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Data centers continue to surge in Loudoun County

The Christian Fellowship Church in Ashburn, which is being purchased by data center developers. Times-Mirror/Rick Wasser
The homily was about change. In a letter to the parishioners of Christian Fellowship Church, Pastor Brian Bales informed his flock that the Ashburn mega-church would be moving away from the data centers overtaking the neighborhood off of Loudoun County Parkway.

“Since we purchased the property over a decade ago, Loudoun County has changed,” Pastor Bales explained. “Our church has become more physically isolated.”

As with many institutions in Loudoun County, the Christian Fellowship Church was confronting growing pains. Expanding physically and spiritually, the 10-year-old mega-church on Beaumeade Circle planned a $5 million renovation, but carried $4.5 million in debt on the 22-acre campus that includes a 200,000-square-foot sanctuary, a school, sports fields and parking lots.

Then came a miracle. An angel appeared from The Cloud with an offer that even the saints couldn’t refuse. In a transaction that Pastor Bales described as “unparalleled in Loudoun County history,” the church campus was sold to build data centers on the property. The price was not disclosed, but data-center insiders say it exceeds $1 million per acre.

The buyer is a neighbor. Church property sits amid a cluster of nondescript data centers that some describe as soulless bunkers for computer servers. Buildings such as these will consume the campus, extending the unmistakable identity of data centers to a large swath of Ashburn. The church will relocate by 2020.

In Loudoun County, heaven and earth are moved for data centers.

The church deal is not an isolated story. The recent decision by supervisors to rezone woodlands for a new cluster of data centers in the county’s “transition zone” is another example of the paradigm shift transforming the traditions and landscape of a county that grows by 31 people each day. Opposition by longtime residents is blunted by the sheer force of growth.

The Mt. Olympus of The Cloud

This is a parable about real estate, pelf and an obscure deity known as The Cloud. It is the Loudoun County story.

In the simplest terms, The Cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as a puffy, white cumulus cloud, accepting connections and doling out information as it floats in the sky.

Over the last decade, the gods of data -- Internet titans including Amazon, Google, Facebook, Microsoft and Japan telecom NTT -- descended on the county as if it was the Mt. Olympus of The Cloud. A land rush ensued to locate connections to The Cloud to exchange points in or near Data Center Alley.

Cloudwatchers and groundbreakers claim that 70 percent of the world’s Internet traffic is exchanged in Loudoun County. Although the number is anecdotal -- the precise amount of data moving through one spot on the Internet at any one time is difficult to know or accurately calculate -- it brings global attention to the county’s unique digital assets.

“We think we are still the best data-center market in the world,” Buddy Rizer, Loudoun’s director of economic development, told the Times-Mirror earlier this month. “We are not the cheapest, but we still have the best infrastructure.”

A decade-long land rush has brought approximately 75 data centers to Loudoun County covering 10 million square feet of space filled with racks upon racks of computers. Data centers yield $150 million in property tax revenue based on assessed value of about $3 billion, the county claims.

Graphic/Dale Peskin


While the economic development department won’t disclose specific locations, anyone driving new roads in Ashburn is bound to arrive at a data-center destination.

Rizer says the county wants to “balance the fact that we want them in certain places where they have a minimal effect on our residents.” But the surge appears too powerful to be contained. Boundaries are being breached to accommodate an irresistible force.

They’re not making any more land

As land designated for data centers grows scare, demand to store and access data increases exponentially. Data’s dealmakers and developers don’t have the power to make more land.

The data center surge now heads beyond Data Center Alley, where land is abundant and comparatively cheap for the multinational companies that monetize The Cloud.

The spread of data centers makes property owners and preservationists nervous, particularly in western Loudoun, where residents question land-use policies that guide the county’s current vision of progress.

Decisions fall on Loudoun’s supervisors, a board that has consistently sanctioned the ubiquitous spread of data centers, citing the property tax revenue they yield. The impact of current data center decisions has been compared to the controversial 5-4 vote by supervisors in 2012 to extend the Metro rail system into the county.

