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.”

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.

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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The Henrico Board of Supervisors has extended the deadline for its vote to restrict data centers in the county.

In the interim, the board has asked for county staff to redraw the plan, making it more restrictive than initially planned.

Henrico has been a hot spot for data centers over the past few years. The county has been courting these massive tax-generating properties since 2017. Most large-scale data centers have gone into Varina’s White Oak Technology Park.

“This is a complex issue, this data center situation, it is,” said Varina Supervisor Tyrone Nelson, whose district includes the bulk of large-scale centers and huge amounts of land. “This tech park, when it was filled up in 1996, who would have thought that data centers would be such a controversial point across the country?”

With White Oak reaching capacity — somewhere between 80% to 90% of the land is spoken for — the board considered a plan on Thursday night to stop data centers from popping up around the county.

Unshackled data center growth has caused a lot of angst among people living in Northern Virginia. Henrico residents have worried about similar growth, plus other issues associated with data centers, such as excessive water and electricity use, or environmental contamination.

The initial plan being considered by the board of supervisors would have created a district around White Oak where data center developers could build freely. Companies eyeing a large-scale data center outside of that zone would have to get board approval.

As it stands, large tracts of Henrico are currently zoned to allow the construction of a data center by right. The special district would shrink that to the 3,000 or so acres in White Oak.

Instead, the board voted Thursday to adjust its plan and remove the White Oak “Special Focus Area” entirely. Doing so would mean that every data center project, anywhere in the county, would have to be approved by Supervisors.

“If we don’t support this then by-right development will continue to pop up,” Nelson said. “In the Varina District, outside of the tech park, all over. They’ll be close to your neighborhood and every other neighborhood if we don’t get control of it.”

That decision followed a three-hour joint public hearing between the board and the planning commission. They heard from more than a dozen residents and business owners.

Nearby residents said they were concerned about the possible environmental impacts from data centers. They also criticized the amount of energy they use. Henrico County’s report for the meeting said that data centers currently use 25% of Virginia’s energy. Nationally, those centers are expected to use 12% of the country’s energy by 2028.

Dominion Energy, the area’s electric utility, said in April that it wanted a new rate for big users such as data centers, while also proposing a 13.9% rate hike for individual users.

Local Sharon Klein said she worried not only about the cost to Virginians and Henrico residents, but also the fossil fuels often used to create the power used for data centers.

“It’s not about each individual data center. It’s about the cumulative effect degrading the air by whatever power source these and the rest of the data centers are using,” she said.

Varina resident Taylor Clements said she thought the concentration of data centers in Varina was a continuation of historical zoning policies that placed industrial uses near poorer, often Black communities.

“They don’t belong here, or in Charles City, or in Goochland, or in Hanover,” Clements said. “The land is not isolated. It is surrounded by majority Black, brown, white, working and impoverished communities.”

Three Chopt Supervisor Misty Roundtree said there was a disparity between the east and the west of the county.

“It’s not all nefarious,” Roundtree said. “I don’t think it’s all for nefarious reasons, but I think we have to recognize it because that’s the only way we can accept it, figure out what we need to adjust and move forward.”

The regulation was opposed by two developers who say they already spent hundreds of thousands of dollars developing data centers under the current rules.

Representatives from developers Vienna Finance and Centra said they had spent $300,000 and $700,000, respectively, developing data center projects in Varina. When they started, they expected that those projects would remain by right, under the current zoning rules.

Aaron Mullins, a representative of Centra, is a nine-year resident of Henrico and a former teacher with Henrico County Public Schools.

“Our project is sandwiched between a pharmaceutical manufacturing plant, vacant industrial land, an industrial bakery, high voltage transmission lines, Dominion power facilities and multiple landfills,” Mullins said.

He said the company was welcomed and encouraged through several meetings with Henrico’s planning staff. However, after the plan to restrict data centers was unveiled seven weeks ago, the company’s meetings were declined.

“This draft amendment as written would not allow us to proceed with the development we have spent the past six months working on,” Mullins said. “Our small local development team simply can’t afford to take on the additional time, money and risk that accompanies a project subject for a provisional use permit.”

Although White Oak houses Henrico’s largest data centers, there are almost 40 across the entire county. Many of those are smaller “accessory” data centers that co-locate with a business. Henrico County has its own accessory data center to handle its data storage and processing.

