The home of "Data Center Alley" in Virginia is vastly different from Lackawanna County.
"They had a lot of availability of land, openness. They already had infrastructures built. We're not at that point, and we don't have that availability of land," said Jerry Crinella, Jessup Borough Council vice president. "So it's kind of apples to oranges, and that's what my concern is, are we trying to reap the benefits without having the precursor or prerequisites to get those benefits?”
The Greater Scranton Chamber of Commerce organized a bus trip this week to Data Center Alley in Loudoun County, Virginia — about 231 miles south of Scranton down Interstate 81. Members of Jessup and Archbald borough councils, chamber employees, including Executive Director Bob Durkin, representatives from Lackawanna County and utilities, as well as local press, took the trip to Virginia for the day.
In Lackawanna County, there are at least seven data center projects in various stages of development. Others are proposed in Luzerne, Schuylkill and Montour counties.
A group of residents, especially from Archbald and Covington and Clifton townships, is concerned about the proposals. They worry the centers will be built too close to homes and will cause noise, water and air pollution, in addition to raising their utility rates.
The officials took the trip to learn more about the rapidly developing industry, which stores information from cloud computing to artificial intelligence.
David Tolson hosted the group at the 1757 Golf Club across the street from a concrete structure that will soon be Powerhouse Data Center. Tolson is the president and CEO of DBT-DATA. The real estate firm develops data center sites with an emphasis in the Northern Virginia market. Tolson, who was born in Wayne County, has letters of interest in two properties in Lackawanna County.
Caleb Kershner, one of nine members of the Loudoun County Board of Supervisors, and Buddy Rizer, the executive director for economic development in the county, spoke with the group.
“Data centers have become a dominant part, obviously, of our landscape and ultimately, our commercial tax bases,” Kershner said.
Old Dominion’s data centers
From Pennsylvania through Maryland and into Virginia, farm land and Christmas tree stands along two-lane roads slowly became housing developments and vineyards, then shopping centers, strip malls and car dealerships. Massive grey brutalist-looking buildings also started appearing along the highway.
There were breaks in conversations on the bus to ask, “Is that a data center?”
As the group got closer to Data Center Alley, warehouse-type buildings with colors and shapes lined the road.
For 14 years, data centers have continuously been built in the county.
Loudoun has the highest concentration of data centers in the world. They have about 200 in operation, with around 70 either in the advanced planning permitting or under construction stage, Kershner said.
The county’s first data center was built in 2008 and brought in $1 million in tax revenue, Kershner said. Today, the county’s data center-related tax revenues total around $875 million. In 2026, that revenue is projected to be around $1.1 billion between real property and personal property taxes, he said.
The investment has allowed the county to improve its local schools, Kershner said. They spend $20,000 per student. He said the fire and rescue services are world-class, and the sheriff's services are top-notch.
“Obviously, our core government operations and facilities have improved and ultimately provide a lot of predictability and stability,” Kershner said.
But there are big differences between Virginia and Pennsylvania.
Virginia vs. Pennsylvania
- Virginia can tax the equipment inside the data centers, but Pennsylvania can’t. When the data centers switch out equipment, that means more money for Loudoun, according to experts and WVIA research.
- Lackawanna County has 41 different municipalities, all with their own zoning laws. Loudoun County has seven incorporated towns that have their own zoning. For the rest of the county, the supervisors, such as Kershner, set the zoning standards.
- The counties are relatively close in size. Lackawanna is around 465 square miles. Loudoun is around 521 square miles. But the topography and locations are much different.
- Loudoun is outside of the Washington, D.C., metropolitan area. The golf club is 30 miles from the White House.
- Loudoun was mostly farmland and the Washington Dulles International Airport, but with a tech footprint.
- Ashburn is in Loudoun and under the county’s zoning. It’s the heart of the Eastern Seaboard's internet infrastructure. The area is not only a massive hub for data centers but also for fiber networks. It’s where up to 70% of global internet traffic flows, according to experts and WVIA research.
Loudoun's strategic plan from 2008 branded the region as “Data Center Alley,” said Rizer.
Rizer said he is known as the “godfather of Data Center Alley." He said he's gone from the most popular public official to the most hated.
“We had some leftover buildings from the dot-com bubble, and that was kind of my plan, I'm going to fill those couple of buildings with data centers,” Rizer said.
They planned to use 3.5 square miles for Data Center Alley.
