Data centers in Prince William County could see an increase in the tax rate for computers and peripherals used by data centers as the Board of County Supervisors deliberates on the Fiscal Year 2026 budget. The proposed tax rate for computer and peripheral (C&P) equipment is set to rise from $3.70 to $4.15 per $100 of assessed value, a move that could significantly impact data center operators and businesses utilizing advanced technology.

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Ahead of the Fredericksburg City Council’s recent approval of a Technology Overlay District (TOD) allowing data centers, concerns emerged about whether Dominion Energy would deprioritize power access for the city if the measure had failed.

In an op-ed published by The FXBG Advance, Mayor Kerry Devine warned that rejecting the TOD could push Fredericksburg to the back of Dominion’s “rapidly expanding project list,” potentially delaying or preventing the city from securing the necessary power for a proposed data center campus.

Seeking clarification, Potomac Local News asked Dominion whether the City Council’s decision would have affected Fredericksburg’s place in the company’s project queue.

“Requests for transmission infrastructure to serve large new customers, like data centers, are evaluated in the order they are received,” responded Aaron Ruby, Dominion’s Director of Virginia & Offshore Wind Media. “I believe that’s what was meant by the project queue.”

Ruby did not elaborate on whether any specific localities had been deprioritized in the past, nor did he provide examples of projects being moved to the back of the line.

Background: City Council Approves Technology Overlay District
On February 25, 2025, Fredericksburg’s City Council unanimously approved the TOD, paving the way for the city’s first data center campus. The project, led by The Silver Companies in partnership with STACK Infrastructure, is expected to include between eight and twelve data centers in Celebrate Virginia South.

Fredericksburg joins nearby Stafford, Spotsylvania, and Caroline counties, with multiple data centers operating within their jurisdictions. Proponents say the TOD positions the city to compete for a lucrative data center industry share.

Supporters: Economic Benefits and Strategic Planning
Supporters of the measure argue that the TOD is an essential step in attracting data center investment, which could generate significant tax revenue for Fredericksburg.

“This could bring up to $60 million annually, funding for schools, infrastructure, and helping to keep property taxes stable,” said Councilman Will Mackintosh.

Others believe the overlay district allows the city to set clear guidelines for data center development, ensuring new projects align with Fredericksburg’s long-term vision.

Opponents: Environmental, Transparency, and Health Concerns
Critics warn that the data centers’ immense energy demands could conflict with Fredericksburg’s goal of achieving 100% clean energy by 2035. Environmental activist Alexanna Hengy pointed out that the proposed data center campus could double the city’s energy consumption.

“There are serious concerns about what this will do to our climate goals,” Hengy said.

Some residents also expressed frustration over the speed of the approval process. Former City Council member Matt Kelly criticized what he saw as a lack of transparency, arguing that the city had not provided sufficient details on energy and water agreements before making a final decision.

Additionally, there are concerns about the proposed data centers’ proximity to residential areas. Hengy noted that some facilities would be built within 120 feet of apartment buildings and a nursing home, raising fears about noise pollution and potential health risks for nearby residents.

With the TOD approved, developers must now work with Dominion Energy to assess the site’s power infrastructure. Ruby stated that Dominion will only begin evaluating the project’s energy needs once a data center officially moves forward with development.

“It’s too early to say how much infrastructure would be needed or what the timeframe would be, since that all depends on the size and scope of the development,” Ruby explained.

As Stafford County leaders push forward with plans for a Western Road Network to relieve congestion west of Interstate 95, tensions continue to rise over the future of a proposed Rappahannock River crossing. Discussions at the Stafford Board of Supervisors and Fredericksburg Area Metropolitan Planning Organization (FAMPO) meetings reveal deep divisions over tackling regional transportation challenges, infrastructure expansion, and funding concerns.

While Stafford officials champion a north-south corridor west of I-95, officials in Fredericksburg remain focused on a new river crossing, though disagreements persist over its location, cost, and environmental impact.

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The Fredericksburg City Council voted 7-0 on Tuesday, Feb. 25, 2025, to approve the Technology Overlay District (TOD), paving the way for data centers in Celebrate Virginia South. Today, the city revealed that Central Park developer The Silver Companies and STACK Infrastructure announced an agreement to build as many as 8-12 data sets in the city.

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The Stafford County Board of Supervisors is taking steps to change how data centers are permitted. It is considering requiring a Conditional Use Permit (CUP) rather than allowing them by right for such facilities in the M-2 Heavy Industrial zoning district.

At the February 18, 2025, Board of Supervisors meeting, the members discussed Resolution R25-43, which proposes amending Stafford County Code Section 28-35 and modifying the Table of Uses and Standards to introduce additional oversight for data center developments. To gather public feedback, a joint public hearing with the Planning Commission is scheduled for March 18, 2025.

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Stafford County has received an application for a rezoning and conditional use permit to construct a data center along Olde Forge Drive between U.S. 17 and the Rappahannock River, reports FXBG Advance.

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The Fredericksburg Planning Commission rejected a proposal to create a Technology Overlay District (TOD) allowing data centers in Celebrate Virginia South in a 4-3 vote on Wednesday, Feb. 12, 2025. The decision follows growing concerns over transparency, environmental impact, and infrastructure readiness. Councilman Will Mackintosh, speaking on Town Talk on News Talk 1230 WFVA earlier this month, had championed the proposal, calling it a transformative opportunity for the city, potentially generating $60 million annually in tax revenue. “We wanted to set the rules ahead of time so that developers know what’s expected,” McIntosh said. “This is a chance to fund schools, infrastructure, and hold the line on property taxes.” Despite financial benefits, residents and commissioners raised concerns over water use, noise, and transparency. Former City Council member Matt Kelly criticized the process, stating, "We still don’t have key details on energy and water agreements, yet we’re being rushed into a decision." With the Planning Commission's rejection, the City Council will now decide the district’s fate in a public hearing on February 25. They can either approve the TOD or follow the commission’s recommendation to require Special Use Permits (SUPs) for future data centers, allowing for case-by-case approval.

