Staunton Crossing – Looking askance

Staunton Crossing dissonance

(Reading time: 4 minutes)

When it comes to its plans for Staunton Crossing, the city is being less than forthright. Coy, even.

Making this evident was session six of Staunton Citizen University, held last week and focused on all things economic. That, of course, meant paying special attention to Staunton Crossing, the hugely ambitious but largely vacant crown jewel in the city’s efforts to gin up economic development. With its roots dating back to 2009, when the Staunton Economic Development Authority (EDA) shelled out $15 million in a land swap with Western State Hospital, Staunton Crossing now represents an investment of roughly twice that amount. The number of jobs attributed to Staunton Crossing over the past 16 years? Perhaps 200—and some unknown number of those aren’t new to Staunton, since they merely involved a move from one city location to another.

At its best, then, the money sunk into Staunton Crossing currently works out to a per-job cost of approximately $150,000. That’s hardly a bargain, and even less so considering that most of those jobs are on the low end of the wage scale: desk clerks and housekeepers at two hotels, food servers and salesclerks at a handful of fast-food franchises and retail outlets. But to be fair, the Crossing still has another 275 empty acres just waiting for someone to move in. And city officials say that could mean more than 3,000 additional jobs coming to Staunton, resulting in an enormous shift in any cost-benefit analysis, so perhaps it’s still early days when it comes to doing the math.

But that’s where the coyness comes in. What new businesses is the city trying to recruit, and at what additional cost?

Among the six types of industries advertised on Staunton Crossing’s internet pitch is “logistics and transportation,” which sounds an awful lot like a warehouse distribution center. That’s low-hanging fruit, one might imagine, given the Crossing’s touted “easy access to the East Coast and Midwest” because of interstate and railroad proximity. But apparently it’s also forbidden fruit, at least for now. Asked when a large tenant for the Crossing might be recruited, economic development director Amanda DiMeo responded that a warehouse operation could have been landed “yesterday” if that’s all the city was after. Clearly, there’s hope that there are bigger fish to fry.

Which brings us to the second questionable industry on the Crossing wish list: Data Centers & IT. When it comes to recruiting this latest “must have” industry, the EDA marketing push goes all out in playing the environmental hazards card without any apparent irony. Staunton Crossing, declares its website, “is a prime location for data centers due to its low risk of natural disasters. The area is not prone to earthquakes, hurricanes, or severe weather events, which can disrupt data center operations. This provides peace of mind to organizations that rely on the secure and continuous operation of their data centers.”

And that’s not all! Staunton Crossing has an irresistible supply of low-cost and reliable electrical service, according to its website. It has state-of-the-art fiber internet infrastructure. It has “a large pool of highly educated and experienced IT professionals,” which might be expected to raise quizzical eyebrows among the relatively sparse IT workforce currently in the city. But notably lacking in this recitation of virtues is any mention of the copious amounts of water that data centers require, although the website does give assurances elsewhere that the city can provide 2 million gallons a day.

And that’s a problem.

Two million gallons a day represents the entire output of one of the city’s two major water sources, drawn from the headwaters of the North River in the George Washington National Forest. The possibility of such an outsized claim on a critical natural resource, in an age of global warming and greater weather instability, including droughts, has not gone down well with community residents with a less boosterish outlook. There have been rumbles of discontent—which may explain a curious comment about the matter by Rodney Rhodes, the city’s director of community development.

Speaking immediately following DiMeo’s presentation, Rhodes led off with the observation that Staunton’s zoning ordinance does not permit data centers. Any attempt to bring in such a center therefore would require that the zoning code be amended—and that, he assured the class, would be “a hard slog.” Not impossible, of course. But hard, so nothing to get excited about.

Nothing to see here!

And yet, why would Staunton keep chasing after a substantial capital investment that its own rules do not permit? Does the question answer itself? A substantial capital investment of the sort represented by a data center wouldn’t provide much in terms of permanent employment, but it would add handsomely to the tax base. And given the many millions already spent on the Crossing with remarkably little return to date, the promise of a big chunk of tax revenue might be expected to transform a hard slog into a greased done-deal.

As I said: coy.

Let’s not send water into the cloud

(Reading time: 7 minutes)

Sometimes it’s hard to grasp just how quickly the world is changing, and how slow we can be in adjusting. Perhaps that’s not a big deal on a personal level. Tell people you don’t use a cell phone or go on social media and they’ll just think you’re quirky, or old. But being out of step becomes a really huge deal when it involves spending millions of dollars and making decisions that will have a ripple effect for decades.

