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What’s going on with Staunton Crossing?
Fifteen years and tens of millions of dollars after it was first conceived, the 300-acre industrial park at the corner of I-80 and U.S. 250 has finally achieved Tier 4 status, which signifies it is ready to do business. Which raises the question: what now?
What kinds of businesses should be recruited for Staunton Crossing, and how will the city measure the project’s overall success? Should Staunton put more emphasis on job creation—or on increasing its tax base? How much disruption to its infrastructure and social fabric can the city tolerate, and what’s a fair trade-off for the jobs and tax dollars that result?
These and other issues were raised last week at a regular city council meeting in a rapid-fire presentation by Tim Davey, a professional engineer and director of economic development for the Timmons Group, which had created Staunton Crossing’s master plan by late 2018. “In the marketing world, six years is a long time,” he conceded Thursday, explaining why the plan should be updated. Seven-plus years is an even longer time, but Davey was not one to get bogged down in details, rushing through his remarks as if by doing so he could somehow turn back the clock. Along the way, he managed to toss a couple of hand grenades.
The most obvious casualty of time’s passage has been the master plan’s inclusion of a data center, an industry that was all the rage last decade but which has since lost much of its luster, and which dominated much of last week’s discussion. Just how much of a data center was being contemplated in 2018 is hard to tell from the documents produced at the time. Maps of the site allocated 831,250 square feet to a data center that Timmons projected would be built in the fifth year—which is to say, before now. Elsewhere, however, in a chart that includes water and sewer consumption, the data center was inexplicably reduced to 375,000 square feet, shrinking its hefty water needs below those of a light manufacturing plant. And water, as the master plan noted, is key: “Nothing else matters more than water.”
The intervening years have had other implications for the master plan, which includes a modest level of retail but a significant amount of office space among its target end-users—two categories, as pointed out by Mayor Michele Edwards, that have seen significant post-Covid shifts in demand. Such changes, in turn, affect bottom-line calculations about how many jobs and how many tax dollars Staunton Crossing might generate. Office space, for example, requires relatively little taxable capital investment but generates a lot of jobs when compared with light manufacturing, which requires more taxable spending on equipment and facilities but hires fewer people. Back when the master plan was first assembled, the outlook was for “3,000 quality jobs,” apparently considered a sufficiently high return on the many millions of state tax dollars lavished on the site in the name of job creation. But whether that’s still in the cards remains to be seen.
Data centers completely flip the calculus. Once such a center is built, typically by a transient workforce, its employee headcount is measured in dozens rather than hundreds. A data center’s potential boost to the city’s tax base, on the other hand, is enormous, thanks to its capital-intensive nature. In one sense, then, Staunton’s financial interests are at cross-purposes with Virginia’s, since state-funded land development allocated to a data center essentially transfers state capital to the city’s coffers—a nice offset for Staunton taxpayers, if not so great for the Staunton workforce.
A questionable transfer of tax dollars aside, data centers over the past decade have evolved in public perception from a relatively benign, low-impact and “clean” form of industry into power-guzzling, water-sucking vampires that can be noisy neighbors and a threat to local air quality, thanks to their reliance on diesel- and gas-fired emergency generators. With residential electricity rates climbing and water scarcity exacerbated by such developments, progressive Democrats are pushing a national moratorium on the construction of data centers nationally. A growing number of municipalities are following suit on a local level.
Despite all that, however, Tim Davey clearly believes that data centers should stay in the mix for Staunton Crossing—and not just a data center, but possibly an on-site electric plant to supply its energy needs, up to and including a “small” nuclear reactor.* Data centers and their associated energy sources are “things that people are asking about, and I’m not advocating for it, I’m just telling you that it’s just one of those things that people are asking about and you need to have an answer for that,” he counseled.
City councillor Corrie Park pushed back on such assertions, citing all the drawbacks associated with data centers and the resistance she has encountered from city residents on the subject. It would be “inefficient of us” to pursue a data center at this time because Staunton residents “won’t go for it,” she contended, a waste of time better spent going after more acceptable land uses. Davey, on the other hand, wasn’t having any of it, suggesting various work-arounds for some of the objections, offering for example that some data centers are using closed-loop cooling systems to reduce water consumption. And, of course, there was that whole nuke thing to avoid distorting local energy costs.
But the bottom line for Davey seemed to be . . . the bottom line. The Virginia boom in data centers will have run its course in another five years, he predicted, so it would be in Staunton’s best interests not to miss the gravy train. “I pose the question to my clients, do you want to be the only jurisdiction in Virginia without one, and the tax revenue that could come from it?” he asked the city council, leaning into fear-of-missing-out anxieties. “If the answer is yes, then that’s great—but the tax revenue is pretty impressive.”
What happens next is not clear. Davey’s presentation ended with several recommendations, starting with development of “a diverse, internal marketing team” and creation of “a target marketing portfolio,” which presumably would revisit the kinds of industries the city would try to recruit for Staunton Crossing. Yet the overall package smacks of a rush job staffed by insiders. There is no suggestion that public input would be sought—even for so weighty a subject as the desirability of having a “small nuke” within city limits—and the whole business plan refresh could be done within just 90 days, Davey assured the council.
Doubts about data centers aside, other questions about Staunton Crossing abound. For example, a key question raised by Davey on behalf of Staunton Crossing prospects is, “Where will my employees live?” To that, Davey replied, “I believe you guys are in a very good, healthy position to answer that,” which may come as news to the recently created Staunton Housing Commission and various local groups grappling with the inadequate supply of affordable housing—and all the more so if Staunton Crossing delivers on its promise of 3,000 new jobs. That’s a lot of fresh housing demand!
It’s also worth noting that whatever goes into Staunton Crossing, whether light manufacturing plants or a data center or both, will put additional demands on a water and sewer infrastructure that is already under stress. It’s ironic, therefore, that Davey’s presentation was immediately followed by a request to increase utility rates by 5% to 7% to pay for long overdue water and sewer improvements and maintenance. The increased amount, everyone agreed, will raise only a fraction of what’s actually needed.
There were no comments made at the public hearing on the rate increase, which was then approved.
*Once you’ve picked your jaw up off the floor and want to get the full context of the casual reference to nuclear reactors, you can find Davey’s comments here, starting at around the 54-minute mark. It should go without saying that any onsite power plant, nuclear or otherwise, would need additional coolant water.
Looking askance 