Accessory data centers would still be allowed under the rules presented Thursday night, so long as they are a property’s secondary use.

The new regulation also includes rules for certain aspects of data center projects like setbacks from other properties, lighting and building materials.

Henrico announced last year that it was using $60 million in new tax revenues from data centers to create an affordable housing trust fund. The program is designed to reduce the cost of between 100 and 150 new construction homes each year.

The first four such properties have sold to owners since the beginning of 2025.

Henrico looks to be pumping the brakes on the recent rise of large-scale data center development in certain parts of the county.

A special joint meeting of the Henrico Planning Commission and Board of Supervisors is scheduled for this afternoon, where both bodies are expected to consider the adoption of what’s dubbed the White Oak Technology Park Area Overlay District and Technology Boulevard Special Focus Area.

In addition to setting more specific requirements for data center design and construction, the proposed changes would most notably set new limits on where the typically massive developments can be built by right.

Specifically, the new rules would mark a 3,000-acre area encompassing mostly White Oak Technology Park as the only place in Henrico where data centers could be developed without requiring a provisional-use permit or public hearing.

As proposed, the changes would call for any data center proposals outside that overlay district to obtain a PUP, a process that requires input from the board and the public. Currently, data centers are allowed as a by-right use in industrial, office and business districts across the county, though eastern Henrico has become a hotbed for such projects.

Supervisor Tyrone Nelson, whose Varina District includes White Oak amd is already home to the largest concentration of existing data centers in Henrico, said the changes would allow more scrutiny of projects outside of the tech park that could impact nearby residential areas.

“Data centers are a growing industry, and we’re seeing a lot of applications and interest all over the county in these by-right areas,” Nelson said. “It doesn’t give the Board of Supervisors opportunity to have voice in the process, nor our residents. This gives us opportunity.”

Noting several projects that have been proposed in the eastern part of the county, Nelson added, “Ultimately, for me, I don’t want data centers all over Varina. There’s a lot of M-1 zoning in my district, and I don’t want Varina to turn into a data center capital. This is a way for us to have some say so on each project as it comes forward.”

The changes were put into motion in late March, when supervisors directed the planning department to research and prepare new zoning ordinance amendments focused on data centers.

Jean Moore, Henrico’s assistant planning director, said the changes are being sought in light of residents’ concerns amid a proliferation of data centers in other parts of the state. Northern Virginia in particular has become a hub for data centers and certain localities there, such as Loudoun County, have sought to rein in that growth.

“They can be intrusive if they’re not properly regulated. I think Henrico County has done a good job with that, and they’re appropriate in certain areas,” Moore said. “I think Rev. Nelson and the board hear the residents’ concerns and want to make sure that we allow for data centers, because they can be a good use, but in an appropriate location.”

Included in the changes are specific objectives and guidelines for data center development in the special focus area that would be added as an amendment to the county’s comprehensive plan. Those guidelines would allow further evaluation of potential impacts, Moore said.

The proposed zoning changes come as tax revenue from data center development has taken on added importance for Henrico. Last year, the county launched a $60 million housing trust fund that is to be fueled by economic development revenue generated from data centers specifically.

Asked if there is any concern that the new rules could discourage data center development in Henrico, Moore reiterated that the projects would still be allowable in areas across the county; they just would need to go through the PUP process.

“I think the legislation proposed allows reasonable opportunities for data centers where they’re appropriate,” she said.

Nelson said he’s aware of some developers who are opposed to the changes, but he said the heightened interest necessitates the additional regulation.

“I know there’s some developers out there who are crying foul or saying that we are being unfair, but there are several projects that keep on being inquired about,” he said. “When you start having five, six, seven different data center applications coming forth or people showing interest, it does make you look at what’s happening.”

One of those developers crying foul is David Wagner, managing partner of locally based Centra Logistics, which has proposed building a 1 million-square-foot data center campus on an eastern Henrico site that sits just outside the overlay district.

Wagner said his firm met with Henrico officials earlier this year to discuss buying the project site: around 200 acres behind the Fareva pharmaceutical facility off Darbytown Road.

Wagner said the Henrico Economic Development Authority was helping Fareva market the property as excess land suitable for industrial development, including data centers by right under the current zoning.

