Board of Supervisors - Regular Meeting

All right, I'm going to call to order this meeting of the Montgomery County Board of Supervisors this Thursday, September 17th. This is a joint meeting with the Planning Commission.

And I would like to call to order the Planning Commission for this September 17th joint meeting with the Board of Supervisors.

All right, and we will start this meeting with the Pledge of Allegiance led by our County Administrator, Ms. Angie Hill. Please rise as you're able. We have one item on our agenda for this joint meeting tonight, and that's an information session and discussion regarding data center and land use policies. The Board of Supervisors several months ago asked for some discussion at the Planning Commission level regarding data centers because in our current land use it is not an available option and so this is kind of the first step in getting some joint education, having a broader discussion with all of you about what kind of direction that we want to take, what we want you guys to consider as you do your work. Before we start the presentation, Chair Foster, did you have anything to add? I'm in. All right. Thank you. Then we are ready to go with the presentation.

OK. Well, frequently, Chair Lamont steals my report, and so she kind of did my introduction. But I'll just say it again anyway. Before I turn the presentation over to the team from Hurt and Profit, I would like to provide some background. And just as Chair DeMott said, in December 2025, recognizing that the data centers are not a defined use in the county zoning ordinance, the Board of Supervisors approved a resolution directing planning staff and the Planning Commission to study data centers as a land use in Montgomery County. The board asked that this work proceed through the planning commission process and resulted in recommended amendments to the county zoning ordinance. Following that action, board members and staff attended several informational sessions that additional direction was needed from the Board of Supervisors and then the Board chose to pause the detailed work until we could have this joint meeting this evening. And really the main purpose of having the joint meeting is to establish a common foundation of information regarding data centers. We hope that we can learn, ask questions, engage in discussion, and provide some additional guidance to staff regarding the next steps in the process. And no decisions will be made this evening. At this time, I'd like to turn this over to our team from Hurt and Profit.

I'll try to speak loudly. Sometimes my wife says I mumble. So if I start to mumble with somebody, raise their hand. I'll know what you mean. Thank you for having us here tonight. I'm Tim Reynolds. I'm vice president of business development at Pert and Profit. I got involved in the data center discussion in my local county about two years ago. We had our very first project come to Pennsylvania County. And honestly, I didn't really know what a data center was.

So I jumped in and started to educate myself.

I took some field trips. That project ultimately failed, and maybe rightly so.

But the process worked.

We went through a very arduous planning process. It went to planning commission. It went to the board of supervisors. It was pulled from the agenda, devised. It took about nine months before it was ultimately killed. People got very upset about it throughout the process. So I was educated through that. I've since been involved in several other projects in different counties, another one in Pennsylvania County, another one in Campbell County, two in Campbell County, and then a potential one over in Amherst County. So I want to be pretty informal. So if I say something that you have a question about, raise your hand. Chris, did you say an hour and 22 minutes? Is that what I have? No. 22 minutes. All right, okay. That'll save some time. Fair enough?

Yeah, good by me.

OK. So the discussion topics we'll try to hit on tonight would be the digital zoom. Why? That's the why. What is a data center? More of the why. Touch on economic impacts, utility impacts, the environmental issues that come up, land use, and then zoning considerations. We'll try to hit on all those a little bit as we go through the presentation. One of the things I like to impress upon people is that many times all data centers get lumped together. Data center bad or data center good. And they are so vastly different. There are many different kinds and different sizes. And so to lump them all together is unfair. And I fear that you could miss an opportunity.

them all together.

So the technical facts, what do they require and how do the designs differ? A regulatory framework, let's think about what you guys can control on a local level versus what is controlled on a state level and in a utility level. And then, you know, the policy choices, what fits with Montgomery County's vision? Maybe it's data center man, I don't know. But you can look at the land use and the priorities as we go through this. What's driving data centers? I think probably all of you already know, but it's the digital boom and cloud services. I think that it was a mistake to name it the cloud because the cloud gives this heavenly vision of angels and hearts and this beautiful place, right? But they should have called it big, ugly buildings with stuff in it. because that's what it really is. The cloud is just somebody else's computer, and that computer's gotta live somewhere, and it lives in a data center. And we just, the consumers just have this need for more and more data, and you see it, and maybe not even realize it, I didn't, in everyday life. The average home has 16 connected devices in it now.

A lot have more.

We have 16 in my house. It's just me and my wife. One of my nieces, my niece and her husband are millennials with young children.

They have 50.

