” said Louisa County Board of Supervisors Chair Duane Adams.
“Any chance to provide better job opportunities for our citizens right here in the county is a valuable one. Coupled with the revenue support for community enhancements and essential services, this project is a great opportunity for Louisa,” Patrick Henry District Supervisor Fitzgerald Barnes said.
AWS also expressed excitement about coming to Louisa and expanding its investment in Virginia.
“We are proud to reinforce our long-term commitment to the Commonwealth with our plans to invest $11 billion in Louisa County by 2040,” said Roger Wehner, Director of Economic Development for AWS. “Virginia hosted our first data centers when we launched in 2006, and over the last decade AWS invested more than $51.9 billion in the Commonwealth while supporting thousands of jobs. This new investment in Louisa County builds on our rich partnership with the state and we look forward to delivering and supporting programs that will benefit Louisa County residents.”
According to Goodwin, the county could receive at least $25 million in annual tax revenue from the campuses at full build out, which is expected to take 15 years. That revenue equals nearly 17 percent of the county’s $148 million operating budget for Fiscal Year 2024 and more than doubles the taxes paid by Dominion Energy for the North Anna Power Station last year.
But the $25 million windfall could be reduced because of tax breaks and performance incentives that the county is expected to offer AWS. Supervisors will consider approval of an initial performance agreement with the company at its September 5 meeting, which wasn’t publicly available at publication time. The agreement is expected to lay out at least some of the tax discounts and other financial incentives the county plans to provide while also setting benchmarks for the company related to capital investment, job creation and revenue generation.
Louisa County Community Engagement Manager Cindy King said in an email on Friday that the county is considering offering Amazon a reduction in the business personal property tax rate (BPP), which sits at $1.90 per $100 of assessed value. Virginia law allows localities to provide tax breaks on qualifying data center equipment via a lower BPP rate and accelerated depreciation schedule.
The county is also expected to offer a range of other perks. Goodwin said that any local incentives provided to AWS would be a proportion of new revenue generated by the centers and subject to performance agreements approved by the board.
In addition, the company is expected to benefit from state incentives green-lighted by the General Assembly in February. Those incentives essentially exempt AWS from paying the state’s sales and use tax on data center equipment through at least 2040, provided the company invests $35 billion in data centers in the commonwealth and creates 1,000 jobs. The legislation also makes available some $140 million in state grant funding for infrastructure investment, workforce development and other project-related costs. That funding would require a 2 for 1 local match and is contingent on the company meeting certain investment and job creation goals.
Amazon’s plan to expand into Louisa comes amid a burgeoning demand for cloud computing services and the emergence of artificial intelligence technology that requires vast data crunching capacity. It also comes as data center developers encounter significant hurdles in their effort to expand in parts of Northern Virginia, the global epicenter of the industry.
Dubbed the “data center capital of the world,” the region is home to hundreds of the warehouse-like facilities, mostly in Loudoun, Prince William and Fairfax counties. About one-third of the world’s internet traffic travels through the area and the centers, owned by tech behemoths like Google, Meta and AWS, contribute roughly a billion dollars in local tax revenue annually. But the power-hungry facilities are straining the region's power grid and upsetting some neighbors, who complain that their proliferation is creating noise pollution, marring viewsheds, impacting property values and threatening rural areas and historic resources.
Data center developers have looked south to find friendlier terrain including cheaper, more plentiful land and robust utility infrastructure. Local officials seized on the opportunity to attract the developers earlier this year when they created and adopted the Technology Overlay District, which permits data centers and other tech sector development by-right—meaning the uses don’t require a public approval process—and lays out development standards designed to mitigate their impact and meet industry needs.
While supervisors approved the TOD in April in a 6-1 vote, the district has met resistance from residents who live near properties selected for inclusion. Some neighbors have echoed concerns raised in Northern Virginia including that data centers would detract from the county’s rural character, generate noise pollution from the large fans and other equipment required to cool the servers inside and overwhelm local infrastructure.
County officials have argued that the TOD includes tight development standards to protect neighbors including mandating wide perimeter buffers and a cap on daytime and nighttime noise that only slightly differs from what’s currently permitted on agriculturally-zoned property.
In Wednesday’s release, officials reiterated that the TOD is designed to protect the community by targeting and controlling tech sector development.
“Bringing a leader like AWS to a rurally focused locality requires a careful consideration of industry needs and the community atmosphere that our citizens expect,” Jackson District Supervisor Toni Williams said. “Louisa’s TOD represents the strictest development controls in the county, and we’re pleased to find a partner that offers such significant benefits while meeting those standards.”
