Fredericksburg City Council Unanimously Denies Data Center Rezoning After Midnight Hearing
The Fredericksburg City Council unanimously voted to deny a rezoning request and special use permit for a proposed 1 million sq ft data center project. The decision followed an extensive public hearing and aligned with the Planning Commission's previous recommendations, primarily because the site was outside the city's designated Technology Overlay District. This denial means the city will forgo an estimated $23.4 million in annual tax revenue from the project.
Fredericksburg City Council unanimously denied a rezoning request and special use permit for a proposed 1-million-square-foot data center. The votes, 7-0, came after a public hearing that extended past midnight on August 25. The project, proposed by 1500 Gateway LLC (an affiliate of Penzance), aimed to build two data center buildings on the Hylton tract along Interstate 95, a site projected to generate $23.4 million in annual taxes.
The denial followed previous recommendations against the project from the Planning Commission, which had twice voted 7-0 for denial. A key reason for the rejection was that the proposed site fell outside the city's designated Technology Overlay District (TOD), established in 2025. Council members, including Mackintosh, Crump, and Holmes, emphasized their commitment to the TOD process, stating it created public trust regarding data center locations.
Public opposition played a significant role, with 51 speakers and 49 letters submitted, many expressing concerns about noise, low-frequency sound, and the impact on residential areas like Great Oaks. Councilor Rowe stated that "The people of Fredericksburg have made their voice heard." Additionally, Councilor Finn cited "highly problematic" transmission routes, particularly near Hugh Mercer Elementary School, as a reason for deeming the project "nonviable."
Despite the applicant's revisions, including claims of zero water cooling and a project labor agreement, and the potential for substantial tax revenue and school funding, the council prioritized adhering to the established zoning framework and addressing community concerns. Mayor Devine indicated that development pressure on the Hylton tract remains, and the city's mapped data center location within the Celebrate Virginia South area, though power-constrained, is still the preferred path. The developer, Penzance, did not immediately announce its next steps.