Cars drive past a data center in Ashburn, Va. Photo by the Associated Press.

Botetourt County officials expect construction on the first of three Google data centers to start this year, but they are already spending the tech giant's money.

Google paid $14 million to the county for the land at the Botetourt Center at Greenfield, an industrial park in southern Botetourt County. The company has also pledged to give the county a $4 million grant to spend however its officials want.

So far, they've bought three ambulances for $1.1 million, new body cameras and equipment for police that cost $2.5 million, and $300,000 worth of heart monitors for EMS.

County officials are planning to spend $320,000 to build four pickleball courts and two tennis courts in the Greenfield Sports Complex. They're spending $3.5 million to renovate the Buchanan Library Branch and $3.6 million to build a community events center. And they're putting $500,000 toward the construction of a Botetourt historical museum.

"I think I was quoted whenever the announcement actually took place that I said, 'This was like winning the Super Bowl of economic development,'" Botetourt County Administrator Gary Larrowe said. "This is one of the larger projects that has ever hit western Virginia."

Google will construct three data centers on more than 300 acres at Botetourt County's industrial park at Greenfield. Photo by Julianna Stephenson.

'Gold rush': Counties chase tech companies' cash

By Kate Keeley and Cate Wachholz

Graphic by Kate Keeley

Economic development officials across the state share a similar sentiment. Even a single data center can significantly boost local tax revenue.

Counties primarily collect revenue from data centers through real property taxes on land and buildings. The data center owners also must pay business personal property taxes on servers and other equipment inside the facilities.

Both taxes can generate substantial annual revenue for local governments because data centers house expensive technology and occupy large amounts of land. Doug Parsons, the economic development director for Fauquier County, said one facility could help fund schools, roads and public services.

"I would equate it to a gold rush or an oil and gas boom," he said.

But the money doesn’t flow one way. Tech companies save billions of dollars because Virginia has exempted them from paying sales and use tax on the purchase of new equipment since 2010. The Virginia Department of Taxation reported that data center operators saved $1.3 billion in Fiscal Year 2024 because of the sales and use tax exemption. Efforts to repeal the exemption delayed passage of the state's budget and forced the governor to schedule a special session in April 2026. But lawmakers failed to resolve the impasse. It's unclear when they may reconvene.

Where are the Google funds going in Botetourt?

Graphic by Kate Keeley

Cash cow

Data Center Tax Rate in Virginia Counties

Graphic by Cate Wachholz

Henrico County, which partially surrounds Richmond, also offers its own tax incentives for data centers. The county taxes data center operators $2.60 for every $100 worth of computers and equipment, according to the county's website.

Comparatively, Fauquier County taxes data centers $4.15 for every $100 worth of equipment, the county's website says.

Over the last five years, Henrico County has transformed into a data center hub. The county hosts roughly 40 data centers, according to the county's Planning Department.

Henrico County dedicated $60 million of data center tax revenue for affordable housing in 2024, said Brian Anderson, president of the Richmond Chamber of Commerce. Anderson said the decision was a good public relations move that boosts the county's image.

Loudoun County became one of the first regions to develop large numbers of data centers. Today, the industry generates nearly $1 billion in annual tax revenue for the county.

Loudoun County Before and After Data Center Development

Graphic by Kate Keeley

In Culpeper County, economic development officials have created the Culpeper Tech Zone, a designated area for the development of data centers.

The CTZ spans 950 acres and includes eight campuses, a technical education center, a community college, and public utilities. Several projects have already been proposed or approved within the zone, including multi-building campuses covering millions of square feet that will require hundreds of megawatts of electricity.

The projects are expected to generate $7.56 billion in economic impact over 15 years and create approximately 9,600 jobs, according to the CTZ Economic Impact Study. Most of the jobs created will be for construction, which has begun on some projects in and around the zone. Other projects remain in planning and approval stages. The data centers are expected to employ about 2,000 on-site workers by 2040, the study says.