Vacuum cleaners, refrigerators, doorbell cameras, tablets, phones. So it's just a consumer-driven demand. And of course, AI plays into that as well. And you just need a lot of infrastructure and a lot of electricity to drive it. There's some big numbers at the bottom that I think are fun to see. Every minute on the internet, 4.4 million gigabytes of data every minute. Every minute, 188 million emails are sent. to 5 billion videos on YouTube every day. 695,000 hours of Netflix every day. Another thing I've thought about is that, you know, cell phones. Many of us remember flip phones. When we finally got this, or we could take a picture, there were less than one megapixel images. And now the new iPhones are like 25 megapixels. So that every picture now, takes 25 more times storage than they did when we first started to use cameras on phones. And everybody puts them out there. So talking about the velocity of the digital boom in Virginia. This map came from the JLARC study, which is a very good resource. I would encourage you to go look at that and read it. It's getting a little bit dated. It was commissioned by the joint legislature, so it should be impartial. This kind of gives you a glimpse of how data center projects started in Northern Virginia. It started with AOL in the 90s. Remember the CDs that you could pick up in the foyer? I remember when I was here in Blacksburg as a student. You know, at Kroger, you'd go in the foyer, and there was free CDs at AOL. So that was the driving force in Northern Virginia that really started the moving of data centers. And you can see how now it's creeping down 95 corridor there towards Richmond. But now it's starting to move towards Southwest Virginia. And it's pretty much just following where it can find power. If the land doesn't have, yes, sir?

Your JLARC map is incorrect. There is a data center in Montgomery County.

Yeah, I'm aware of that. So you take that up with JLARC. I think, is it more of like an enterprise type data center?

I know that Liberty University has a data center.

I don't know whether this was commercial data centers or what they based it on. But the one that I'm most familiar with is the one in Mecklenburg County that county where I'm from. It's just in the planning stages. But Mecklenburg County has been there 20 years. It's a Microsoft facility. I think it has seven campuses now. And I think it's most like, it's the best example of what happens in a rural county when a data center comes. So if you want more information on that, I'd be happy to share what I know about it. But I think it's a good example of how data centers operate in rural areas. So what's in a data center? I've already said the clouds to someone else's computer, but it's just servers and CPUs and GPUs that are doing things like cloud storage. They're doing AI. It's doing your cloud-based software. You know, you can't buy a CD and load Microsoft Office anymore. Pretty smart business decision, right? Because they got everybody for a monthly fee now. But I remember when we first got AutoCAD at my little company, it came with CDs. And, boy, we put those things in a fireproof case, and that doesn't happen anymore. It's all in the cloud. Obviously, it has power and batteries to kind of uninterrupted power supplies. If there's blips, the batteries come in and hold the data going until the generation can fire up. And then you hear a lot about cooling, and there's different ways to cool data centers, but there's evaporative cooling, there's closed-loop cooling. We're working on immersion-type cooling. The densities are getting so hot that, honestly, you can't cool it anymore with some of them. You can't cool them with water and just evaporative-type cooling. And then you've got to have fiber networks to connect it all together. So yeah, I got way ahead of myself. Not all data centers are the same. Do you have enterprise data centers? I think what is probably here in Montgomery County where a university may have an insurance company, a hospital, many times they want those off-site for security reasons, where they wouldn't be affected by any kind of cataclysmic event wherever they need the data. And then there are co-location facilities where a company like a stack infrastructure or a tract will go in and develop the property. And they'll subdivide it out. And again, smaller to mid-sized companies can leave space in it to put their servers in and have their own data center. So I think of insurance companies and hospitals when I think of that. Maybe large construction companies. My company, we have a data center that we use in Charlotte. Interestingly, we now use as much data in one year as we used to use in 10 years. people. And then what we all hear about, the data center bad is the hyperscalers. And that's about I think there's 12 or 18 companies that make up 80% of the hyperscalers. You know the names. Facebook, Amazon, Google, Anthropic. It's either 12 or 18 of them that make up the biggest majority. But that's where you really 300 watts of power on up to a gigawatt pound. JLARC has some really good numbers about economic impact and they speak for themselves. We hear a lot about economic impact with They decided that it was supporting 74,000 jobs, 9.1 billion dollars in GDP contribution, and five and a half billion dollars in labor income. Something like 30% of our construction labor in the state of Virginia is now dedicated to data center construction. If we were to halt the data center construction, it would be a massive We can talk about capital investments and how it benefits the locality.

It benefits it through the tax base from not only the real estate, but also the equipment inside of it.

These things can get into the multiple billions of dollars very quickly. And so you can imagine that that generates a massive amount Microsoft facility there occupies 1% of the land in Mecklenburg County, a little less than 600 acres. It accounts for something like 45% of their tax revenue. And then we talked about construction versus permanent operating equipment. The one in Mecklenburg County has been under construction for 20 years. I mean, there have been construction crews there for Couple of things that don't get mentioned a lot is that they may not bring the kind of jobs that an OEM automotive manufacturing facility would necessarily bring. They bring a lot of indirect jobs. The latest numbers are that data centers for every one job or every one badge employee create six indirect jobs. landscapers, restaurants, hotels, all types of services, HVAC services that serve the data center. And then from a revenue perspective, there's the capital advantage of the refresh rate on the GPUs and the CPUs. Because those billions of dollars in computer equipment in that building are just like your phones. They go obsolete. And so they're constantly updating them. The investment that the tax rate is based on, the taxable income comes in from, stays fairly steady, unlike if you were to have a company to buy a million-dollar CNC machine. That thing may last 20 or 30 years, but it would depreciate in a few years to almost nothing, and then the revenue would slow down very quickly on it. got Larry Jackson with me today.