Case in point: that ambitious effort to attract investment dollars, currently marked by a towering column just 350 feet off I-81, known as Staunton Crossing. By this time next summer the concrete pillar will be crowned by a ginormous billboard advertising the city, painted onto a 1-million-gallon water storage tank that will be 70 feet in diameter and, at its top, 240 feet above the ridge on which it sits. A critical structural failure would make one helluva splash on the highway below.

The aesthetics of such boosterism come down to a matter of taste and judgment, but there should be less subjectivity regarding the water tank itself, which together with its ancillary plumbing carries a hefty $10 million price tag. Who knew a cistern in the sky could be so expensive? For context, $10 million is enough to replace approximately one-fourth of the 13 miles of pipeline that supply Staunton with its drinking water—including, ironically, the water that will fill the new tank. Replacing the pipeline is becoming a critical issue because it’s more than a century old, but where the city will obtain $41.5 million to do the job, or an additional $8 million to drill backup wells, is anybody’s guess.

Meanwhile, although there are plausible reasons to build a new water storage tank on the east end of the city, the primary impetus for this massive venture is Staunton Crossing itself. And, more specifically, a desire by city officials to include a so-called “data center” on its freshly primed real estate. Why the scare quotes around “data centers”? Because the label, while conveying a cutting-edge sense of cleanliness and efficiency, obscures the fact that these contemporary data factories are voracious consumers of power and water, more accurately described as resource vampires.

Offices and manufacturing plants—the development’s other proposed tenants—also need water and electricity, of course, but data centers really need them. The master plan for Staunton Crossing calls for 375,000 square feet of data center space, projected to require 187,500 gallons of water a day. That compares to more than twice as much proposed square footage for manufacturing, which would require only 12% more water—or a proposed 605,000 square feet of office space, using a mere 60,000 gallons a day. (Moreover, most of the data center water evaporates, which means less is available for recycling—good for the sewer system, but not so good for water conservation.)

The planners who conceived this project knew all that, of course, which is why their top infrastructure priority was water. “Prospects need to know that pressure and capacity are adequate for their needs,” they wrote. “Nothing else matters more than water, particularly in the area of manufacturing and data center pursuits.” Ergo, the water tower, enabling the city to assure business prospects that it can deliver 2 million gallons a day, as well as 4.2 megawatts of power.

But that was six years ago, and as noted at the top of this column, the world is moving ever more quickly. What seemed like a reasonable concept in 2019 has become increasingly outdated, as computer users from the smallest to the largest increasingly turn to “the cloud”—an ethereal marketing term for data centers—for their data storage needs. More recently, the post-Covid ascendance of energy-hungry artificial intelligence (AI) has blown up all previous forecasts of national power consumption.

Based on their projections for Staunton Crossing, the planners were envisioning a 10-megawatt data center, which at that time was an average size for the centers that were sprouting up in northern Virginia. But the reason why Ashburn, for example, today has 133 data centers is because these smaller centers need to cluster around a high-speed network infrastructure to reduce latency, a critical aspect of a seemingly seamless “cloud.” On this side of the Blue Ridge, on the other hand, we still have areas without decent internet service, never mind the kind of fiber connections that would enable cloud computing.

AI’s massive energy needs, meanwhile, require hyperscale centers measured in the hundreds of megawatts. One such center currently in development in Culpeper, for example, will have 1.4 million square feet providing initial support for 216 megawatts of critical load, eventually expandable to 432 megawatts. That’s clearly a whole new ball game, in which Staunton Crossing can’t compete.

These limitations suggest that the Crossing’s quixotic pursuit of a data center won’t get out of the starting gate, too small for a hyperscale center but too isolated to plug into the cloud network. Indeed, it’s worth noting that while much of the marketing strategy behind Staunton Crossing has been to emphasize its proximity to two interstate highways, a railroad and Virginia’s inland port in Winchester, absolutely none of it addresses virtual connectivity. So: nothing to worry about, right? Unless, of course, it’s to fret about the time and money wasted on ill-fated marketing efforts, or on building a possibly over-engineered water tank.

