With state budget blessed, Stack advances Southern Virginia project
A sign greets motorists driving near the Southern Virginia Megasite at Berry Hill.
Now that Virginia officially has a budget that keeps a controversial tax break for data centers, a $100 billion investment in Southside Virginia is advancing.
"With the signing of the budget agreement reached by the Governor and the General Assembly, STACK Infrastructure can confirm that our project at the Berry Hill Megasite in Southern Virginia will continue to advance through our competitive site selection process," Kevin Hughes, chief external affairs officer for Stack Americas, told the Register & Bee in a Tuesday morning statement.
If the state had repealed a sales tax exemption for data center equipment that started in 2010 and is supposed to run through 2035, that would have put the investment — and 2,500 jobs — in jeopardy.
Senate Finance Committee chair Louise Lucas, D-Portsmouth, was steadfast in repealing the exemption, but a compromise reached more than a week ago kept it in place.
With the amount of technology needed for a large data center, not having the break on the state sales tax would add up quickly for operators. Keeping the exemption, the state budget instead imposes a new version of a tax on energy consumption.
That tweak is expected to generate $1.2 billion for the state general fund balance. Lucas said the state is losing $1.9 billion a year because of the sales tax exemption.
Proponents of the tax break counter that data centers contribute far more than that to the state's economy.
A local performance agreement signed June 14 between Stack Infrastructure and the Danville-Pittsylvania Regional Industrial Facility Authority, the joint city-county group that owns the megasite, lays out metrics of $100 billion in investment over 30 years. While it did not specifically link the deal to the state tax break, the company previously pointed to the measure as being critical for the project.
The company that develops and operates data centers plans to construct a digital infrastructure campus at the Southern Virginia Megasite at Berry Hill.Â
"We look forward to continued collaboration with state and local leaders to move this transformational project forward and to ensure the Commonwealth remains a competitive destination for large-scale investment," Hughes told the newspaper.
The 3,500-acre megasite, billed as the largest on the East Coast, has been in the works since 2008. In the agreement, Stack will purchase 2,990 acres over a phased process.
There are no local incentives in the agreement with Stack.
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