I'm going to pretend that I know a little bit about utility, but Larry was with AP for 47 years. There's a lot about it.

So if you have utility questions, Larry's here. If I say something wrong, he'll walk up and smack me. So they are a large concentrated load, and according can have a large load user that runs at whatever 300 megawatts 24 hours a day 365 days a year that's a really good customer for the utilities because it doesn't spike right our residential use goes up in the morning when we get ready to go to work and then we get home in the evenings it spikes again we turn down the AC or we turn up the heat so they're really good constant loads for the utilities And it lets them spread the fixed cost over a really big area on a really big boat. They do require new transmission, new set stations, and in some cases, new generation. And that's what we hear a lot of friction over is who's gonna pay for that. And then we have the new tariffs that have been put into place. And Larry, we were talking about them coming down here I'll answer any questions you have as best I can. But it's a very complicated system when we start talking about utility rates and how they get set. I just know they're not set arbitrarily. And it's a very arduous process to change them. Did I miss anything? I don't think so. I will say that I don't know a lot about electric rates. So I looked at the things that I could see. I took the top 10 states that have the most data centers in them, Virginia being number one. I don't have that list in this presentation. Then I took the 50 states and I ranked them from 1 to 50 in electric power rates. And the 10 data center states were sprinkled all throughout. Virginia was 18th. So right in the middle. California and New York. where the other two in the top 10, that were like three and five. But I mean, I think most of us can figure out why California, they love to regulate everything. I'm gonna do it on top, Chris. You have two more minutes. So collaborative cooling was closed loop cooling. You need to know the difference. If a company comes to town and it may be something that you think about putting into your requirements, your zoning, if you come up with a zoning plan, district that would allow data centers. That's a question that you want to ask. JLARC has some good information about data centers. I will say that almost none of the new data centers are using evaporative cooling. They just can't cool it. And they found ways to do it more efficiently.

They pay for that water.

So they're always looking for better, cheaper ways to do it. A closed-loop system, QTS, one of the major data center builders in the country, they fill it up one time with a half a million gallons of water, and they say over the course of the year, that data center will use no more than five holes. It's just like how many people, when was the last time anybody in here put antifreeze in their car? Has anybody put it in the last five years? It's the same principle, right? You fill it up one time, it recirculates, it recirculates, and you don't fill it back up unless you have a leak. Backup generators are a concern that many people have. I would just say they're strictly regulated. DEQ, the permanent limit, set how many hours they can run a year. Data centers are looking for 99.9% reliability when they connect to the utility. And most of the generators run

between 30 and 100 hours.

I talked about the water. I don't know of any data centers that use groundwater in Virginia. I can't speak to Arizona, Utah, Texas. I don't know about those. But most of them use public water, that surface water, which is heavily regulated by the state. And then stormwater, the grading, the visual effects, all of that is stuff that you can address in your planning as you go forward. You need to think about that now before someone comes looking. Is the site appropriate for industrial use? What setbacks do you want? I saw a development in Kentucky recently where they required them to be 1,000 feet from the nearest residence, not the property. I know there are data centers that have problems with noise. Crypto mining facilities are notoriously loud. One that we are hearing about in Northern Virginia, and the name escapes me, it starts with an A, that they're having problems with. It has on-site generation. It's got area derivative turbines running. That's what's generating most of the noise. From that particular issue, I think most of the problems with noise have been not a noise problem, but a land use problem. Because Loudoun County, it got away from them. AOL came. It was an office use, right? And so data centers were by right uses in office or whatever, or office complexes would be. And so they were allowed to develop in these areas where they probably should have never been allowed to. And they wound up right up against the property line, right up beside town halls. So is that a noise issue, or is that a land planning issue? Transportation can be an issue because of the incredibly intense construction process. Once they start, it is the most intense construction you have ever seen, lots of traffic. But when it's done, it generates a lot of revenue, and it doesn't have a lot of traffic, like something like a distribution center might do. Figure out whether this is one building or a campus. I'm told that Montgomery County doesn't have like mega sites, but most likely Montgomery County would be faced with a smaller enterprise type, one or two buildings, 30 to maybe 100 acres. The one in Pennsylvania County, for your reference, is 3,600 acres. and could be as much as 10 million square feet. But it'll take 20 years to build it. And then I think you need to decide as a community whether you want to deter data center development or encourage data center development. And I think you can do that through whether or not you do very restrictive by-right uses in some zoning district. So how do you regulate this stuff? Comprehensive plan, zoning, by right versus conditional use and setbacks. What I was getting at is, if you want to encourage this in some district in developing a very strict set of development standards,

know what they need to do up front. That's all they want.

They want certainty. If you want to discourage it, maybe make it a special use permit where you can kind of change the rules as you go. But that's not as favorable from the development side.