"The tax revenue that we're going to receive is so, so prolific. Even if we're half right–even if we're 10 percent right–it's a significant number," said Bryan Rothamel, Culpeper's director of economic development. "And if we're completely right, imagine what a county could do if they could build a courthouse in cash every year."

Culpeper County offers its own tax exemptions. Its tech zone offers a tax reimbursement program that returns 40% of taxes paid over five years to companies that invest at least $10 million and create 10 jobs that pay the average wage or higher, according to the study. Businesses in the zone also can build taller structures, up to 75 feet high for data centers, compared to 45 feet in other industrial zoning areas.

Cows graze near transmission towers in a Rockbridge County field. Photo by Liz Trubeck.

Tony Howard, who leads the county's Chamber of Commerce, said that $1 billion is all Loudoun needs for its operations except for schools. That means about one-third of all tax dollars in the county comes from data centers, said Michael Armm, a consultant and former data center developer in northern Virginia.

The windfall from data centers has allowed Loudoun County to lower real property taxes for residents every year for the past decade, according to the county's website. It currently sits at $0.805 per $100 of assessed value. In 2016, residents were taxed $1.145 for every $100 of assessed real estate value, according to the Virginia Department of Taxation.

Loudoun County has a population of about 443,000, with a 4.3% poverty rate, according to U.S. Census data. It has a median household income of about $182,000.

Botetourt County, on the other hand, has about 34,000 residents. Its median household income is about $81,000, and 5.2% of residents fell below the poverty line in 2024, according to Census data.

Rural counties see economic opportunity in data centers. But they want to limit growth. In other words, they don't want to become Loudoun County.

Big Tech goes rural

The industrial-zoned land in Botetourt County where Google plans to build a data center campus. Photo by Jordan Hoover.

Part of data centers' allure for small counties is that they can boost tax revenue to the area without increasing demands on schools with more children to educate or housing with more homes needed for people to live in, said Parsons, Fauquier's economic development director.

"Data centers have few employees, but they're very well-paying jobs," he said. "But that doesn't create a lot of traffic. It doesn't create a lot of burden on your school system."

Data centers typically employ about 50 people, with average salaries around $100,000 per year, the Joint Legislative Audit and Review Commission said in a 2024 report on data centers in Virginia. The construction phase brings roughly 1,500 workers on average, the report said.

The industry contributes an estimated 74,000 jobs statewide, $5.5 billion in labor income, and $9.1 billion in GDP to Virginia's economy annually, according to the report.

Fauquier County doesn't have many data centers. The two it has are small and bring about $8 million of tax revenue to the county each year, a small percentage of its total collections, Parsons said. Most of the county's revenue comes from real estate and personal property taxes, according to the county's budget for Fiscal Year 2025.

He said that three or four data centers in a rural county like Fauquier can be a game changer. But officials in Fauquier County don't aspire to grow the data center industry beyond that.

The county also doesn't have enough water to support a large concentration of data centers, Parsons said. Data centers require a large volume of water, depending on the type of cooling system they use, to prevent equipment from overheating.

They also need electricity. Initially, data centers were small and needed less power. "Hyperscale" data centers are much larger and built for tech companies that are processing huge amounts of data and training and powering AI models. Hyperscale facilities use much more electricity and rely on powerful chips like Graphic Processing Units (GPUs) to process large workloads quickly.

In 2021, Amazon bought a 42-acre piece of land on which it wants to build a 220,000 square-foot facility in Warrenton. But the AWS project has been stalled by a lawsuit filed against the town by an environmental nonprofit organization, Citizens for Fauquier County.

"It was torches and pitchforks at public meetings," Parsons said. "'Hey, I don't want this thing coming through my farm.' 'I don't want this coming through my yard.' Understandably, right? None of us would want these things."

The proposed AWS data center is slated for a plot of land across the street from a neighborhood and a shopping center.

Amazon Web Services built a data center less than 300 feet behind homes in Loudoun County. Photo by John Little.

