Months of debate, a detailed study and sometimes heated feedback from the public left Prince George’s County officials probing the economic benefits, development challenges and regulatory complexities of data center developments. A task force report and set of policy recommendations recently equipped the county with a path forward. But policymakers and business leaders don’t yet know if that path will enable or prevent new development opportunities.
A proposal to build a data center on the Landover Mall site plunged Prince George’s County into an extensive study of acceptable development rules. Image courtesy of Prince George’s County Council.
Spurred by public opposition last year to a proposed data center development on the site of the former Landover Mall, the county executive and council instituted a six-month pause on data center development permits and created the Prince George’s County Data Center Task Force.
In late November, the task force released its findings and 14 policy recommendations. Those included:
- New zoning restrictions that would require minimum setbacks of data centers from residences, protect environmentally sensitive areas from data center development, and create an overlay zone to incentivize data center development on brownfields and other underperforming sites;
- A requirement that all data center projects go through a special exception process;
- A policy discouraging speculative data center developments and incentivizing planned developments;
- A set of environmental policies that include imposing a High-Energy Use Surcharge on data centers, incentives for data centers to exceed environmental standards, and monitoring of noise, vibration and air quality around data centers;
- New guidelines for attractive building exteriors and visual buffers; and
- Requests that data center developments maximize direct job creation and support educational opportunities and recreation facilities.
The task force studied other jurisdictions with more established data center sectors, including Northern Virginia, Frederick County, Atlanta and locations in Ohio. That study both revealed valuable lessons learned and enabled the task force to recommend some policies that have proven successful elsewhere, said Wala Blegay, a task force member and Prince George’s County Council Member At Large.
Prince George’s county officials studied how Northern Virginia, Atlanta and other jurisdictions govern data center developments in order to come up with their own proposed regulations.
County council members are now working to enact some of the task force’s recommendations, she said.
“We feel very strongly that the special exception process would resolve issues that we had with the Landover development and it would calm the community down,” Blegay said.
Northern Virginia jurisdictions, she added, have started to use the special exception process for some proposed data centers as development sites have moved closer to residential areas and raised more concerns.
“I think the data center industry is actually open to working with people and open to dealing with the community’s concerns because they are facing opposition almost everywhere,” Blegay said.
Stephen Powell, Chair of the Prince George’s County Leadership Committee of the NAIOIP Maryland-DC Chapter, agrees that data center developers often face big concerns and sharp opposition.
“Data centers have become a very controversial matter,” Powell said.
Powell applauded Prince George’s officials for “putting in the work and trying to create a good policy product around data centers… Now, I would welcome a process where developers are more involved and have an opportunity to discuss the legislation as it is drafted.”
Some task force recommendations need to be better defined, he said, and one — the special exception requirement — should be reconsidered.
“You are creating all these very specific policies and regulations for data center developments. If something fits within all of those regulatory boxes, why add a special exception process on top of that?” Powell said.
That added process could delay permit approvals by a year or more, he said. “It also takes away predictability and the biggest, most important thing for developers is predictability. If you have this significant process that has no guaranteed outcome, you’re doing to push developers elsewhere. They are going to go to jurisdictions where they know they can build.”
The recommendation to discourage speculative data center projects is also an obstacle to growing a local data center sector, he said. “If you want development, sometimes it has to be spec development.”
Prince George’s and other local jurisdictions need to settle regulatory debates around data centers very soon, according to Kelly Schulz, Chief Executive Officer of the Maryland Tech Council.
Data center developers “have money to spend right now,” Schulz said.
In addition to the data center complex being developed in Frederick County, developers are interested in projects in Prince George’s, Montgomery, Baltimore, Calvert, Charles and Washington counties and Baltimore City, she said.
Construction has begun on the first data center in a master-planned, 2,000-acre data center campus in Frederick County. Images courtesy of Rowan Digital Infrastructure.
The industry is willing to listen to community concerns and reach compromises with local jurisdictions in order to move projects forward, Schulz said. “But developers want to know what requirements they have to deal with in any jurisdiction and they want some comfort in knowing they won’t have to deal with political struggles or moratoriums.”
Considering that developers are eager to break ground and are weighing options in multiple states, those clear requirements need to be decided soon, she said. “Quite frankly, there’s no time to wait for another task force or another study… Honestly, if you are going to pass a bill saying that you want a moratorium on data centers for a year, that means you don’t want data centers ever.”
Last year, the Tech Council created a Data Center Alliance, comprised of subject matter experts and community leaders from across the state, to help advance the industry in Maryland. The alliance is currently working to educate policymakers on the state and local levels about the realities of the data center industry and the benefits it could deliver to Maryland.
Once completed, the data center campus development in Frederick County “will deliver $200 million in revenue every year to Frederick County and that’s just one project,” Schulz said.
An economic analysis (commissioned by the MD Tech Council and completed by Sage Policy Group) of the proposed Landover data center concluded that it could generate $1 billion in economic activity. The construction phase would funnel $2.5 million in taxes to the county and another $20 million to the state. Annual tax revenues during its operating phase would total $19.6 million to the county and $16.6 million to the state.
Prince George’s County officials recognize the potential benefits of data center developments, Blegay said. “We are facing a structural deficit of over $200 million and we have a lot of people who are being squeezed financially and they need some tax relief. So, we are not ignoring the options of data centers.”
Featured in this article: Maryland Tech Council, Prince George’s County Qualified Data Center Task Force, NAIOP DC|MD Chapter, Sage Policy Group