“We're about 49 million square feet on the ground, with another 6 million square feet that's in some phase of development,” he said.
Lessons from Loudoun
Loudoun County stopped proactively seeking data center development in 2019, Rizer said.
"The first thing I tell everyone is, if you're thinking about data centers, define your opportunity up front, determine if you want them, where you want them, and know how many you want. And also determine under what conditions you want," he said.
Because Loudoun didn’t do that, he added. Its tax base before data centers was mostly residential.
“We were kind of desperate, and we were happy to take any money that was coming through the door,” he said. “But it's important that you understand where you want them, how that ties into your infrastructure. Do you have the water to support them? Not all data centers need water, but a lot of them do, and then try to figure out how do you then make it integrated into the community? If you can integrate it into the community, it's a huge win, but you have to be able to say ‘listen, we got this, it's done great things for our budget,’ but then you've got to know when to say when.”
Now, 51% of its tax revenue is commercial. They’ve saved the average homeowner around $3,500 a year on taxes by lowering the tax rate, he said.
Rizer said he’s doubtful they’ll approve more data center construction.
‘A matter of where and how’
Rizer said data centers are not optional.
"They are foundational for the future of our economy, $875 trillion of the economy by the end of next year is going to be dependent on data centers, so we have to have it,” he said. “So it's not a matter of if, it's a matter of where and how.”
Kreshner said Loudoun keeps data centers in appropriate zoning districts. There are setbacks and buffer requirements, and it now has architectural and design standards. They mandate landscaping and enforce noise limits.
Data center construction should be focused in areas of municipalities that are more commercially based, not near homes, Kreshner said.
Rizer agrees. He said that, if they have to be near homes, the centers should be 500 to 1,000 feet set back from residences.
He warned of the land speculator. Loudoun does business with companies with a track record of creating data centers.
“You can pick up newspapers every day, and somebody else is announcing the gigawatt campus here, a gigawatt campus there, 50% of them will never get built,” he said. “Just because somebody has a farm, and somebody comes in, and they say ‘look, this could be a data center,’ just beware the speculators, because that can be a challenge.”
Lackawanna’s tough zoning
The focus was not all on Loudoun County in Virginia.
Tolson has not submitted plans yet for data centers in Archbald or Jessup. He said the current laws make it tough to build.
"The conditional use approval process is the most restrictive I've seen in my 36-year career as a principal owner,” he said.
Tolson is a real estate developer. His first data center project was in 2007.
The process requires him to do a shell building design. That means he’d have to submit a full set of plans before he can even apply for a building permit.
"For me to just simply submit for a conditional use approval to find out whether or not I can build a data center on that site is $1 to $2 million,” he said.
Lackawanna County offers Tolson access to power.
"There's a shortage of electricity nationwide, globally, and Northeastern, Pennsylvania, does have excess power on the grid," he said. "I know in the sites that we're looking at, the transmission line that we would tap, it's not the locals' power, that transmission line goes to Northern New Jersey."
Outside a data center
The tour group was not able to go inside of a data center for security reasons.
Tolson brought the group outside a data center building that his company developed in 2014. He said it was the first two-level, two-story data center in Loudoun.
Tolson pointed to an Amazon Web Services data center over a field and past power lines and a fence.
“And if you see those rooftop units, that's an air cold system. So that system uses no water,” he said.
The amount of water used by data centers is a major concern for residents.
Daniel Markey is Archbald’s borough manager. He was joined on the trip by council members Marie Andreoli and Richard Guman, who recently voted yes to a controversial zoning overlay that would allow data centers to be built in the borough.
“It is good to get out and see these things in real life,” Markey said. “And kind of, you know, see what they're made of, and what they look like, what they sound like, and what they don't sound like.”
Tolson’s building was not a hyperscale center, which is a massive data center with extreme scalability. From outside the facility, the only noise was from the bus.
“There's no way we could ever have this many buildings,” Markey said. “They said this was all agricultural and farmland, etc., so they kind of had a blank slate to work with. Whereas in Archbald, it's an old coal mining town, the residences were there when the coal mines were there, and those neighborhoods were kind of built around the accessibility to the coal mines, and then the industrial and the commercial space is kind of filled in after that.”
He used the same fruit analogy as Crinella.
“This is apples and oranges, but it is good to get down here and kind of see what these things look like,” Markey said. “Hopefully, we could take the information that we learned here and hopefully quell at least some of the fears of some of the residents back home.”
