Fredericksburg, VA's $8.4 Billion 600MW Data Center to Deliver $50M in Annual Tax Revenue

A developer is advancing a multi-billion-dollar bid to reshape Fredericksburg’s economic base with one of the region’s largest data-center campuses, promising a powerful revenue jolt while navigating deep regulatory scrutiny.

1500 Gateway Venture LLC is seeking to rezone roughly 83.6 acres between Cowan Boulevard and Plank Road (Route 3) near I-95 from medical-center use to General Industrial, clearing the way for up to 2.1 million square feet of data-center capacity. The land, owned by Hylton Venture LLC, anchors a proposed $8.4 billion build-out—split between nearly $5 billion in equipment and $3.4 billion in construction and fixed infrastructure.

For Fredericksburg, the fiscal calculus is compelling. Despite a lean operational workforce—228 full-time positions once built out by 2032—the campus is expected to deliver $3 million in new tax revenue before operations begin, surging to $56.6 million by 2032 and leveling off at roughly $50 million annually from 2038 onward. Construction activity between 2028 and 2031 could support 1,090 to 2,256 jobs, softening the impact of a modest long-term headcount.

But the upside is paired with regulatory complexity. With an estimated 600-megawatt power demand, the project hinges on a dedicated substation and new high-voltage transmission lines—routing that must clear the Virginia State Corporation Commission beginning in 2026. The developer is backing a Cowan Boulevard alignment to avoid environmentally sensitive areas and city-owned school and park property.

To blunt environmental pushback, the applicant has agreed to rely on non-potable reuse water for cooling, using potable water only as a temporary bridge for up to 24 months. Land Bays A, B, and H could be conveyed to the city for preservation, safeguarding natural assets such as the Smith Run corridor.

The developer is also offering a slate of local commitments: a four-lane extension of Gateway Boulevard with bike and pedestrian facilities prior to initial occupancy, and a $200,000 contribution to the city’s Career and Technical Education program. Building heights would range up to 90 feet for three structures, with the facility closest to Gateway Boulevard capped at 50 feet. Traffic impacts are expected to fall sharply—about 80% lower than the mixed-use residential project previously proposed for the same site.

For Fredericksburg, the proposal presents a familiar tradeoff now playing out across fast-growing data-center markets: a torrent of long-term tax revenue against the backdrop of rising power demand, community unease, and a regulatory system struggling to keep pace with industrial-scale digital infrastructure.