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Loudoun County’s data center market continues to surge

Courtesy/Equinix
The number of data centers in Loudoun County is set to grow more than 50 percent after a bevy of new land parcels have been identified as suitable for companies looking to build new centers in “Data Center Alley.”

By this time next year, Loudoun County could house more than 100 data centers.

“The data center industry has been so important to Loudoun County,” said Buddy Rizer, the director of economic development for Loudoun County. “It's been really one of the big drivers that has allowed us to do what we need to do as a growing community. It's $150 million or more in local tax revenue. As we've gone through our growth we've seen that most of the easily identifiable spots are pretty much spoken for. We want to balance the fact that we want them in certain places where they have a minimal effect on our residents.”

This is mind, the department recently undertook a deeper dive into land parcels that may not have been obvious first time around. Now, those sites have been identified. Discussions were had with landowners and potential sites were assessed to see if they had the right resources, such as making sure they have the right power capacity and appropriate zoning. On the back of this exploration exercise, a total of 43 new sites were earmarked as suitable for data center development. The number of data centers operating in Loudoun County to date stands at 70.

Data roots run deep

Loudoun has been known as the king of data centers for some time now. The 1990s was when the “dot com” bubble started to inflate, and AOL established its Dulles campus in the second half of the decade. Major telecommunication companies relocated operations from Tysons Corner as more internet traffic meant a need for more space. One Loudoun site, known as MAE East, became a nerve center for all east coast internet communications, acting like a doorway to the internet.

The groundbreaking ceremony for the now infamous WorldCom took place in 1998 in an Ashburn farm field. At the time it was the nation's second-largest communications company. WorldCom also owned UUNET, which formed a major part of the backbone of the expanding internet. WorldCom built a huge campus on a 590-acre site along the road that is now Loudoun County Parkway. It employed more than 3,500 people, acquiring and merging its way to becoming a telecom and internet powerhouse with billions of dollars worth of assets. Miles of fiber were laid underground, extending internet lines to the world from Loudoun County. Then Gov. James. S. Gilmore (R) nicknamed Virginia, the “Silicon Dominion.” Today, the corridor commonly known as “Data Center Alley.”

But the glory days were not to last. A few years later, WorldCom-MCI, the largest merger in U.S corporate history ended in the largest bankruptcy in U.S history. And things would only get worse. The tech bubble burst worldwide, and a recession hit the “Silicon Dominion,” a trend felt across the globe.

Ten years ago the green shoots of recovery began to be seen. Loudoun County economic development officials began trying to attract data centers, with the first three were set up in empty buildings.

“There hasn't been a day without data center construction here in Loudoun County for the best part of the last decade,” Rizer said. “It's driving the construction industry, it's driving the technology industry, it's driving the 3,000 technology companies that are inside our data centers.”

Major players eye Loudoun

Of the 43 new sites identified as ripe for data center development, a several have contracts according to Rizer, who said he's confident the rest will go to market by spring time.

“We've actually closed a couple of deals we will be announcing soon that will start building this spring,” he said.

The international data center market has its eyes on Loudoun. Rizer said they are working with a German company and a few others. "It's an important thing for these companies to make sure they are all competing on the same playing field," he said.

“We think we are still the best data center market in the world,” said Rizer. “We are not the cheapest, but we still have the best infrastructure. We have the best time to market. We have the best workforce. We have great power from a price stand point and a reliability stand point.”

Rizer wouldn't confirm if any household-name companies are planning to locate in Loudoun, saying there are a number of non-disclosure agreements in place. But, he added, “you point to a major internet company, they are either here or looking to be here.”

The county is no stranger to attracting big names. Amazon Web Services operates data centers out of Northern Virginia, first setting up shop here in 2006. Vadata Inc is Amazon’s subsidiary company for anything data-center orientated. They have addresses in Sterling and Ashburn.

Loudoun County's economic development department notes that 70 percent of the world's internet traffic travels through Loudoun County each day. A significant portion of that traffic is believed to be from Amazon Web Services. The once-troubled MCI still operates here, though it's now a subsidiary of Verizon. It runs its Network Operations Center and Government Operations Center at the former WorldCom campus.

As for 2017, the latest round of construction is driven by cloud expansion.