Twice forward on your slides.

What am I talking about this from?

Go one more. Oh, there you go.

Four left. Back up one.

There you go. Four was just there.

Four. You get my point there, and I'll answer the question of the conditional special use, which way you go. What I see mostly across the state now is people are going to conditional use homes. They're not by right. Because they want to be forced to agree. They want to return to home. In Pennsylvania County, we made a by right in a special zoning district that only applied to what we call a mega site. That's the only place where they are by right. hybrid approaches, combine the map districts and specific use standards in these overlay districts. I've seen that done a couple of times. I think that just depends on what direction the county decides it wants to go. So what could help you evaluate a proposal? Obviously, what Figure out what the electric load they want up front. How many generators and under what permits or operating limits they're going to have with their generators.

Is it a real project or prospective land or bank proposal? That's important.

What I've heard from state level economic development people is the real question to ask is how many megawatts do you have operating? We'll come in and tell you they have X megawatts planned. They've done this. They've done that. But the real measure of whether they know what they're doing and whether they're real and serious is how many megawatts that you have operating. That's how you measure these things. Not really in square footage because the companies keep changing. Measure them in megawatts of electricity. What are the tax terms and permanent employment commitments? I don't think you guys probably have a data center tax rate. That's one thing that a lot of people are doing in Pennsylvania County, voted off a specific data center tax rate. And then setbacks, noise limits, screening, then we go back to land use planning and how you protect residents.

And then future expansions.

How'd I do? 5.2 minutes? That's pretty good. Questions? Larry's here. He knows more than me.

Questions? Anybody?

Yeah, let's talk about the power part of this, because what we keep hearing over and over is, you know, if you have a data center, it's going to take all this power, it's going to raise our rates. And Virginia imports a lot of its power. So what have you found in the data centers that you've been associated with? Is that a true thing that happens? Are rates raised around the communities where, you know, Mecklenburg County, Pennsylvania County, what have you found?

You want to take that one? I can do it, but you would do it much more eloquently than me.

Whether you have a data center in Montgomery County or you have a data center in Wythe County, you're still going to be paying the same rates from AEP that you're paying out. It's a postage stamp rate. It's set for the entire state. What the General Assembly did this year was to make sure that if the data center comes in and you build out all this infrastructure for your data center, the data center has to stay there until all that infrastructure is paid off. And we've got a good example in Botetourt County with Google, because it was just revealed what the project's going to be to serve that data center and the fact that Google is going to pay through their rates for all the improvements. So to say that data centers are going to increase your rates You're not going to want to hear this, but your electric rates are going to go up, whether there's a data center or not. The transformers cost more, insurance costs more, gasoline costs more, the trucks cost more. But data centers will have the opposite effect. They would put downward pressure on rates as opposed to the other things that are putting upward pressure on rates. So your rates are going up, but it won't be because of data centers.

Can you talk a little bit about the Mecklenburg facility as far as noise? That's another thing we keep hearing, like, about the noise, and that's why it's so important, you know, when you're looking at things about setbacks and all that, where you're going to put it. Tell me about the noise. What do you really hear?

So, I'll tell you that the current administrator, Alex Gottschall, tells me he's never had a single noise complaint from the data center operation. A few with construction. So that's the first thing I'll say. It's a high-security facility. You can't get inside of it. So what I did was, there are roads all the way around, and in many places, the land comes right up to the road. So I went all the way around and stopped, got out of the car. I had my wife with me, and we just sat and listened. We walked up to the fence.

I was hoping they weren't going to arrest me. We walked up to the fence.

Most places, I couldn't hear anything. A few places, I heard something that I would equate to a residential air conditioning unit. It's on Route 58. It's hard to get a decibel reading. It's not impacted by Route 58. I was reading 5055, which is almost ambient, almost anywhere you go. So I did not hear anything. an obnoxious noise from that. I have also toured, stacked multiple businesses in Northern Virginia. I went at night, and we were not escorted by the developers or the owners because we knew they would take us to the best places. So we went to the places that had been in need. We drove into the subdivisions and into the cul-de-sacs. I had my board chair with me and my head of economic development We got out of the car at, I think, four or five different spots. And it was a hot summer night, so that air conditioning had to be running. They had to be cool in the facilities. And I could hear the peeper frogs. I could hear the dogs barking. I could hear the highway that was out in front of it. I did not find it obnoxious. I won't say that I couldn't hear anything. The peeper frogs and the dogs were louder than what I heard coming from the data centers. And I was probably less than 100 yards from the walls. I've been on the roof of stack centers in Manassas, walked between the units. You could have a conversation up there. And in the parking lot, it just feels like you're in an office.

I'm not saying they're not loud data centers.

I know they are. I know people are not making it all up. I think the majority of them. not making that noise that we hear or see on social media. That's my experience.

