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November 12, 2015

$200-million data center planned near Warrenton

Photo/Google Earth
Vadata will employ 51 managers and technicians at the Warrenton Training Center.
We like the jobs. We like the tax base. We like the fact that it won’t do anything to increase traffic.
— Miles Friedman, county economic development director
Data Center
• Where: Warrenton Training Center, 7471 Bear Wallow Road

• Owner: Vadata Inc.

• Investment: Estimated $200 million

• Payroll: $4.33 million with 51 jobs by completion in 2018.

• Average salary: $85,000.

• Client: Federal government

• Tax incentives: $2.7 million from county over next three years.

• Annual taxes: About $1.5 million annually to county.
By .(JavaScript must be enabled to view this email address)
The biggest economic development project in Fauquier history drew virtually no public comment from the board of supervisors Thursday.

The board unanimously agreed to provide an unprecedented $2.7 million in tax breaks to Vadata Inc. over the next three years.

The Seattle-based company will invest an estimated $200 million to build a data center at the Warrenton Training Center, a high-security federal installation on View Tree Mountain, just north of town.

Vadata has operated for two years at the training center and already has invested $26.4 million there, according to its application for Fauquier County’s business incentive program.

The company will create 51 jobs at average salaries of $85,000, the application says. By completion of the data center in 2018, the annual payroll will hit $4.3 million.

Anticipated equipment investments could reach $37.8 million in 2017 and $79.1 million in 2018, according to Vadata’s application.

The county redacted information about the planned building’s cost.

“As far as we know, their only client is the federal government,” county Economic Development Director Miles Friedman said.

“It’s big,” Supervisor Chris Granger (Center District) said during an interview Thursday afternoon. “You’re basically looking at $1.5 million a year” in new tax revenue, starting in fiscal 2019.

But, because of Vadata’s secrecy demands and the Warrenton Training Center’s secure nature, county officials conducted a very strange, very brief, public discussion of the incentive package Thursday morning.

Typically, announcement of such a big project would prompt fanfare and adjective-laced speeches.

But, the supervisors agreed to intense secrecy earlier this year as negotiations with Vadata intensified.

The county provided a copy of Vadata’s tax break application that blacks out the company address, along with the names and titles of company officers. And, county officials said no Vadata representative would discuss the project.

The application, dated Feb. 11, 2014, calls it “Project Sunrise” at 7471 Bear Wallow Road, Warrenton.

The company has a Delaware charter dating to July 2, 1999, according to its application.

The Virginia Economic Development Partnership helped steer the data center expansion project to Fauquier about a year and a half ago, Mr. Friedman said.

“We’re not striving to be Loudoun County” as a major data center hub, he added. “If it’s a business that makes sense for us, we’ll do everything we can to recruit them.

“We like the jobs. We like the tax base. We like the fact that it won’t do anything to increase traffic. It’s not a polluter,” Mr. Friedman said of the planned data center.

The county has no control over what gets built on the federal land.

But, Fauquier will tax the planned, privately-owned building and the equipment Vadata installs, according to Commissioner of Revenue Ross D’Urso.

The incentive package, approved under the county’s Technology Zone ordinance, will include tax rebates of:

• $117,540 this year, fiscal 2016.

• $709,320 in fiscal 2017.

• $1.87 million in fiscal 2018.

Vadata essentially will pay no business equipment or machinery and tools levies those three years.

For 2014 and this year, the company will have paid about $732,000 in Fauquier taxes, according to county officials.

“You look at the level of taxes they’ve already paid,” Mr. Friedman said of the fiscal impact. “It’s gonna relieve some of the burden on citizens and businesses already here.”

The company’s application says it will have 21 “DC (data center) technicians and managers” in Fauquier by the end of this year. It anticipates hiring 16 more in 2016 and seven more each of the next two years.

Landing the deal should help Fauquier compete for more big investments, according to Mr. Friedman.

Workforce development programs, such as a joint effort with Lord Fairfax Community College, could help Fauquier position itself as a logical place for cybersecurity businesses, for example, he suggested.

The data center will dwarf any other single business investment in Fauquier, according to County Administrator Paul McCulla.

When Fauquier Health sold 80-percent interest to Tennessee-base LifePoint Health in October 2013, it became a for-profit enterprise. That added approximately $80 million worth of real estate and equipment to the county tax base.

During discussion of potential electrical transmission line upgrades two years ago, Virginia Dominion Power representatives essentially identified the Warrenton Training Center’s needs a part of the justification.

But, Mr. Friedman said he knows of no connection between the new data center there and continuing state review of transmission line upgrades in the region.

Vadata representatives told him they have everything they need in terms of electricity, connectivity and cooling capacity (typically water) for the new data center. The Town of Warrenton provides water and sewer service to the federal installation.

The board of supervisors two years ago amended Vint Hill’s zoning to make data centers a by-right use. This year, however, that zoning change prompted opposition because the state’s reconsideration of high-voltage lines in that area. The board had moved to remove the data center language from the ordinance.

But, the county has no zoning authority or development oversight on federal land, including the Warrenton Training Center.

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