Developer Abandons Massive Virginia Data Center Plan After Court Ruling
Compass Datacenters, one of the developers that had planned a 2,100-acre data center cluster in Northern Virginia, is stepping away after an expensive rezoning and legal effort.
The developer, along with Blackstone-backed QTS, had until Thursday to decide whether to appeal the Virginia Court of Appeals' March 31 ruling against the rezoning for the PW Digital Gateway project. Prince William County's Board of Supervisors voted April 15 to drop the county's legal defense of the project.
“Compass has reached the unfortunate conclusion that we cannot move forward with the Prince William Digital Gateway project,” Compass Datacenters President AJ Byers said in a statement.
“While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward,” he added.
QTS hasn't said whether it will appeal the ruling, and it didn't respond to Bisnow's request for comment. If it also steps away, it would effectively end efforts to build what would have been one of the largest data center clusters in the world.
The developers had planned to build 22M SF of data centers across 34 buildings, with a total power capacity of 1.7 gigawatts.
They have already put tens of millions of dollars into the project, Bloomberg reported. Compass is backed by the Ontario Teachers’ Pension Plan and Brookfield Infrastructure.
The legal dispute over PW Digital Gateway centered on a December 2023 rezoning hearing at which more than 400 people testified. Opponents later raised a legal challenge, arguing that the hearing was not adequately publicized, and a Virginia Circuit Court judge ruled in their favor in August.
The challenge was upheld on March 31 by the Virginia Court of Appeals, and on April 14, the Prince William County Board of Supervisors — which includes more anti-data center members than when it first passed the rezoning — voted to end its defense of the plan. The county had already spent $1.7M on attempts to rezone Digital Gateway, a spokesperson told the Prince William Times.
Aside from this project, Prince William County has already become one of the fastest-growing data center markets in the country, with activity spilling over from its supply-constrained neighbor, Loudoun County.