Still, there’s always the danger that these sorts of projects take on a life of their own, lurching onward long after someone should have cut off their heads. And putting a data center in Staunton, while of debatable value in 2019, makes even less sense today. Although we’ve had a relatively wet spring and early summer, Staunton had repeated drought warnings and advisories the previous several years, underscoring the city’s vulnerability to water shortages in an age of ever more extreme climate change. Meanwhile, the 4.2-megawatts of electricity that Staunton Crossing currently promises won’t begin to address the energy needs of a data center (or a serious manufacturing plant, for that matter), which means Dominion Power will be expected to build a new transmission line—with construction costs distributed among current users.

What would Staunton get in return? Once a data center is up and running, relatively little. Local employment, as measured by vehicle trips per day, would be a scant 375, as laid out in the master plan—compared to more than 5,000 a day for a manufacturing plant, and 6,400 to 11,000 a day for office workers. More vehicle trips, more local employment. The other potentially significant upside could be the tax revenue generated by such a capital-intensive project, were it not for the fact that taxing data centers has become a race to the bottom. Or as Staunton Crossing’s planners advised the city, slashing taxes for data centers would signal the industry “that it is specifically desired in Staunton.” Maybe that’s a signal we shouldn’t want to send.

At the very least, it would be prudent for the city to revisit the Staunton Crossing master plan and determine if changing circumstances have rendered some of it obsolete. Ditch the idea of having a data center. Perhaps revisit the idea of incorporating housing into the plan, a concept that was part of the original planning but then inexplicably dropped, and one that subsequently has become more urgent. Safeguard a precarious water supply.

We’d still be left with one of the state’s biggest billboards, so it won’t have been a total loss. (Sorry, Lady Bird.)

We have to know what we don’t know

(Reading time: 8 minutes)

One of the underlying issues pervading all aspects of the affordable housing discussion we’ve been having locally is the lack of reliable, timely data. There’s a lot we don’t know, and much of what we think we know is flawed.

There is, for example, the recently released regional housing study, which not only lacks a lot of needed information but is burdened by a significant load of outdated and incomplete statistics. The problem this poses is a false sense of authority. Statistics just look so damn definitive. They’re precise and official looking, and they do such a nice job of reducing complexity into the numeric equivalent of a soundbite that it’s hard to put them aside. They brook no argument—even when they send you off on a wild goose chase.

But the regional housing study is far from unique. A couple of more recent pronouncements about the housing situation illustrate how apparently authoritative sources can paint a picture that on closer examination is at least questionable. Yet because such statements fit so well into a broader understanding of our circumstances, they get adopted and repeated and eventually blend into the background narrative without a challenge. They become accepted wisdom, shutting down further discussion.

Consider, for instance, the question of how much government regulations add to the price of a newly built home. Developers may have to pay for environmental impact or traffic studies, as well as zoning, impact, utility hook-up and other fees, and have the additional costs of complying with OSHA regs and specific design standards. Builders must comply with building codes and architectural design standards, as well as foot the bill for permit or inspection fees. Could relaxing or amending some of this regulatory burden allow for cheaper housing to be built?

To ask the question is to answer it: of course it would. What that doesn’t tell us is how much of a cost-saving is possible, and whether that reduction would be significant enough to prompt the construction of more affordable housing. Are regulatory costs so high that they are a major disincentive for more housing development? Or are they relatively minor, in the overall scheme of things, and therefore unlikely to produce more than marginal gains if cut back, possibly at the price of lower quality?

We don’t actually know. All the meetings and conversations locally about “solving” the housing shortage have been remarkably unbalanced, in the sense that the people sitting around the table overwhelmingly are from the demand side of the housing equation. The supply side—developers, builders, lenders, underwriters, property managers—has been remarkably rare.

So when attendees at a recent SAW housing group meeting heard that $92,000 of a new home’s price tag is attributable to regulatory costs, it might have seemed that a significant information void had been filled. Moreover, given that this statistic was generated by the National Association of Home Builders (NAHB), it certainly sounded authoritative. And the implications are seemingly huge: with a new home in the SAW region going on the market for upwards of $326,000, as much as 28% of a new home’s selling price might be trimmed solely by government fiddling with the various requirements it imposes on builders and developers.

A closer look at that NAHB calculation, however, suggests otherwise. The actual regulatory cost calculated by the association was $93,870, of which it attributed $41,330 to developer’s regulatory costs and $52,540 to regulation during construction. The study was conducted four years ago. The developers’ costs were based on a survey sent nationwide to 2,071 NAHB members—with a scant 57 providing “complete and useable responses.” The association provides no information about which markets were represented in the responses, nor how widely they were distributed. The $41,330 number, in other words, is a wild-ass guess that has little to no relevance to the SAW region in 2025, despite its apparent precision.

