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Henrico to dedicate data center revenue to affordable housing fund

Nelson gives remakrs at a podium
Shaban Athuman
VPM News
Tyrone Nelson, member of the Henrico County Board of Supervisor and chairperson of the GRTC Board of Directors, speaks during the official opening of GRTC's new downtown transfer station on Monday in Richmond.

The county will contribute an estimated $60 million to its first housing trust.

The Henrico County Board of Supervisors has expanded its reach in the tech industry with the approved rezoning of a new data center campus located near East Williamsburg Road at the intersection of Technology Boulevard.

The board held a public hearing on May 14, as supervisors burrowed through every detail of the plan submitted by Hourigan, a construction and development firm based in Richmond.

Henrico is already home to around 16 data centers, including several clustered in the White Oak Technology Park, located a few miles from the recently approved development. From 2017 to 2024, Henrico’s data centers have contributed over $18 million to county funds through business property and real estate tax revenues.

Although the board’s decision was met with skepticism and hesitance from several residents, including representatives from an environmental group called Henrico Conservation Action Network (HCAN), Board Chairman Tyrone Nelson expressed to those in attendance to do something transformational, should the project be approved.

“There's a lot of revenue that will come in because of this case alone,” Nelson said. “We need to just dedicate this funding towards something that can really help people; help people who don't even know that we're even having this conversation.”

On May 16, Nelson along with County Manager John Vithoulkas announced that Henrico will establish its first Affordable Housing Trust Fund with money sourced solely from revenue generated by Henrico’s data centers.

The trust will “provide grants to nonprofit and for-profit entities to offset the costs of residential lots in subdivisions or other developments that meet program requirements,” according to a statement from the county.

“The county will be dedicating revenue from new economic development that is not built into our budget,“ Vithoulkas told reporters. “This is not debt. This is cash.”

The trust will start off with $60 million that will go towards housing affordability resources and programs administered by the Partnership for Housing Affordability, a Richmond-area nonprofit. Those funds will be available July 1, according to county officials.

The announcement answers some of the questions and concerns brought forth by residents during the county’s prolonged evaluation of the Hourigan development, as supervisors assessed the impact of the newly approved development.

Details on Henrico’s new data center campus

The development itself is made up of 12 parcels totaling 622 acres of undeveloped woodland, some wetlands and a small pond in an area between Interstates 64 and 295.

A map of white oak technology park
Courtesy of Henrico County
Timmons Group
The following is the area recently rezoned in Henrico's Varina District. The diagram shows the area near East Williamsburg Road at the intersection of Technology Boulevard. Several areas are marked to indicate where multiple buildings — whether they be data centers, office space or industrial centers — could be built.

Although the area’s approved rezoning is not limited to data centers, its proximity to the county's existing campus and fiber optic infrastructure make it an ideal location for the industry to expand.

This project is roughly half the size of Hanover County’s 1,200-acre data center plan; the company submitted several planning restrictions and conditions to Henrico that far exceed what was included in the Hanover proposal.

For instance, Hourigan agreed to preserve open space on the site so that no more than 65% of the proposed area would contain structures such as buildings or parking lots in addition to the site’s natural buffers and setbacks.

The development will also invest to the highest industry standards specific to data centers. As of Tuesday’s meeting, the company committed to using air cooling technically as opposed to liquid evaporation to address excessive utility consumption.

It is also committed to obtaining a silver design rating from the Leadership in Energy and Environmental Design (LEED) rating system — the world's most widely used green building rating system — and a high rating from American Society of Heating.

Overall, Hourigan agreed to around 30 proffers to address a range of concerns from environmental to traffic impacts, as well as questions generated by the public. Those conditions include and are not limited to:

  • Funding archaeological studies and historic markers to commemorate an American Civil War battlefield located on a portion of the development.
  • Establishing conservation areas to address stormwater and floodplain management, in addition to the installation of electric vehicle parking spaces and LED light fixtures. 
  • Restrictions on noise during construction and during operation measured down to the decibel. 
  • Restrictions to diesel generator use outside of emergency situations and required testing by the state’s Department of Environmental Quality.

Hourigan also agreed to work with Henrico and DEQ to measure and monitor the air quality in the developed area — and to make that data accessible to the public.
It is committed to contributing $5 million toward the installation of rooftop solar panels, tiles or shingles on homes within county lines. This effort is projected to help 200-250 homes, according to planning officials.

Ralph Emerson, Henrico’s director of planning, told the board that many of the proposed conditions were derived by researching what was done in areas with a high concentration of data centers such as the ones in Fairfax and Fauquier counties, but many were also derived by local residents like Aileen Rivera, who’ve continually asked the board to delay any action on the proposed development.

“We need to come up with standards and protections for us, your constituents,” Rivera told the board. “If you're going to err, I ask please err on the side of people… data centers are a liability to our community, to our economy and to our environment so why can’t we just wait?”

Why Virginians are vigilant about data centers

Virginia is home to the largest concentrations of data centers in the world, according to the state’s economic development partnership. The industry made up around 25% of Dominion Energy Virginia’s electricity sales in 2023, according to the company’s annual report; an increase of 21% compared to 2022.

PJM Interconnection, a regional transmission organization that oversees 13 states and Washington, D.C., claims Virginia’s peak energy consumption will double by the year 2040.

As companies in the commonwealth plan to make billion-dollar investments in places like Loudoun County and other parts of Northern Virginia to expand and take on more data center projects, residents are becoming more and more vigilant of what those investments may cost in the long term.

That’s why residents like John Montgomery urged Henrico supervisors to stop and consider the risks before accepting the project.

20240516_Henrico Data Center_Rendering.png
Courtesy of Henrico County
Timmons Group
A photo provided by Richmond-based developers Hourigan, shows what a potential building in Henrico County's newly rezoned technology park could appear.

County residents asked the board to delay any action on the project so that Joint Legislative Audit & Review Commission can complete a study commissioned by the Virginia General Assembly examining how the existing landscape of the commonwealth’s data centers impact natural resources. Afterward, the residents say, state legislators can examine that data and implement more efficient and environmentally considerate standards.

“Between what is being proposed here tonight, and what is already underway, we could find ourselves right on the heels where our neighbors to the northwest who are trying to unring the bell and fix the problems that we created for ourselves,” Montgomery said. “I would suggest, again, that the time is now to take it right and take it slow.”

The board ultimately sided with staff recommendations, who received residents' concerns and welcomed the opportunity to set a standard not just for Henrico, but the commonwealth as a whole.

“This is the opportunity for us to be able to do really transformative, important, game changing things,” Three Chopt District Supervisor Misty Whitehead said. “You all elected us, all five of us, thinking that there was going to be a new day in Henrico — so please trust us.”

Henrico Conservation Action Network is a VPM sponsor.

Lyndon German covers Henrico and Hanover counties for VPM News.
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