HAMPTON —  City Council is leaving the door open for future data center development after hiring a consulting firm to help develop zoning policy to potentially accommodate them. But city leaders are trying to make one thing clear.

“I don’t think we’re there yet,” Mayor Jimmy Gray said.

Data centers are physical facilities that house computers, servers and other networking equipment to process and distribute data. Demand has heightened in recent years due to the rapid growth of cloud computing and artificial intelligence, and Northern Virginia has been the epicenter of their expansion.

Hampton hired consulting firm Southeastern Institute of Research on a $52,000 contract earlier this year to act as the city’s consultant to help develop zoning policy around data centers. This comes roughly three months after the council toured two data center facilities in Prince William County. Currently, Hampton’s zoning code doesn’t address data centers, meaning it includes no prohibitions on them. According to City Manager Mary Bunting, the city has not received any proposals to develop one.

However, she said at a Wednesday council meeting the city needs to do its homework now to develop clear guidelines to prevent future data centers from being able to advocate for a favorable deal later at the expense of the community.

“It’s really essential that we look at this proactively, so that we don’t end up behind the eight ball,” Bunting said.

The research firm’s Senior Director Ried Watkins acknowledged a state study that found unconstrained energy demand, largely from data centers, could drive up Virginia’s energy usage 183% by 2040 — in turn driving up customers’ monthly power bills. With no new data centers, energy use would only grow 15%. He also said they’re “a hot topic” with nearly three-quarters of Americans opposing data centers in their communities and voicing concerns over noise pollution and water consumption.

However, Watkins minimized any potential harmful impacts of smaller-scale data centers, which is likely the only size the city has space to entertain. He also emphasized demand for increased electronic bandwidth from local business executives and highlighted financial incentives as benefits for localities that host them.

“A blanket ‘no’ to all data centers would limit businesses and organizations ability to evolve with technology,” Watkins said. “That would cut across many, many industries.”

Data centers can drastically vary in size and scale. Smaller enterprise facilities, like in Hanover County and Virginia Beach, are 10,000-100,000-square-foot facilities that use up to 10 megawatts of power and consume up to 10 million gallons of water per year. Larger hyperscale facilities, like those in Henrico County, require 10 times that power and can consume between 190 million and 530 million gallons of water per year.

Virginia has become ground zero for data centers in recent years, with Northern Virginia home to hundreds and more than two-thirds of the world’s internet traffic. The Southeastern Institute of Research is the same firm that pitched data centers to Newport News in December, where the firm hoped to extend that digital infrastructure down Interstate 95 and east to Hampton Roads.

Watkins said Newport News is also working to figure out their approach to data centers, and the Peninsula needs to create a unilateral approach to determine whether its open to becoming Virginia’s next data center branch.

“Whatever we come up with for recommendations and policy for the city of Hampton, it needs to talk, or at least coordinate with what’s going on over in Newport News,” Watkins said. “Developers and businesses will look at you all as a market, not two individual localities.”

While one person voiced support for the opportunity to bolster the local economy, two other residents said they aren’t buying what data centers are selling, and believe they are adjusting their pitch to become more friendly to localities.
After Wednesday’s meeting, Gray said the city has options to pursue data centers in the future and he could support one being developed if the right project was proposed. However, he said the right proposal is dependent on the policy the city develops and the impacts any project would have on residents.

“We haven’t closed the door on it, but we’re not saying yes yet until we fully understand how it works for Hampton and how it should fit within our zone and what impacts it has on neighborhoods,” Gray said. “We’re still learning.”

The city will host at least one community roundtable as it researches and develops its zoning policy before presenting a policy proposal in the fall.

Devlin Epding, 757-510-4037, devlin.epding@virginiamedia.com