And, of course, tell us about the water. You made the point that you get it from public water sources. That's usually, you know, how that all works. Because a lot of people are very confused about groundwater and, you know, how that would all work. So can you elaborate a little bit about you had these in rural areas. So where did the water come from? So Mecklenburg comes from Kerr Reservoir.

They ask for 2 million gallons a day. That is their max. That's what they ask for. So when you hear that number and people are trying to shock you, you will hear their max ask.

Google. That's their max ask.

So that's for a hot summer day. And so Microsoft asked for 2 million gallons a day. Their sustainability report came out a few months ago. You can look it up online. They've got all of their water and power uses and all of their U.S.-based operations. And the Mecklenburg Center used 266,000 gallons a day on average. I think that was for 2015. I'm an engineer, so I look at everything from an engineering perspective. I deal with regulatory agencies every day for my whole entire life, for 40 years. And so we have a system in place of regulatory budgets for all of our watersheds that DEQ strictly manages. And so they take every watershed, whether it be the New River or the James River or the Dan River, and they start upstream, and every withdrawal is permanent. is based on a budget for that watershed. And it's meant to ensure that everybody downstream still has water. And so the notion that anybody can come in and just take as much water as they want just because they need to cool something is not true. So every utility, whether it be, what's the utility here, Jess, that provides water? They have withdrawal permits and they've already got a permit to withdraw some amount of water. And if I'm Google and I come in here and I say, hey, Angie, I want 20 million gallons of water. And she calls up the water authority and they say they can have 500,000 gallons. That's it. That's it. I mean, they can't have more. And so that's my thoughts on that. I just think we have regulatory guardrails in place to ensure that we don't destroy our natural resources. And in some places, I view water as a natural resource that we should use. Some places don't have as much water. Some places have a lot of water. And I'll give one more example, and I might be going out on a limb. But I grew up in a small town, Hart, Virginia. My mom and dad were mule workers. They worked at Klotman Mules my entire life. And they died cloth for Burlington. Klotman Mules withdrew somewhere between 12 and 17 million gallons of water a day for 50 years out of the Warnock River downstream of Smith Mountain Lake and Peaceville Lake. I played in that river. I fished in that river my whole life. I walked out on the pipes where they were letting the untreated sewage out in the river. We didn't know any better. We didn't care. But my point is, nothing bad happened. I mean, we didn't dry up the river. We didn't kill fish. Nobody's wells went dry. And in all honesty, 12 million gallons out of a river that's flowing nearly 500 million gallons a day in a drought is not significant.

Is that helpful? Oh, yeah. And just a comment, because I don't want to hog all the time. But what you presented tonight, I think is excellent, because it really shows the point of what I think our board and the Planning Commission really wants to get a hold of is, you know, how are we going to deal with something if it would happen? And so your information here, I think, has been totally beneficial.

I think you need to take that and then look at it from a local lens, right? What fits from Montgomery County? What do we want? What do we not want? What can we live with? Are the costs worth the benefits? That's a local decision, not a state decision.

I have a question on Supervisor Biggs' question about water. So the Mecklenburg facility is permitted to pull 2 million gallons a day. Is that an evaporative cooling system or a closed loop? I think it's a combination.

It's been around for 20 years. There could be different systems there.

So do you think the technology has shifted to more of a closed-loop system so the water impacts are minimized?

Tim, you didn't go over that one thing that was on the slide about, remember that data fact that JLARC had the total of, it was a huge billion number for withdrawal, but then it broke down to, on a daily basis, that for every data center in the state of Virginia, it was actually an average of six, yeah. Can you go over what that means?

every data center in the state. You just heard what I said about a textile plant. Six million total of every data center. They also found that 80% of data centers use no more water than a typical office building.

It's just not practical with the concentration of energy in the space. It's no longer practical to cool them with water. It would boil the water instantly, so they're using other materials to cool them with

So how much more? Virginia's number one in data centers. Right now.

Texas will be soon.

How much more can we take, so to speak?

You know, I think that number gets skewed because of the so many enterprise systems in Northern Virginia that aren't. much more than the office building. You hear that and you immediately think we have 600 hyperscalers, but we don't, right? So I think that number is skewed. I think it would be better to look at it on a megawatt basis, and I don't know what that number is. I think how many more can we take is a question That's best answered by the utility providers, specifically the electrical utility providers, because they're the ones tasked with managing their systems, managing their generation. AEP tells us they have excess capacity in Southwest Virginia, because it's on why they have excess capacity.

AEP has a lot of large coal plants. They have access to the coal plants in the Midwest and all the wind in the Midwest. and a very robust transmission system that goes right through southwest Virginia. By the way, I no longer speak for AAP. I gave that up 20 months ago, but that's just the truth. Now, that could change. Every data center that comes in, the equation changes. So as new data centers come in, new generation will be needed, and it's up to the utility to provide the generation that its customers need. And AEP is not going to say it will serve a data center.

It's up to the local regional water authority, whoever is supplying the water, to decide whether or not they have the water. So that's handled on a local level.

And what's the lifespan of one?

