Virginia Court Voids World's Largest Planned Data Center
Key insights
- Prince William County's 37-center Digital Gateway, up to 27 million square feet on 2,000 acres, was voided after the county failed to properly confirm a public hearing notice.
- Google's Project Raspberry draws up to 8 million gallons of water daily from Carvins Cove, drinking source for 98,000 Roanoke residents, approved without public hearings.
- Virginia's data center sales tax exemption is projected to cost nearly $2 billion in FY 2025; nearly 70% of registered voters want it ended.
Why this matters
The Digital Gateway ruling proves that data center developers' reliance on permissive local governments is now a genuine legal liability: a missed Washington Post confirmation email just killed what would have been the world's largest planned data center campus. Google's Project Raspberry case, where The Roanoke Rambler had to sue under Virginia's Freedom of Information Act to obtain water usage numbers the water authority was shielding behind an NDA with Google, establishes precedent that public utilities cannot contractually suppress data about a shared public resource. With Virginia's Senate seeking to redirect nearly $1.6 billion in exemption savings to education by 2027, and Washington state already eliminating its data center sales tax exemption effective July 1, the fiscal and legal environment for AI infrastructure buildouts is tightening on multiple fronts simultaneously.
Summary
Prince William County's Digital Gateway, 37 data centers and 27 million square feet on 2,000 acres, was voided because the county failed to confirm a public hearing notice with The Washington Post. Circuit Court Judge Kimberly Irving ruled the requirements weren't met; the board spent $1.7 million defending it, then voted unanimously to drop the case on April 14.
Essentially: (QTS, Compass Datacenters) bet procedural shortcuts wouldn't matter at this scale. They did.
- Google's Project Raspberry draws up to 8 million gallons of water daily from Carvins Cove in Botetourt County, the drinking source for 98,000 Roanoke residents, with no public hearings held.
- Virginia's data center sales tax exemption is projected to cost nearly $2 billion in FY 2025; a March Washington Post poll found nearly 70% of voters want it ended.
Potential risks and opportunities
Risks
- QTS pressing ahead with a Virginia Supreme Court appeal keeps 2,000 acres of Prince William County in legal limbo and could force county officials to spend beyond the $1.7 million already exhausted on the case.
- Google's Project Raspberry faces a Section 404 Clean Water Act review by the Army Corps of Engineers while Botetourt County is under a severe drought advisory as of late April, creating a pathway for water restrictions before the facility is complete.
- If Virginia eliminates the sales tax exemption by 2027, Meta, Microsoft, Google, Amazon, and Oracle, all active in the state, face significant cost increases on equipment replacement cycles that developers have relied on as a subsidy backstop.
Opportunities
- Virginia Education Association and Senate Finance Chair Louise Lucas are positioned to redirect nearly $1.6 billion in recovered exemption savings to public schools if the exemption is eliminated by 2027.
- The Roanoke Rambler's FOIA court victory over Google's NDA-protected water usage data creates a replicable legal template that transparency groups in other states can use to force data center water disclosures.
- Washington state's July 1 elimination of its data center sales tax exemption, projected to raise $63 million over two years, gives other states a tested fiscal model to follow; Texas is already exploring similar moves.
What we don't know yet
- Whether QTS has formally filed its Virginia Supreme Court appeal and on what timeline, given Compass Datacenters has already withdrawn from the case.
- What the Army Corps of Engineers' Section 404 Clean Water Act review will surface on Project Raspberry's wetland and endangered species impacts, given the public comment period closed in early April.
- Whether Virginia's special legislative session will reach a budget deal before the state runs out of money at end of June, and whether the final exemption terms will match the Senate's $1.6 billion target.
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Originally reported by prospect.org
Read the original article →Original headline: American Prospect: Virginia Court Battle Derails World's Largest Planned Data Center Campus as Google's Project Raspberry Draws 8M Gallons Daily From a Public Water Supply