He said county officials gave Centra verbal support for a plan to build eight data center buildings, each 200,000 square feet.

“We sat down with the economic development team in January, presented our high-level plans for the site and they said they loved it,” Wagner said.

Centra put the property under contract in March, submitted its plan of development on April 28 and was set to be heard by the board in June. He said he only recently found out about the county’s proposed data center zoning changes and felt blindsided.

“After being recruited to the county to build a data center and getting multiple confirmations, to get the rug pulled out from under us felt really unfair,” Wagner said.

He said the changes, if approved today, would prevent Centra from moving forward with the project by right, as the company hasn’t yet had its plan of development approved and it therefore would not be grandfathered in.

Wagner acknowledged that Centra would still have the right to file a provisional use permit to keep the project going, but that he’s been told the process would take 9-12 months and is unlikely to pass. He said his small company doesn’t have the time or money to fight it or wait it out.

He said the three-year-old firm has committed $700,000 toward the project for a downpayment on the land and plan-of-development and engineering work.

“The biggest thing for us is there are no vested rights or grandfathering clause for those that are invested midstream,” Wagner said. “We’re the only outstanding POD outside of the overlay.”

He says he’s not opposed to the county reining in data center development, but that he feels it’s being rushed without consideration for unintended consequences, namely his project.

“I actually think the intent is good… there should be requirements for distance from residential or noise. What isn’t fair is the process.”

He’s particularly puzzled by the speed at which the county is pushing through the changes, noting that the proposed ordinance was posted publicly on May 1, two weeks before a deciding vote.

“When you go through rushed processes like this you have unintended consequences,” Wagner said.

Wagner said it also feels like the county is playing favorites in the way that it drew up the boundaries of the district. He said 90% of the undeveloped land with the overlay is owned by data center giant QTS and Facebook parent company Meta.

“It’s limiting data center development to those two companies,” he said.

Wagner said he plans to speak during the public comment period at today’s meeting, where he’s hopeful county officials will at least delay the vote long enough to consider his firm’s circumstance and potentially create an exception.

“We’re local, we tried to do things the right way and follow the right process and were given assurances from the county that we would be able to do this, and it doesn’t feel fair to take it away midstream,” he said.

Today’s board and commission meeting will be at 5 p.m. in the auditorium of Highland Springs High School.

BizSense reporter Jonathan Spiers contributed to this story.

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HENRICO COUNTY, Va. — Henrico County officials are reevaluating their strategy for regulating one of Virginia’s fastest-growing economic sectors: data centers, which are large warehouses that house servers, computer processing equipment, and data storage devices.

The Henrico Board of Supervisors voted Thursday night to delay making a decision on new regulations for data centers after more than three hours of public comment and board discussion.

“We don’t mind development but we want responsible development,” said one Henrico resident during the meeting.

“My concern is this process,” another resident said.

The proposal would require data center applicants outside of the existing White Oak Technology Park in Sandston to submit a special permit that includes a public hearing, studies, and approval from the board of supervisors.

“I’m very concerned with slowing down data centers… the question in my mind is what is the best way to do it,” said one board member.

“If we don’t support this then bi right development will continue and data centers will continue to pop in the Varina district outside the tech park and all over,” another board member said.

Virginia has the largest data center market in the world according to The Virginia Economic Development Partnership, with most facilities located in Northern Virginia. Henrico County already has 40 data centers, and other localities like Chesterfield County are looking to add their own.

A study ordered by Virginia lawmakers found data centers provide significant economic benefits like additional revenue and jobs. However, they also place heavy demands on the energy infrastructure, which may not be sustainable for the future.

Several businesses spoke in favor of data centers during the meeting, though they requested the board grandfather in projects already in the pipeline into the new zoning.

“We’re concerned with the zoning ordinance as written sets a dangerous precedent not just for this district and not just data center developers but for any business coming to Henrico,” one representative said.

Opponents expressed concerns about potential environmental impact, security risks, and the strain data centers could place on the county’s power supply. They asked the board to delay the vote to allow more time for information collection and public processing of such a change.

“Take your time in making these decisions. This is not new. It doesn’t matter how many times people say grandfathered and the county promised. The county has made mistakes,” one community member said.

CBS 6 is committed to sharing community voices on this important topic. Email your thoughts to the CBS 6 Newsroom.

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