Of a data center?

Yes.

The leases are 20 to 30 years.

I don't think we know yet because we haven't gotten to the end of the life of one.

Like I said, Microsoft is still building in 20 years.

Is that what they usually do? Keep building and do modifications or change orders to increase them?

If they have power and land.

So instead of going to a new site, they just keep adding on to the ones they have? So you don't know how long they last?

Think about the way it's changed. Back in, let's just use the year 2000, because most of us were around then. The data center at that point was in a closet. We'd go in that closet. that was the data closet and then it became the data room and then it became the data floor and became the data building and now it's the the mega center so things continually change and when it was the data center that was in the closet it may have used 10 kilowatts and now you've got two megawatts in that closet, in that one rack. Tim talked about the change out every three, five, seven years of equipment. Equipment gets more and more concentrated, and that's how they update the data centers now.

I was driving through Raleigh a couple Sundays ago, and I was on that Interstate 40. It was five lanes of traffic on both roads. And I said to my wife, I said, I think this is kind of like a data center, right? What would Raleigh be like today if we had refused to expand Interstate 40 and we said, you know, this is agricultural land. We can't grow. We can't add lanes here. Our data system, data, I did a presentation. Y'all only gave me 22 minutes.

I did delete it.

But data is a utility. It is no different than power, than transportation, than the rail system was when we developed it. It is a utility. It's no different than a utility. And if we can't expand it and keep growing it, what would Raleigh look like if we had a two-lane 40 going through? It wouldn't be a good three-lane. And I just had that mental image of all those cars going. I'm like, this is kind of like data, right? We have to have a bigger pipe.

We have to constantly have a bigger pipe.

Would it be fair to say that the life of a data center isn't tied to the physical structure, but more what's actually inside of it? So the life could, as long as they're repurposing or refreshing their equipment, the building life doesn't really matter as much as what's inside of it.

I think that's fair. Can you talk a little bit to another thing that we hear a lot is people are concerned about air pollution. And I noticed that one of the slides talked about the air in Virginia DEQ, and a lot of people don't have a lot of faith in Virginia DEQ. So can you address, as far as you know, any kind of air problems that have occurred in the centers that you're familiar with?

I'd have to reference DEQ, and I don't think you'd believe me. What DEQ did is your report said that Loudoun County is one of the healthiest counties in the state, if not the country.

And it has more data centers than anywhere else in the country.

So that's one thing. for things like tier four exhaust on the generation, using natural gas generation. The one that I visited with Stack Infrastructure, they let me, they opened the generator. It's been in operation for four years, and the generator had 50 hours on it. So, I mean, personally, I don't see it as a huge pollution problem. I don't think many people would ask about the pollution if you got a Walmart distribution center to locate out on 81. But when you have 300 to 500 tractor trailers coming a day, that's a pollution issue, too. I think you've got to trust the regulatory environment. And they set strict permit limits on them. And they don't want to run those generators. Those things hold 8,000 gallons of fuel or something. They don't want to run them. They test them once a month, and they turn them on in catastrophic events. They want AEP and Dominion to be up and running 99.9% of the time. They tell their customers that they have to have five nights, 99.999% uptime, which ends up equating to like 100 minutes. No, three minutes a year. It's getting late. Not much.

of needing data to host, to hold store stuff, whatever. But now we're entering into this era of speculative, to some extent, build out of data center capacity. And I've seen or read some chatter as it relates to what happens if this bubble kind of builds and eventually falls in on itself if there's not all this capacity needed or AI doesn't do everything anyhow. The reason I bring that up is we say 20, 30, 50 years in terms of useful life of the shell, the outside, but if there's nothing in it generating taxes for the localities three, five, 10 years down the road after they've kind of made these sacrifices, proffers to bring in Are there things that we can do on the front end to maybe create a floor as it relates to tax generation, revenue generation, you know, for the locality of these places coming in?

I haven't seen that done. I think Larry mentioned what the state has done on the electrical side. Make sure that they're there long enough to pay for the returns. Some people are putting in plans where they have to, the restoration plans. It's like a solar, you know, a solar site has to put up a bond such that if it ever goes out of business or the panels are no longer efficient enough, they have to get rid of them and restore it. I've seen even down to removing the building and the underground utilities.

Because one idea that I had heard floated was a bond for some amount of future tax revenues that if they fail to materialize, then that bond would cover that shortfall or any lost revenue to the locality.

The electrical contracts that are being required for these larger, right now with Appalachian Power, it's anything over 100 megawatts. You have to sign a contract, and you have to pay 80% of what you contracted for for 10 to 14 years. You get a four-year buildup if you want to. Nobody's going to want to pay that, and I haven't done the math, but a billion dollars a year if there's nothing in that building. The second thing on the decommissioning, you all get to control that, what the decommissioning looks like. If there's nothing happening inside, do you get the building? Do you get all the generators? Do you get all the fuel tanks? That's up to you to decide how you want your decommissioning to be written into the agreement.

