The Northern Virginia region clearly faces economic threats and challenges as a result of sequestration and government downsizing. The national economy continues to stagnate. If you are looking for a bright sign on our local horizon—the data center industry, which is expected to still grow by hundreds of millions over the near future, is a sector to double down on.
That is why, once again, this year, I worked with the Northern Virginia Technology Council, local business leaders and a bipartisan coalition in the General Assembly to pass another bill to promote this important industry that is thriving in Northern Virginia and throughout the commonwealth. Our aim is to be one of the most “Data Center Friendly” places in the country.
Each day, over 70 percent of the world's Internet traffic passes through Northern Virginia. Virginia has the highest concentration of technology workers per capita in the nation. In 2012, data center companies such as Equinix, Raging Wire, Latisys and duPont Fabros have expanded in Virginia along with industry leaders: Facebook, Microsoft and Amazon. As The Washington Post reported last year, the county now has about 40 centers comprising roughly 4 million square feet of space, which is equivalent to 22 Walmart Supercenters.
Buddy Rizer, Loudoun’s assistant director for Economic Development has made clear our local commitment to the industry: “Loudoun County remains one of the strongest data center markets in the country, and we expect this to continue for some time to come.” And the county still has lots of property for new centers. Data Center Knowledge recently reported, “This industry has helped drive one of America’s great economic development success stories. The tax benefits to Loudoun County have been incredible. We are very focused now on continuing to grow the data center cluster,” said Rizer.
We in the General Assembly are also committed to growing the data center cluster. With broad bipartisan support, we passed my bill HB 1699, which creates a separate tax classification, for purposes of permitting localities to set a lower personal property tax rate on computer equipment and peripherals used in a datacenter. We worked closely with Loudoun officials and other Northern Virginia technology leaders to make sure this would be helpful in their economic development efforts in attracting more business in this sector. I partnered with a rural senator, Ryan McDougle, on the bill because this industry is ideal for rural communities with space availability for the large centers and the need for anchors to attract business. This kind of partnership also gets all regions of the commonwealth committed to and invested in this growing industry.
This year’s legislation will build on my successful legislation last year, HB216 that provided state tax incentives to keep this important industry here in the commonwealth and to counter growing competition in other states. We have already had companies relocate or expand here in Virginia as a result of our legislation last year.
Both of these measures will help Virginia continue to be a leader in this 21st century marketplace. Data center expansion and investment are a critical element in diversifying Virginia's technology economy and attracting private sector jobs and local revenue as federal spending and procurement decreases. Data center projects bring substantial investment but don’t make a lot of demands on our schools or social services so it is one of those unique win-win propositions.
Local industry and business leaders now are looking at Loudoun County and Northern Virginia as “the Silicon Valley of the data center industry.” The growing Data Center industry can in turn serve to attract a broad array of technology companies and make us a center of innovation where all kinds of dynamic 21st entrepreneurs, industries and jobs can flourish and grow.
With the commonwealth and Northern Virginia uniquely situated to benefit from this industry growth, we will continue to work with our tech community and industry leaders to make sure we at the state level promote and protect this vital industry that will enhance and enrich our community for years to come.