As data centers proliferate, conflict with local communities follows

ALEXANDRIA, VA. (AP) — The sprawling, windowless warehouses that hold rows of high-speed servers powering almost everything the world does on phones and computers are increasingly becoming fixtures of the American landscape, popping up in towns, cities and suburbs across the United States.

Demand for data centers ballooned in recent years due to the rapid growth of cloud computing and artificial intelligence, and urban and rural governments alike are competing for lucrative deals with big tech companies.

But as data centers begin to move into more densely populated areas, abutting homes and schools, parks and recreation centers, some residents are pushing back against the world’s most powerful corporations over concerns about the economic, social and environmental health of their communities.

In Northern Virginia, more than 300 data centers dot the rolling hills of the area’s westernmost counties and butt up against wooded bike trails winding through the suburbs. But one of the latest proposals in the area, Plaza 500, would see a 466,000-square-foot facility and adjacent electrical substation built a few hundred feet from townhomes, playgrounds and a community center.

The pitch from Starwood Capital Group, the private investment firm founded by billionaire Barry Sternlicht, to Fairfax County officials promised jobs and a significant property tax boost. But data center critics say the incentives aren't enough to counteract the consequences of building the facilities so close to homes.

Tyler Ray, a leader in the fight against the Virginia project, worries that more data centers in the area could compromise the already stressed power grid: Over 25% of all power produced in Virginia in 2023 went to data centers, a figure that could rise as high as 46% by 2030 if data center growth continues at its current pace. Some estimates also show a mid-sized data center commands the same water usage every day as 1,000 households, prompting concerns over the cost of water. Ray also frets over air quality, as the massive diesel generators that help power the data centers’ hardware send plumes of toxic pollutants into the atmosphere.

Ray and his neighbors tried to stop the development, but their efforts were largely unsuccessful. The Fairfax County Board of Supervisors in September said all newly proposed data centers must adhere to stricter zoning rules, but the Plaza 500 project was exempt.

“I don’t know how a general resident, even someone who has been engaging intently on an issue, has any chance to go up against the data center industry,” Ray said the night the supervisors voted.

For local governments, attracting data centers to their municipalities means a financial boon: Virginia Gov. Glenn Youngkin said in 2024 that Virginia’s current data centers brought in $1 billion in tax revenue.

For average-sized facilities, data centers offer a small number of direct jobs – often fewer than 100 positions. Google announced recently that its investment in nearby Loudoun County, which included two data centers, created around 150 direct jobs, a figure that data center opponents say isn’t worth the hassle. But data center advocates argue that the number of indirect jobs like construction, technology support and electrical work make the projects worthwhile. In that same announcement, Google said their investment spurred 2,730 indirect jobs.

Kathy Smith, the vice chair of the Fairfax County Board of Supervisors, voted in favor of the Plaza 500 proposal because, in her estimation, data center growth is inevitable in the region, and Fairfax County should reap the benefits.

“I have a responsibility to step back from what we do and look at the big picture,” Smith said. “Data centers are not going away.”

On the other side of the country, in Morrow County, Oregon, Amazon Web Services has built at least five data centers surrounding the 4,200-person town of Boardman, nestled among vast stretches of farmland flecked with mint patches and wind turbines, next to the Columbia river.

Last year, AWS paid roughly $34 million in property taxes and fees stipulated in the agreements after receiving a $66 million tax break. Those payments, in addition to $1.7 in charitable donations from the company in 2023, have been instrumental in updating infrastructure and bolstering services. These funds have gone toward a new ladder fire engine, a school resource officer and $5,000 grants for homebuyers so far totaling at least $2.8 million.

“This road right here? Wouldn’t happen if it wasn’t for AWS,” said Boardman Mayor Paul Keefer, riding in the passenger seat of Police Chief Rick Stokoe’s cruiser, pointing out the window at construction workers shifting dirt and laying pavement.

AWS has cultivated relationships with local officials including Keefer and Stokoe, who have both been in positions to vote on whether to authorize tax breaks with the company. Some former county commissioners and residents worry that those relationships are too cozy.

Kevin Miller, AWS’s vice president of global data centers, said in an interview with the Associated Press that “our interest is in being a model corporate citizen, to really be partners with those communities.”

Skepticism of the deals started years ago, when three formerly elected officials allegedly helped approve data center deals while also owning a stake in a company that contracted with AWS to provide fiber optic cables for the data centers. In June, they each paid $2,000 to settle an ethics complaint.

Those officials are no longer in office. But the latest data center deal struck between Morrow County officials and AWS, which gives the company an estimated $1 billion in tax breaks spread over the 15 years to build five new data centers, again raised eyebrows.

Two former Morrow County Commissioners, Jim Doherty and Melissa Lindsay, pushed unsuccessfully in 2022 for AWS to pay more in taxes in new data center negotiations.

“We didn’t want to blow it up. We didn’t want to run them off,” said Lindsay. “But there were better deals to be made.”

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