Why is Northern Va. the world’s data center capital?

Most people don’t give data centers a second thought — or even know what they are — until one affects their lives. In Northern Virginia, though, a lot of people do a lot of thinking about data centers.

“It is true Northern Virginia is the data center capital of the world, the largest market in the world, by three times,” said Rob Faktorow, vice chairman of CBRE, one of the world’s largest commercial real estate services and investment firms. “It encompasses almost 50% of the data centers in the United States.”

Faktorow said the biggest players in the data center sweepstakes are Loudoun County — Ashburn, in particular — and more recently, Prince William County.

A recent report predicts Northern Virginia will soon become the world’s first two-gigawatt data center market. That is 2 billion watts, or enough to perpetually power 1.5 million homes.

Yet not everyone is happy to have data centers multiplying in the region. Some neighbors complain of noise, while others oppose the locations of proposed centers, including near the Manassas Battlefield in Prince William County, or along bustling Virginia Route 7 in Loudoun County.

“When it’s in your neighborhood, and you’re concerned about what’s going on in the property next door, yeah — you pay closer attention,” said Faktorow. “And as the market’s grown, more people have been impacted, so more people are paying closer attention.”

What’s so great about Northern Va.?

Faktorow says there are several reasons companies choose to build data centers in Loudoun and Prince William counties.

“The connectivity is better here than any other place in the world,” said Faktorow — that’s the speed at which data centers can share their data.

“The speed at which that signal travels sometimes matters,” said Faktorow. For example: “How quickly your pages upload, how quick your gaming is, the information you might send to your stockbroker to place or sell an investment.”

Faktorow likens a company’s decision to choose to store its data in Loudoun and Prince William County to when Wall Street was built, in 1792.

“If you were a bank, trading stock on the floor, you literally had to go down with your papers, and make your exchange there,” said Faktorow. “This is a modern-day version of that — and the exchange here is digital.”

The money factor

Why do Loudoun and Prince William counties want data centers built there? Not surprisingly, money.

“There’s big tax revenue, without stress on any services,” said Faktorow. He added that data centers require far fewer employees to operate than other industries. “You’re not putting cars on the road with people in offices; you’re not stressing growth in schools; you’re not taxing your police and fire departments.”

In addition, counties offer incentives — Loudoun County’s include a 6% sales and use tax exemption on servers, generators, chillers and server-related equipment.

Some data centers, depending on design, require a lot of water to cool their servers, which can impact local water supplies, said Faktorow. Ultimately, in order to be approved by local governments, local leaders have to be convinced the proposed data centers won’t consume too much water.

“So, there’s a lot of secrecy about how much different water designs use.”

In Northern Virginia, “We don’t have drought; we have plenty of water,” said Faktorow. “There’s less of a concern here than in places in the west, like Phoenix and Santa Clara, California.”

Data centers also require a lot of electricity, Faktorow said.

“You’ll need to build new substations, with the amount of power that’s being used,” said Faktorow. “And what’s happened has been, the substations have been built on the land that’s owned by the development community.”

Faktorow said the developers in our area generally contribute the land and the money for building the substations — “Not 100% of the time, but that’s generally how it’s been working.”

Not in my neighborhood

With the continued demand for data centers, opponents in Prince William County have raised concerns about new data centers, including for Amazon, being built near established neighborhoods.

In neighboring Loudoun County, much of the land north of Dulles International Airport, which used to be farmland, “was set up 35 years ago as a noise zone for commercial use, but the residential market started getting closer and closer to the noise zone.”

Faktorow said since the land was zoned for commercial use, the existence of data centers is relatively benign: “What’s interesting is that you could have had big, giant warehouses with 18-wheelers on your roads, instead of the data centers.”

However, Faktorow acknowledges local governments need to work with developers and residents to mitigate concerns about noise and aesthetics.

“Data centers that were built early in the cycle, say 10 years ago, were big concrete boxes,” said Faktorow. “Today, what you see from the street is glass, and detailed architecture that allows it to look a little bit less like a big concrete box.”

Faktorow, who represented AOL when the tech pioneer leased its Dulles campus to Raytheon in 2009, said the opportunities and scrutiny surrounding the building of data centers isn’t new.

“If you think about it, it’s no different than when AT&T was stringing telephone poles,” said Faktorow, reflecting on why some home owners oppose the centers. “All of a sudden, in your beautiful, scenic vista in front of your home, a telephone pole was built.”

“We have a modern-day version of that — this is a necessity in communication.”

Neal Augenstein

Neal Augenstein has been a reporter at WTOP since 1997. Through the years, Neal has covered many of the crimes and trials that have gripped the region. Neal's been pleased to receive awards over the years for hard news, feature reporting, use of sound and sports.

Federal News Network Logo
Log in to your WTOP account for notifications and alerts customized for you.

Sign up