Danville hoping to become hub for data centers

City council poised to create special low tax rate for data centers

DANVILLE, Va. – Applause rang out during an announcement in Richmond in 2017 that Facebook will locate a massive data center in Henrico County.

Now, Danville is trying to get in on the action.

Danville Vice Mayor Lee Vogler said the city is poised to have the lowest personal property tax rate in the state for data centers.

"It will be on the work session for the next council meeting, to establish the rate, and then vote on it the following meeting," Vogler explained.

He's hoping for a rate of 25 cents per $100.

That means a company that builds a data center in the city would pay 25 cents for every $100 worth of equipment in the building.

Currently, the rate is $3.50.

"Typically, just the annual tax revenue that we would collect, even with this lower rate that we're looking at, anywhere from $600,000 to over $1 million in tax revenue directly back into the city revenue fund each year," Vogler said.

The rate in Henrico County is 40 cents.

Henrico County Economic Development Authority executive director Gary McLaren said he's not sure if the low tax rate was a deciding factor for Facebook but believes lowering the rate was important.

"Other communities have followed suit after we did that. So I think it makes a difference," McLaren said.

It may not be the most important factor that data centers look at though.

"I don't think it's as important as having sites like we do that are ready to go with infrastructure in place," McLaren said

Vogler said companies have already started reaching out to the city.

"The schoolfield area, the old industrial park there, we think is a great place for data centers to locate. So we're looking to show that off," Vogler said. "Data centers are usually great community partners. They invest in the school system, they do a lot charitable work...so we would love to have data centers here in Danville."

He also believes that geographically, Danville is a perfect spot for data centers.