City Council votes down 1500 Gateway data center project
The Fredericksburg City Council unanimously voted to deny a special use permit and zoning map amendment for the controversial 1500 Gateway data center project. This decision followed over four hours of public testimony and two previous denials by the city's planning commission. The developer, Penzance, had significantly revised the proposal to address concerns, including pledging no water usage for cooling and offering over $40 million in proffers.
The Fredericksburg City Council has unanimously rejected the 1500 Gateway data center project, voting 7-0 to deny both a special use permit and a zoning map amendment. The decision came after an extensive public hearing that lasted more than four hours, featuring testimony from both supporters and opponents of the development.
Developer Penzance, a Maryland-based firm, along with its affiliate 1500 Gateway, LLC., had made substantial modifications to the original proposal in an attempt to garner approval. These revisions included reducing the overall size of the campus, lowering building heights, and re-orienting generators to face Interstate 95. Crucially, the developer also pledged that the data center would operate without using any water for cooling and offered more than $40 million in voluntary contributions, known as proffers, to mitigate potential impacts of the development.
Despite these efforts, the project had twice previously received recommendations for denial from the city’s planning commission. During their deliberations, several councilors referenced the Technology Overlay District, established in February 2025, as a framework that limits additional data center development beyond its designated boundaries, influencing their vote against the 1500 Gateway proposal.