Can you write a decommissioning into the land use?

You can put it into your zoning ordinance.

You can also put it into a performance agreement specific to each project.

Special use permit or conditional use permit process?

I suspect your economic development group would like to have a million square feet.

Brian, you want a million square feet?

A lot of that might get taken care of in a performance agreement. Like where they promise, specifically in Pennsylvania County, they've promised about 25 million jobs. I think in 20 years. So my economic development Director said to me, he said, you know, if they don't have 2,500 jobs, we can raise the tax rate on them. We can have financial penalties on them. He said, they'll pay people to sit over there and look at their phones before they'll let us raise the tax rate on them. So that's a very strong tool to use. And everybody does that.

Go back to the water. You know, a lot of localities right now are asking people to conserve water. The data center says they need 2 million gallons a day. How can that locality stop them from using that 2 million gallons if they say that's what they need?

I think I'd get out over my skis if I answered that. I think I'd get out over my skis if I answered that. I don't think I'd know the answer to that other than utilities have a requirement to serve. And I don't know what happens when they don't have the ability to do that. I would imagine that the reduction would be prorated across everybody at that point. But I haven't seen that addressed.

That's one of the things everybody needs to look at. Because if you can't stop, if the citizens are having to cut back on water usage, everybody needs

Thank you. Well, the utility does, they control the water, right? It's their water. It's their water. So I don't know what regulatory framework to do that under, but it's got to have some ability to regulate.

I did want to ask about neighbors. If you're aware if their land value is decreased when one of these comes in, or does it change the property values of those that are contiguous to the site? Are you aware of that?

I'm not.

I've seen some studies that go both ways. I think it's whoever pays for the study. It doesn't appear to. I have a picture of a data center in Manassas that was built in 2021, and it was nothing anyway. slammed up beside the fence beside it. So either the developer didn't think it was a big deal and the people that bought the townhouses didn't think it was a big deal. I was sitting in that cul-de-sac that night listening to see if it was a problem.

And these were really nice houses, right?

So I got on Zillow and I started looking to see what was for sale in there. And these were a million, million and a half dollar houses that you could hit that thing with a baseball. Maybe that would be $2 million if it weren't, but I think that's a 50-50 question depending on who you ask.

And then the land that's taken from those data centers, is that like a lost opportunity to have that land used for something else? I mean, is there a cost to that that you'd really give up maybe having affordable housing on that site versus a data center. So I just don't know if there's a lost opportunity there that you need to take into consideration when you're thinking about what that land is gonna be used for.

I think that's a land use thing that you can control with land use. So you people in this room are gonna decide at some point, and you have decided, that there's a place in this county that's appropriate for industrial development.

And you built an industrial park and you designed it industrial, right?

You've decided that there are places that are appropriate for housing. And you've done that. And my comment is when you've seen some projects that feed on industrially zoned property. And that doesn't mean that nothing is coming, most likely. Because in most instances, you've invested a lot of money to build an industrial park and infrastructure to put it there. So something is probably not going to be a par. probably going to be a distribution center or an OEM parts manufacturer or biomedical or whatever. It's probably going to be something industrial.

That's a land use question.

I think that's pretty easily handled.

I have a question for Larry. This is kind of out there a little. Is there a business case for, say, a co-location center in an economic development area, possibly with its own power supply, natural gas, or heck, even nuclear, so that you're using it as an inducement for corporate use rather than waiting for some corporation to come in and up other land?

Well, the answer is yes. And there are a few industrial parks in the state where you have a natural gas line going right past the industrial park. When we talk to these developers, they say they really don't want to own and operate a power plant. They would rather the utility own the power plant. That's an opportunity that the utilities could have to move in and build a plant. Typically the biggest challenge in doing that is a power plant takes a bigger footprint and it eats up your industrial cycles. So doing that makes it a little tough, especially in our terrain here in Southwest Virginia where we don't have a lot of flat land, but it's a great idea. I think that you would eliminate all the transmission costs associated with it because your generation is right there.

That's happening at the same time. If you've got enough money, you can make anyway.

Does anybody else have any more questions? Angie, what should we, in terms of direction or what do you think, what are our goals to leave this meeting having accomplished, do you think?

learn some some information which i think everyone has done that and if you have additional questions to bring them forward to staff we can try to get the answers to those for you i think that at some point the board of supervisors needs to give more direction to the planning commission and the planning staff as to what kind of direction you want us to move in do you want how do you want us to define data centers in the zoning ordinance

And that was going to be a follow up question I was going to kick straight to Bree and say, are your goals from this meeting? What are you hoping to achieve? It sounds like Angie's probably already answered that the Board of Supervisors needs to give some thought and direction to what to tell you.

Yes, that's what we're looking for. And, I mean, we're also here. My staff is actually in the other room watching. We're also here to learn because there's a lot to take in with data centers, and we all do. We all know sometimes you can't believe everything you hear. So it's good to get some facts and some stats. But yes, what we're looking for is direction on what you want us to study, what you want us to look at, what specifically our end goal is. And then we will work through that with the planning commission prior to bringing you anything.