Mackintosh outlined the city’s long-term planning efforts, which date back to 2018 when Fredericksburg began setting tax rates and policies to align with neighboring jurisdictions. With Northern Virginia running out of space, developers have turned their attention south, making Fredericksburg a prime target for new data center development.

Officials have proposed a Technology Overlay District—a designated 250-acre area in Celebrate Virginia South, near Wegmans and the Fredericksburg Nationals stadium to ensure that data centers fit within the city's framework. This district will allow data centers by right if they meet strict environmental and design regulations.

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On Wednesday night, the Fredericksburg Planning Commission voted 4-3 to reject a proposed Technology Overlay District (TOD) that would have allowed data centers and technology-focused development in Celebrate Virginia South, near the Fredericksburg Nationals baseball stadium. The motion to approve the district failed by a 4-3 vote, and a second motion recommending that the City Council require Special Use Permits (SUPs) for data centers instead passed by the same margin.

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In a unique and chilly demonstration, residents of Fredericksburg gathered Wednesday to protest a proposed data center development near the Rappahannock River by building snowmen.

Organized by the Rappahannock Community Coalition, the “Snowmen Against Data Centers” rally took place just one day after nearly 10 inches of snow blanketed the region. The snowmen were erected on the Mary Washington University Campus, City Hall, and a house off Harrell Road in Stafford County.

The protest comes on the same day of the Fredericksburg Planning Commission meeting, where commissioners took up a proposal to endorse a Comprehensive Plan Amendment, a Zoning Map Amendment applying the Technology Overlay District, and a Zoning Proffer Amendment — which would clear the way to build the city’s first data center. The city council announced it would pursue the data center on an “accelerated” timeline in December but has yet to disclose which firm would develop the project.

A staff report presented at the meeting outlined the city’s rationale for the Technology Overlay District, emphasizing its potential for economic development while balancing environmental concerns and urban planning considerations.

The report detailed discussions on the environmental impact, including protections for the Rappahannock River, increased setbacks from residential areas, and proposed water usage restrictions. Additionally, concerns were raised about noise levels from emergency generators, electricity availability, and impacts on the existing trail network. The proposal also includes measures to promote green energy initiatives and climate goals while ensuring that the development aligns with the city’s broader comprehensive plan.

Environmental and Transparency Concerns

Leading the protest effort was Alexanna Hengy, a local activist and outspoken critic of the proposed comprehensive plan amendment that would allow for constructing a data center next to a nursing home and the Fredericksburg Nationals baseball stadium.

“We’re 100% against it,” Hengy said. “The data center campus would at least double our city’s energy use, making it impossible for us to meet our climate goals—not just as a city, but as a planet.”

Hengy and the coalition argue that the environmental impact of the proposed data center cannot be ignored. Data centers require vast amounts of electricity, which is still derived from fossil fuels.

“They’re trying to build this data center only about 120 feet from apartment buildings and a nursing home,” she said. “That poses a direct health risk to our most vulnerable residents.”

Beyond environmental concerns, Hengy and her fellow activists have expressed frustration with Fredericksburg’s city leaders’ lack of transparency and accountability.

“In August, we attended a city council meeting where they were supposed to vote on spending $200,000 on a feasibility study for the data center,” Hengy explained. “We showed up, but midway through the meeting, they said they didn’t need to vote anymore because they were just going to take the money from the Economic Development Authority instead.”

Despite assurances that this was just a study and that construction was years away, Hengy alleges that city officials soon after began quietly laying the infrastructure for the project. Additionally, she criticized the city for not disclosing the developer behind the project, though through independent research, activists believe it to be Stack Infrastructure—a company with ties to the city’s Economic Development Authority.

“The process has been fast-tracked, which is not their usual procedure,” Hengy said.

Panel Discusses Future of Data Centers in Fredericksburg

As community debate over the Technology Overlay District continues, a panel discussion on January 29 at the Dorothy Hart Community Center examined the potential impact of data centers in the region. Sponsored by Friends of the Rappahannock and other advocacy groups and covered by the Fredericksburg Free Press, the event brought together environmentalists, engineers, commercial developers, and city officials, including Fredericksburg Mayor Kerry Devine.

Key Takeaways from the Discussion:

• Economic Growth vs. Environmental Impact: Panelists acknowledged the growing demand for data centers due to AI and digital expansion. If approved, the proposed site at Celebrate Virginia South could generate up to $60 million in tax revenue annually. However, critics argue the increased energy consumption would undermine the city’s goal of being fossil fuel-free by 2035.
• Energy Demand and Sustainability: Experts noted that renewable energy alone cannot meet the power demands of large-scale data centers, meaning facilities will likely rely on natural gas. “The big question is: Where are we getting the power?” said Daren Shumate, an engineering consultant.
• Zoning and Development Concerns: While the proposed Technology Overlay District would allow data centers as “by-right” developments—eliminating the need for special-use permits or public hearings—no official project has been approved yet. Another potential data center site near the Hylton Track and Gateway Blvd has not been formally proposed to city staff.

The discussion highlighted ongoing concerns over transparency and environmental protections, though Devine argued that revenue from data centers could help the city meet its climate goals.

The following public hearing on the Technology Overlay District is scheduled for February 25, 2025, City Council meeting at 7:30 p.m. at City Hall and will be streamed online.