By another 5-4 margin in January, a divided board enabled the extension of data centers into the county’s transition zone with a rezoning vote for True North, a 100,000-square-foot cluster of data centers on Goose Creek near Leesburg.

Supervisor Geary Higgins (R-Catoctin) questioned the judgment of the five supervisors who approved the project in “the wrong place.”

“If we have the capacity to do this, we have the capacity to do even dumber things,” Higgins admonished his colleagues.

Higgins’ assessment has become a rallying cry for the hundreds of residents who publicly opposed the True North project and fight the encroachment of data centers deeper into Loudoun.

There is pushback, too, in Data Center Alley. Half the respondents to a survey in Supervisor Ron Meyer’s Broad Run District cited concerns about data centers, an issue they regarded as more serious than property taxes or school funding.

Connections to The Cloud

Northern Virginia is where some of the earliest connections to the Internet were established. Carriers such as WorldCom, later acquired by Verizon, established interconnected networks and provided global access to the Internet from former farmland in Ashburn. The distributed Internet exchange, MAE-East, then brought data-center operator Equinix to the region in 1998, stirring development of the world’s biggest data center market. Equinix has been adding a new data center in northern Virginia every 18 to 24 months.

The more recent growth of cloud computing has brought a burst of data center leases and land deals in the county, most in or around Ashburn. Most deals are conducted privately, outside the scrutiny of county residents, protected by non-disclosure agreements with county planners, undisclosed sales agreements between parties or third-party agents for well-known Internet companies. The outcome: The suburban village of Ashburn has been transformed into an industrial park for data centers.

Loudoun County Director of Economic Development Buddy Rizer at his offices in Ashburn. Times-Mirror/Rick Wasser


With data center developers laying the groundwork for the next phase of Cloud growth, the world’s largest data center market is about to get even bigger. Players representing Amazon Web Services, Facebook and Google have recently acquired land in northern Virginia. Multinational data center providers that currently operate in Loudoun -- companies such as Equinix, RagingWire (the American subsidiary of Tokyo-based NTT), Vantage, Dupont Fabros, CyrusOne, Corporate Office Property Trust (for Amazon Web Services) and Sabey -- are staking out ground.

Running out of land is the only thing that can slow down the market.

“Land is probably our only limiting factor here in northern Virginia,” Rizer told attendees at a data center investment conference in Ashburn recently.

Land values have reached $1.2 million per acre in recent deals in Ashburn, according to industry analysts. Deals currently in the works could exceed that valuation, as the scarcity of prime development sites drives prices higher. One property owner in the market is reportedly seeking $2 million per acre.

The Cloud expands

The Cloud now heads toward Loudoun’s most iconic properties. Data center providers are looking at “the perimeter of Data Center Alley” -- code for the abundant acreage that’s available in western Loudoun and Prince William counties. Acquisition of large tracts of land is required to house the next surge in data.

“Land will be a significant issue in Loudoun,” Bill Stein, CEO of Digital Realty, predicted at the investment conference. “I think that’s why you’re seeing this sort of mad rush to acquire land, because the availability of suitable sites is definitely depleting.”

“As a result of the continued development over the past several years, available land for future development in Ashburn has become increasingly scarce,” added Chad Williams, CEO of QTS Data Centers.

That’s why developers are expanding their field of vision, looking for prime sites beyond Data Center Alley.

The developers’ concerns are firmly grounded. Land -- lots of it -- is required for the secure, windowless, concrete structures that wrap around computer racks, not up in the clouds, but on the ground, rarely higher than the tree line.

With the expansion of the “Internet of Things” -- the connections among digital devices and the upcoming trend toward more immersive and interactive user interfaces -- the next phase of Cloud growth heads back toward Loudoun’s elaborate connections to the Internet.

The county’s economic development department has identified 43 sites for the expansion of Data Center Alley. That may not be enough, as more acreage is required for the jumbo-sized warehouses -- 100,000-square-feet or more -- that data-center operators say they need.

