Chesapeake considering tax rate increase, zoning changes for future data center projects

Chesapeake, Virginia, is actively exploring new regulations and tax policies for future data center developments, nearly a year after the City Council rejected a contentious project. Following a February tour of data centers in Prince William County, city staff and council members are drafting policy changes, which include mandating conditional use permits for data centers in industrial-zoned and Fentress Airfield Overlay areas, although they recommend keeping them "by-right" in the Coastal Virginia Commerce Park megasite. Additionally, staff proposes increasing the equipment tax rate from $0.40 to $2.00 per $100 of assessed value, aiming to be competitive within Virginia. Chesapeake City Manager Chris Price highlighted these efforts as crucial for diversifying the city's economic portfolio beyond military and port dependencies, leveraging its fiber optic network and subsea cables. The previous, unapproved project, Etheridge Lakes Data Center, involved local developer Doug Fuller's proposal to rezone 22.6 acres for a 350,000-square-foot facility, which faced strong resident opposition due to health concerns, proximity to homes, environmental impacts, and strain on infrastructure. A data center committee, comprising residents, Planning Commission members, and representatives from Dominion Energy, the Chesapeake Alliance, and the South Side Network Authority, is reviewing extensive stakeholder input. This input covers concerns regarding water use, power supply, noise, public outreach, and development buffers. The new draft policy, which will incorporate these considerations, does not yet have a public hearing or vote date. Neighboring city Hampton is also considering similar zoning code updates to attract data center development.