Meanwhile, the survey based its conclusions about builders’ costs on 280 “complete and useable responses,” which sounds better than the developers’ stats but with no indication of whether this was a higher rate of return, since the NAHB doesn’t say how many builders were polled. And, again, the study provides no information about which markets were represented or what kinds of homes the builders were erecting. Nearly half of the increased costs those builders attributed to regulations were due to “changes to building codes over the past 10 years,” so there’s no applicability to localities with few or no changes to their building codes over that period. In addition, a substantial chunk of increased regulatory costs was attributed to “architectural design standards motivated by aesthetics, or possibly even, in some cases, a desire to price less affluent residents out of particular neighborhoods.” Is that relevant to the SAW region?

In short, the applicability of this extremely limited “study” to any particular housing market is less than zero— “less than” because using a misleading statistic can create a false sense of comprehension. But with the NAHB distilling a complex issue into a seemingly authoritative data point, there’s the temptation to think there’s no need to research the issue any further. The regulatory cost burden on new housing construction? Asked and answered.

A different kind of false certainty based on an apparently authoritative source was seen at the Staunton city council’s March 13 work session, at which the planning staff was asked what role developers play in terms of the city’s housing strategy. As just indicated, an accurate answer would have been “little to none.” The staff response, however, was to assert that “most of the land for larger developments has already been purchased, so they are looking at more of the low hanging fruit of the single lots and other smaller cottage-type developments.”

That answer not only was unresponsive, but highly questionable. Even a cursory look at a map of Staunton will disclose an abundance of undeveloped and open land, especially in the city’s northern reaches. The city’s 2018 comprehensive plan, currently being updated, noted that of Staunton’s 12,800 acres, nearly 3,000 acres was vacant land zoned for residential use. Some of that land undoubtedly has been developed in the past seven years, and a significant chunk of it is undevelopable because of steep terrain or flooding hazards, but even with that there’s clearly a lot of room within city limits for more housing.

But land availability isn’t subject merely to physical constraints. Land use ultimately is subject to political choices, notably over zoning. Those 3,000 vacant acres are apportioned among four zoning classifications, with the lowest-density classification claiming nearly a third of the total. Medium-density zoning, meanwhile, had 415 vacant acres, while high-density zoning weighed in with 325.8 vacant acres—all more than enough, one would presume, for at least some significant housing developments. But if that’s not enough, how much more housing could be built through upzoning? Is that something that should be at least examined, without a prior dismissal of the possibility?

Other political choices are reflected in the city’s decision to set aside considerable acreage for an ag-forestal district, “intended to support the growth of active farm, forestal, nursey and related enterprise.” Given Staunton’s location within a heavily agricultural county, it’s not unreasonable to ask whether preserving still more farmland within the city’s boundaries is the most appropriate use of such property, especially if doing so penalizes development of sufficient affordable housing. How many hundreds of acres of the ag-forestal district could be carved out for other uses while still preserving its most attractive natural features, such as the Bells Lane corridor?

Then there are the decisions that went into designing Staunton Crossing, the city’s premier economic development effort. Early on, planners for the project contemplated housing as part of its development mix, presumably in recognition of the need for new businesses to have adequate housing for their employees. But then, for reasons never made explicit, the housing idea got dropped, even as plans for an AI data center shrugged aside criticism that such centers provide only modest employment gains—the ostensible rationale for building Staunton Crossing in the first place. Meanwhile, in the seven or so years since those choices were made, new data centers have grown exponentially in size and become omnivorous consumers of water and electricity, raising the question of how well suited such an industrial application is for a region that has had frequent drought scares. Should that part of the project be reexamined to assess its suitability for housing?

None of this is to say that the city should be upzoning any particular area, that the ag-forestal district should be trimmed or rezoned entirely, or that Staunton Crossing should stop trying to recruit data center providers. But it does point to the fact that these and other land-use decisions are inherently political, made at a specific time for reasons that may change or become obsolete, and that new priorities—such as the growing need for affordable housing—may take on greater importance. To dismiss a question about new housing developments by saying, in effect, that there’s no room for big projects is therefore untrue. It also is needlessly self-limiting, forestalling fresh thinking that could open new possibilities.