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On March 13, 2024, Governor Youngkin, along with other state and local elected officials, gathered at Germanna Community College’s Spotsylvania campus to confirm that Amazon Web Services (AWS) will be making a 35-billion dollar investment in data centers in Spotsylvania, Caroline, Stafford and Louisa counties. AWS also announced that their ‘AWS Community Fund’ will be committing $400,000 in community grants within those four localities.
Efforts that led to this announcement span back eight years and involved a highly collaborative approach. The Virginia Economic Development Partnership (VEDP) along with the Fredericksburg Regional Alliance (FRA), local economic development teams, and representatives from AWS worked in tandem to meet the extensive needs of the project, collect community input, and, eventually, secure the largest single economic development investment in the history of the state.
Beginning in 2016, work began to prepare the region for data center development. The FRA, working with Dominion Energy and Rappahannock Electric Cooperative, initially identified sites across the region that were fifty acres or more, located along transmission lines (a ‘must’ for data centers), and away from dense residential developments. These sites were then reviewed by local partners. While this was happening, the FRA created a ‘Data Center Marketing Package’ to distribute to data center contacts. These efforts paid off when, in August of 2017, meetings were secured with the Directors of Economic Development at AWS.
In early 2018, the FRA, along with the counties of Loudoun, Prince William, Fauquier, and Culpeper received an RFI for ‘Project Holiday,’ which would later be identified as AWS. Working with VEDP, the FRA collected submissions from all localities and submitted them to VEDP as well as directly to AWS.
“When the Fredericksburg region received the request for Project Holiday (Amazon Web Services), partners in the region immediately began working together to ensure a win for Virginia,” said Jason El Koubi, President and CEO of VEDP.
In early 2019, the FRA received feedback from AWS regarding the confusing array of local tax rates and depreciation schedules. To address these concerns, a meeting was coordinated with administrative leadership and economic development directors, along with the Stafford County Commissioner of Revenue, to discuss harmonizing tax rates and depreciation schedules. All localities agreed to pursue a $1.25 business personal property tax rate (Prince William County’s then-rate) for data center equipment. A common depreciation schedule was also negotiated between the commissioners of the other four jurisdictions.
“The FRA communities collectively aligned their approaches to avoid competing against one another, and focused all of their energy on landing this project for the Fredericksburg region and Virginia,” El Koubi stated.
Josh Levi, President of the Data Center Coalition, also noted, “These unique, forward-looking regional marketing, tax, and regulatory initiatives highlighted Greater Fredericksburg’s competitiveness as a destination for data center investment.”
While ‘Project Holiday’ was put on hold in 2020, the work to bring data centers to the region continued. From July 2020 - November 2021, at least six data center site visits were hosted in the region. In early 2022, VEDP was informed that AWS had renewed their interest in the region.
Finally, in early 2023, AWS acquired and entitled approximately 2,500 acres to develop 18-19 million square feet of data center space in the region. While doing so, AWS, along with Germanna Community College, school superintendents, CTE Directors, electrical and trade unions, and the FRA began hosting a series of meetings to address the upcoming workforce needs for data centers.
Roger Wehner, Director of Economic Development with AWS stated, “AWS is committed to being a good neighbor, and we spend a lot of time listening to and understanding a community’s needs and priorities. The Fredericksburg Regional Alliance has been an instrumental partner in connecting us with business, education, and community leaders in the Fredericksburg area to ensure our data centers drive job creation, investment, and programs that benefit the region.”
The work culminated at the March 2024 event where Governor Glenn Youngkin announced the 35-billion dollar investment in data centers in the region, creating approximately 2,000 new jobs. AWS also announced the launch of two AWS InCommunities Funds to support local projects in Caroline, Spotsylvania, Stafford, and Louisa counties in Virginia.
Jeff Black, chairman of the Caroline County Board of Supervisors, also spoke briefly at the event. To emphasize the impact of this investment, Black noted that AWS is investing $6 billion in his county which has an annual budget of $55 million. Black stated, “It would take 106 years to make that up in our current budget.”
This historic investment in the region was only made possible by the collaborations of local jurisdictions and the ability to create a regional approach to bringing data center jobs and investment to the area.
Kevin Hughes, VP of Public Affairs at STACK Infrastructure, believes that the work of the FRA was a ‘significant difference maker’ when competing with other locations in the state and country.
“Businesses considering large investments in a new market have an extensive list of business and technical considerations influencing decision making. Wrapped around those considerations are “unknowns” about how to evaluate and partner with local government, communities, utilities, and the rest of the business ecosystem,” Hughes stated.
Hughes continued, “This is a key value proposition that the Fredericksburg Regional Alliance provides to those interested in investing in the greater Fredericksburg region. The recent announcement by AWS sent a signal to the market that the Fredericksburg Region is a great place to locate.”
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