Virginia’s famed “Data Center Alley” presents a stark contrast to Lackawanna County in Pennsylvania. While both regions are involved in the burgeoning data center industry, their circumstances and readiness differ significantly.
Jerry Crinella, vice president of Jessup Borough Council, expressed concerns about Lackawanna’s capacity to benefit from data centers without the necessary infrastructure. “They had a lot of availability of land, openness. They already had infrastructures built. We’re not at that point, and we don’t have that availability of land,” Crinella remarked, highlighting the challenges his region faces compared to Virginia.
This week, the Greater Scranton Chamber of Commerce arranged a bus trip to Loudoun County, Virginia, known as Data Center Alley, to gain insights into the industry. Participants included members of Jessup and Archbald borough councils, chamber employees like Executive Director Bob Durkin, and representatives from Lackawanna County and local utilities.
In Lackawanna County alone, at least seven data center projects are in the pipeline, with additional proposals in Luzerne, Schuylkill, and Montour counties. However, some residents, particularly from Archbald and Covington and Clifton townships, express concerns about proximity to homes and potential environmental impacts.
The visit aimed to provide a deeper understanding of the data center industry, which supports technologies like Cloud Computing and Artificial Intelligence. David Tolson, President and CEO of DBT-DATA, hosted the group at the 1757 Golf Club, adjacent to the upcoming Powerhouse Data Center. Tolson, a Wayne County native, has shown interest in developing properties in Lackawanna County.
Caleb Kershner, from the Loudoun County Board of Supervisors, and Buddy Rizer, the county’s executive director for economic development, addressed the visitors. Kershner noted, “Data centers have become a dominant part, obviously, of our landscape and ultimately, our commercial tax bases.”
Virginia’s Data Center Evolution
The journey to Loudoun County revealed an evolving landscape, from farmland and Christmas tree stands to housing developments and shopping centers, ultimately leading to the imposing structures of Data Center Alley. For 14 years, Loudoun has seen a continuous influx of data centers, becoming home to the highest concentration worldwide, with approximately 200 in operation and 70 more in various planning stages, according to Kershner.
Since the county’s first data center in 2008, tax revenues have surged from $1 million to an estimated $875 million today, with projections reaching $1.1 billion by 2026. These funds have bolstered local services, including education and emergency response, enhancing the county’s infrastructure.
Comparing Virginia and Pennsylvania
- Virginia benefits from taxing the equipment inside data centers, a revenue stream unavailable to Pennsylvania.
- Lackawanna County’s 41 municipalities each have unique zoning laws, unlike Loudoun’s streamlined system with only seven incorporated towns.
- Geographically, Lackawanna spans 465 square miles, while Loudoun covers 521, yet their proximity to major cities and infrastructure differs vastly.
- Loudoun’s strategic location near Washington, D.C., and its tech-centric development have made it a hub for data centers and internet traffic.
Insights from Loudoun
Buddy Rizer, dubbed the “godfather of Data Center Alley,” shared the evolution of Loudoun’s data center landscape. From leftover buildings of the dot-com era to the current 49 million square feet of data center space, the county’s experience offers lessons for others considering similar developments. Rizer emphasized the importance of strategic planning and integration into the community, stating, “If you’re thinking about data centers, define your opportunity up front.”
While Loudoun’s tax revenue from data centers has significantly reduced residential taxes, the county has ceased actively pursuing new data center developments, focusing on maintaining balance and integration with existing infrastructure.
Challenges in Lackawanna
In Lackawanna County, developer David Tolson faces hurdles due to stringent zoning laws. “The conditional use approval process is the most restrictive I’ve seen in my 36-year career as a principal owner,” he noted. Despite the challenges, Lackawanna offers access to power, a crucial factor given the nationwide electricity shortage.
The group was unable to access a data center’s interior due to security protocols, but Tolson showed them a facility his company developed. Daniel Markey, Archbald’s Borough Manager, remarked on the value of firsthand experience in understanding the scale and impact of data centers, despite the differences between their regions.