At $1 million or more per acre, even the most committed landowner in western Loudoun may be compelled to sell -- stone walls, rolling hills, equestrian trails, polo fields, stunning vistas and all. The operation of pastoral compounds, vineyards or horse farms is a costly proposition for families who inherited or purchased land but face restrictive rules on how their property can be used.

The data center land-rush provides a financial way out. Data center providers have access to plenty of money and have room to negotiate. Compared to a cost of $16 million per acre in California’s Silicon Valley, $1 million per acre in Loudoun is a bargain.

Emboldened by the True North rezoning precedent, property owners with adjacent land in the transition zone are counting on data-center providers acquiring their land.

The new old thing

Loudoun has been here before. The new thing -- land use -- is also the old thing.

Ashburn’s history provides context. It was not long ago that Ashburn was considered a pastoral frontier. The village, formerly called Farmwell, developed around a church, a rail depot and an agrarian society in rolling terrain. Once known for trees instead of concrete, Ashburn takes its current name from a local legend. A bolt of lightning struck an ash tree on a farm belonging to prominent citizen, the legend goes. The ash tree burned brightly for days, bringing the curious to the village.

Today, another bolt of lightning causes the curious to flock again to Ashburn. If data centers can overtake Christian Fellowship Church, will land-rich neighbors such as 1757 Golf Club follow? At $1 million and more per acre, the 200-acre golf club between Waxpool Road and Loudoun County Parkway could fetch at least $200 million. Outside the data center target zone, a golf course and country club on 159 acres in Reston recently sold for only $14 million.

While many seek heaven from a church or a golf course, Loudoun looks to The Cloud for deliverance.

Comments


If you ever want an illustration of how bad land use planning is in Loudoun, look around the soon-to-open metro stops.  Acre after acre of data centers…not residential housing like you see around the Reston stops.


Data centers have proven to be a key business use keeping us, the residents of Loudoun County, from ever higher taxes.  Without the data centers, our taxes would be through the roof.  I hope the five who voted for the True North data center win re-election.  These are the people we need to keep.


@ Skyprince, Agree with your statement 100%. well said.


Amazon is coming to Ashburn. There is no way they’ll pass up this region. Loudoun is the center of the data center world and Amazon is the biggest data center user/seller on the planet. With plenty of affordable land, politicians just down the road, and the CEO with a home in the area, it is pretty clear Amazon is on its way. I wouldn’t be surprised if CFC’s Angel is Bezos himself.

If you own property in Loudoun, expect to retire as a millionaire.


John, while you say that in jest, I think you have a good idea.  Amazon is looking to control their entire logistics train.  Currently, they are trying to figure out how to cut out the shippers and have their own shipping.  Why not try the same with aircraft?  That is already part of their logistics train.

I’d welcome Amazon running the airport.  They would actually figure out how to operate it efficiently and turn a profit on it.


Just once before I leave this earth, I wish we had a BOS who looked out for its constituents…not some wealthy developer. The 5 BOS who voted for the True North zoning should be ashamed of themselves, they are truly clueless and disrespectful of the people who voted for them. We don’t need another ugly data center…why not just put a target on the county so the next attack can take out the 70% of the world’s internet traffic portal in one swoop? When these lamebrains are up for re-election we will not forget who voted to create a county for out of state interests, instead of protecting its own citizens. Sad…


David Dickinson, maybe Amazon will buy Dulles Airport and use it as a shipping hub! Just kidding….maybe.
Any business that resides in Beaumeade Circle knows that Equinix is circling, and has been for at least 10 years, looking to buy up that whole area. Hold out for your price people, Equinix will give it to you!


And this Loudoun-changer just in: the federal government is proposing to sell Dulles Airport.  That will have an interesting effect on the local economy too.


70% of the world’s internet flows through Loudoun, yet residents in the western county are without broadband internet acccess.  Many 3rd world countries have better internet….


Great article on the conflict and opportunities before us.

Ashburn, in such a short time, is barely recognizable and hurling forward even more rapidly.  I guess that is a synopsis of the County.

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