I think it would be helpful if we knew from the groups what concerns you might have to make sure they can be addressed appropriately.

Excellent question. What concerns do we have, guys? And I'll start. I am just referring back to the beginning of the presentation when we talked about the three different types of data centers, a hyperscale data center, I find to be particularly off-putting, but an enterprise or co-location data center, there could potentially be a place for something of that scale and size, because it's not the 3,600 acre type data center. And then I am not at all impressed with looking at evaporative cooling for a data center, because I do think that the water draw for something like that would be significant for our community. So I guess those are my concerns or opinions.

I think we need to really think about, like, do you want to have conditions or do you just want to have by right? They can come in and do whatever. If they come in and do whatever, then you lose your ability. And I think that's a really good point about the conditional and special use. type permits, but what do we want? Do we want to have conditions? Do we want to be able to put conditions on a potential project? Personally, I would, but I don't know how everyone else feels. I think the buy-write thing creates a lot of potential maybe problems, maybe not. But to me, I think probably it does. So I would be in favor of looking at something that you at least would have some control with.

I agree with you completely.

This idea of evaluating them, not necessarily more power consumption and being able to kind of tier projects that way and you know it may be that you know i'm not endorsing it one way or the other but there could be a case for a buy right for you know a very small project you know one that still does fit in maybe not a closet but in a You can't just slide that one into the apartment department and start building that thing. So I think there could be some wiggle room or some consideration for different cases based on the scope of the project.

So you've talked about, we didn't ask this, you've talked about the different size data centers, right? What is the more common one now?

They'll take whatever they can get.

So the average one right now is 50 acres?

Well, you can't really say an average because the hyperscalers are going to weigh the average. One of the counties is very small. Okay. And they didn't ask, didn't tell the power company what they needed. They asked the power company what was available. And that's what they're going to build to. Okay. Because they're just following the power. There's electricity available.

I understand there's plenty of power in Virginia.

There's enough power for right now.

Thank you.

So I'm going to say it like this. I do think it's going to have to go with the conditional use. So I've said in the Christiansburg meeting and listened to that. I do think there's going to have to be a standoff. I would think that it would have to have We did it for solar, and we did it for other industries. Coal was a big one for reclamation projects once everything's done. Data centers are a little bit different because of the way the infrastructure is being built. But I do think that would have to be into the use. It would have to be the standoff, and it would have to be all under conditional use. The other thing is this, is because land out here is so finite in what we have available, That has to play a part into what we even entertain to come this way in the first place. So with those three things and trying to understand that Christiansburg is adjusting their definition to match up better with the state as they put in conditional use. Yeah, they're putting in conditional use exceptions for them in their industrial park and within the area because it was by right with them also. maintain the focus and not get blinded by what, like, by the time. Right. If I had more open available land, just to make that as a point of reference.

So you're saying you think that they should be regulated via conditional use permit and that you support a decommissioning bond or some sort of decommissioning language and we did it for solar.

Yeah, I mean, it's, it's a much different animal solar, we're sitting here trying to equate the use of a panel that's going to have a finite number of years, and it's not the same. But the one thing is, if you don't hold yourself to one standard, then you automatically create another. And we need to have that standard in place to be repeatable, and understandable, and consistent. with a progressive look going forward, knowing how we're going to grow. But with that, the understanding of this is the limitations that we have, and we have to be able to operate within that, and so do they.

I'd like to make a clarifying point about the definition of by right. Some of our surrounding counties don't have zoning at all. And so data centers can go there because there is no zoning. Others have by right uses in certain zone areas, districts. So it's a little bit different, but they are all allowed. So they sort of fall under that by right umbrella. But I think that the special use permit, sometimes people don't understand that and they think the general public might think special use permit, that means we want them. It means that if they come, we would want to have those guardrails that have been described this evening as opposed to having nothing in place.

And just to reiterate, our current zoning code has no provision that would allow a data center in Montgomery County at all, full stop. in the unincorporated parts of the county. And one of the reasons that Christiansburg recently went through the process that they went through related to data centers is because it was a by-right use in their industrial zoning districts. And so I think they needed some clarity around what they wanted in those zoning districts. Did Christiansburg send it through

area anyway well we couldn't put them anywhere because it's not allowed yeah it's not allowed at all but i'm saying even if we did it's so finite oh yeah and that needs to be understanded by the public because the way it is now it is a finite area and a finite ability to be able to do it even without anything else added to so yeah christiansburg has been through the planning commission and it's going to town council on

Angie, probably the direction that at least the Board of Supervisors needs to go is to have a dedicated work session to give some real direction.

This is helpful. And I think we can build a work session for you from this that will allow you to give more direction to the Planning Commission.

Right.

This is very helpful.

So

We don't have any other items on our agenda this evening. If there are no other questions or items for discussion, then we are ready to adjourn.