“The major cloud players are all trying to stake out their territory,” Rizer told the Times-Mirror. “It's become a cloud war out there. Everyone is trying to battle for their part of the market and much of that battle is being fought right here in Loudoun County.”


Comments


Not only do they not create many jobs, many of the jobs are filled by H1B visas instead of citizens


Data centers suck up a lot of electricity & don’t provide many jobs, but they do generate tax money.

Better than having 100’s of grey, plastic siding, look-alike ‘townhomes’ that fill the schools and roads. Or fake ‘town centers’ filled with chain franchises.

Supervisors should use the extra tax money to provide broadband Internet access to the half of the county lacking it, so that those folks could see what the data centers do….


Once they are obsolete we can transform them into indoor skating parks or turn them into housing for people.


I’m trying to do a bit of research about the impact and value of data centers for local communitites. What I’ve found is that it’s hard to find articles that are not produced by the data center industry itself, commissioned by an industry leader (Facebook, Apple, etc.), or compnay press releases. I’m not sure what that means.

I don’t think data centers are bad but I’m not sure what the benefits are for local communities. It’s nice to have something contributing to our tax base without contributing to our population, but how much does a local community really benefit from the land being used that way? I can’t seem to find an answer to that question that doesn’t come from industry sources.

And can’t they be more attractive looking? :-)

 


“We think we are still the best data center market in the world,” said Rizer. “We are not the cheapest, but we still have the best infrastructure. ...” Loudoun County is VERY expensive. When they figure out how and where to place data centers at a cheaper price it will all go bust. “Loudoun County’s economic development department notes that 70 percent of the world’s internet traffic travels through Loudoun County each day.: This is dangerously high percentage. The security jobs at the data centers pay decent although there aren’t many jobs available there.


I love me some data centers.  Whenever my family visits, I (literally)  give them a tour of our great data centers.  I show them how each one prints money for Loudoun County gov’t revenues AND make us more attractive to high tech businesses.  They are tired of the tour by now.

I hear complaints from residents that too much residential growth has forced our tax rates to rise.  But it seems to me that the equalized tax rate will be sufficient to fund our gov’t despite 3.8% student enrollment growth and massive increases in gov’t worker salaries.  The ONLY way that’s possible is if our growth in business development offsets the residential growth.  But how did that happen?

HELLO data centers!!!!


After stacking people on top of each other in Eastern Loudoun for years, the sudden collapsed of the housing market left everyone worried about what to do. 

Answer? Build data centers and apply the same stacking principles to servers!


I don’t LIKE data centers.  They don’t provide many jobs, use a ton of resources, and seem to be specifically designed to be as ugly as possible. 

But in many of the locations the alternative was going to be more mixed use developments and high density housing.  So I’ll just suck it up and deal with the data centers.

I am wondering, since this area is apparently great for data centers, why aren’t they building them anywhere else in the DC Metro?  Are any being built in Prince William or Fairfax?  Maryland?  Seems suspicious to me.


Great news!  Maybe someday, residents of western Loudoun will have broadband Internet access…

Anyone got a long cord?


Sure wish our western Loudoun supervisors could do something about the dismal broadband opportunities in much of the western part of the county. 


Why is Loudoun so excited about data centers?  Data centers represent a minimum of jobs (couple dozen per data center), while occupying a large amount of real estate and require power and cooling infrastructure.  Including AOL and WorldCom from the 90s is not a valid comparison as these companies employed thousands here in Loudoun County, compared to dozens of jobs in the current data center model.  Who cares if Amazon’s or Google’s data goes through our county.  That does nothing to help our county.  Sure we get tax money, but that gets eaten up by the increasing traffic infrastructure that needs to be developed for our drive-through, bedroom county.  What is Mr. Rizer doing to bring jobs to Loudoun county?  The only jobs outside of Sterling are low income service jobs and LCPS jobs.  We have to handle WV and MD traffic driving through our county every morning and afternoon on their way to and from middle income jobs in Fairfax county and DC.  Where are the plans and strategy for mixed use office development?  We have metro coming to Loudoun county whose only use will be for the mass exodus out and through Loudoun county to jobs outside the county.  What are the plans for attracting companies to locate offices and jobs along the metro line?  Who cares about 70% of internet traffic.

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