December 2, 2022

Donalds Hobby

World Finance Reviews

County finance department: Data centers’ tax revenue would fall short of projections | News

Prince William County’s Finance Department is predicting that local tax revenue generated by a new data center corridor proposed near the Manassas National Battlefield Park will be substantially less than its proponents projected. 

Prince William County Deputy Finance Director Tim Leclerc, in a letter to county officials, estimated the proposed “PW Digital Gateway” would eventually generate about $400.5 million in local tax revenue annually under current tax rates —  not the $700 million the project’s applicants estimate.

Under Leclerc’s analysis, local tax revenue would also grow slowly, rising from about $9.8 million during its first year of operation, to $204 million in 10 years’ time, and then to about $336.8 million in year 15. 

But he said there are numerous variables. For instance, if the county increased its computer and peripheral tax from the current $1.50 per $100 in assessed valuation to $3.70, the local tax rate charged for other personal property, such as automobiles, annual tax revenue from the data center corridor could eventually reach $654.1 million. But he also said if the maximum build-out occurs, the finance department would have to add a  minimum of 11 staffers for appraisals, audits and inspections. 

Leclerc’s calculations cast a shadow on the sunny predictions of the PW Digital Gateway’s proponents, who are touting their plan as a way to generate significant new commercial tax revenues to pay for schools and public services — and to reduce residents’ real estate tax bills. During a public meeting about the county’s data center overlay district last week, some supporters of the PW Digital Gateway seemed to think that the project’s tax revenue would reach $700 million during the first year. 

Battlefield, other county agencies raise concerns

The comments from the finance office were among several submitted in the past month to be considered by county officials as they wrestle with whether to approve the new data center corridor. Prince William County’s planning staff solicited comments on the PW Digital Gateway comprehensive plan amendment from 22 agencies and received input from 16, including at least two that were unsolicited.

Of the respondents, at least half – including the Manassas National Battlefield Park, the county’s Watershed Management Branch and the Virginia Department of Forestry – expressed opposition to all or part of the PW Digital Gateway application.  Others, like those from the county’s departments of finance and transportation, questioned assertions made by the applicants, a coalition of landowners along Pageland Lane who would like to sell their collective 2,133 acres to data center developers. 

On the positive side, the Prince William Service Authority said it could add water and sewer lines to the area, though doing so would require more studies. The PWSA did note that a planned upgrade to the Heritage Hunt sewage pumping station did not include plans for this new data corridor. The Prince William Fire Marshal, meanwhile, said the development would not burden its operations. 

Among those voicing strong concerns were County Archeologist Justin Patton. He takes issue with the applicants’ argument that transmission power lines along Pageland Lane have degraded the area’s rural quality, paving the way for a data center corridor. Patton states that if the land is replanned for data centers, the effect would be much worse, as data centers present a “high potential to adversely affect cultural resources” of the rural landscape while impacting the views west from the battlefield.  

In a later letter, Patton, on behalf of the county Historical Commission, recommends splitting the parcel into south and north sections and keeping the southern portion as-is, or designating it for parks and open space. Data centers should be built only in the northern section and only after a survey of historical sites is done there. Also data centers should not be visible from the battlefield, Patton writes.

Following its strong initial response to the proposal, the Manassas National Battlefield Park sent a second letter Feb. 18 after the PW Digital Gateway applicants responded to the park’s initial opposition.

 Acting Park Superintendent Raquel Montez reaffirmed the battlefield’s opposition to the digital gateway, citing “its high potential to have adverse effects on the historic and natural resources within the park’s lands and surrounding areas.” She added: “The threats posed by this submission would do irreversible harm and negatively impact the park’s vast contributions to the community.” 

The applicants had replied that they would “make a priority” the creation of protected open space, restoration of resource areas, perimeter buffering of floodplains and more. But on Feb. 16, Forestland Conservation Coordinator Sarah Parmelee commented again, saying that making these things “a priority” was a squishy promise. She asked that the applicants guarantee how much acreage would be forested, the width of wooded buffers and the amount of land to be placed in easements. 

They county’s transportation department found fault with several parts of the proposal, but mainly with the widening of Pageland Lane to four lanes.

It said the county does not have the funds to widen roads that right-of-way would have to be purchased to widen the road, and that “it is unlikely that these improvements could be in place within the next 10 years.”