"Nobody in this industry wants to be a bad neighbor. Everybody wants to get approved and be allowed to operate," Armm said. "People also sometimes have to remember, though, that they decided to buy a house next to industrial zoning or next to something that maybe wasn't industrial zoning yet, but it was in the community's comprehensive plan to be an industrial zone."

The Google data center coming to Botetourt will also be built adjacent to residential properties and near a school. Data centers in Loudoun County and Henrico County also come close to residents' properties.

Armm, the former data center developer in northern Virginia, said location matters for developers and that many projects are intentionally sited in industrial areas to avoid residential conflicts. But he also argued that homebuyers should be aware of existing zoning and long-term land use plans before purchasing property.

Residents pay the price

Power lines near the Botetourt Center at Greenfield. Photo by Jordan Hoover.

There is also a financial catch for residents: Rising energy demand from data centers creates new infrastructure costs, which can be spread out among ratepayers.

Data center power needs have increased dramatically in recent years. Earlier facilities required about 12 megawatts of electricity, said Daniel Kociola, an economic development market specialist at Dominion Energy. But new data center campuses may require 300 megawatts or more, he said.

Dominion Energy has seen a surge in development requests in the past two to three years, Kociola said, and now the utilility company doesn't even market data center-zoned land because there is a waiting list of developers who want to build new data centers.

Dominion Energy legally can't deny requests for power from new data centers, he said. The company must comply and fulfill the energy requests. But he said Dominion Energy can put requesters on a waiting list for years.

"The law is that we have to serve a data center, not that we have to serve it tomorrow," he said. "And we typically can't serve it tomorrow."

New facilities often require large infrastructure investments such as transmission lines and substations. Kociola said data centers pay for the power they use. But the cost of building new energy infrastructure and meeting the rapidly growing demand for energy can still be passed on to all Dominion Energy ratepayers.

The average Dominion Energy electricity bill in 2007 was $90.59, according to an October report from the State Corporation Commission. It increased by 65% between 2007 and 2025, the report said, and residents now pay roughly $150 each month on average.

Appalachian Power Company has seen an even larger increase in power bills–a 160% increase over the last 19 years to be exact. In 2007, the average Appalachian Power bill was about $66 and is now more than $173, the SCC’s October report said. Appalachian Power will supply energy to the Google data center in Botetourt County, according to the county's website.

The SCC created a new rate class for Dominion customers last November to make large electricity users pay more in an effort to decrease financial pressure on residents.

But residents will still see a rate increase. For a typical residential customer, the approved rates would mean monthly increases of $11.24 in 2026 and $2.36 in 2027, the SCC said.

The Joint Legislative Audit and Review Commission reported that the typical residential bill is projected to rise by about $14 to $37 per month by 2040 as energy prices increase and utilities potentially rely more on higher-cost imported power from other states.

Virginia imported the most energy from other states in 2023, according to the U.S. Energy Information Administration, a federal agency. It is unclear which states Virginia imports the most energy from, but Pennsylvania delivered the most energy to other states that year, followed by Alabama, Illinois, Wyoming and Arizona.

Dominion Energy is already involved in multiple new energy projects, including a 176-turbine offshore wind farm being constructed off the coast of Virginia, Kociola said.

The utility has also teamed up with two transmission companies, FirstEnergy Transmission and Transource, to propose a new 115-mile electric transmission line. The so-called Valley Link project would run from Campbell County to Culpeper County if approved by the SCC, according to the project's website.

End in sight

Carvins Cove Reservoir will supply water to the Google data center campus in Botetourt County. Photo by Julianna Stephenson.

Virginia's data center boom raises questions about long-term economic sustainability for counties.

As counties across Virginia chase the economic benefits of data centers, officials are also beginning to ask how much growth is too much.

Like Parsons in Fauquier County, Rothamel said he's not trying to compete with Loudoun County for data center growth. He said he's happy with where Culpeper County is.

Howard, the chamber of commerce president in Loudoun, said the development pipeline is probably going to plateau in five to seven years because the county is running out of land. He said there's only so much that can be built unless the Board of Supervisors makes zoning changes.

"I don't anticipate them doing [that] at all," Howard said.