The Stack Infrastructure project at the Berry Hill megasite, which was expected to bring more than 2,000 jobs to Southside, may not happen if Virginia does away with data center tax exemptions, Secretary of Finance Mark Sickles told the Senate Finance Committee on Tuesday morning.
An affiliate of data center developer Stack Infrastructure plans to buy about 2,099 acres at the Southern Virginia Megasite at Berry Hill in Pittsylvania County. Details about the nature of the project have not yet been revealed.
It could be the largest economic development deal in Southside’s history, with an expected $73 billion in investment and 2,050 jobs over 30 years.
But that might not happen if the state eliminates tax exemptions for data center projects earlier than planned, Sickles said. These exemptions are set to expire in 2035, but a proposal to end them early, in 2027, has caused a heated debate in the General Assembly.
The House and Senate are diametrically opposed on this issue, and their disagreement has held up the General Assembly’s approval of a budget.
Senate Finance Chair Louise Lucas, D-Portsmouth, said in March that she would not send a bill to the governor unless it included language to end the data center tax exemption next year. She has said that data center developments should be paying their fair share.
House leaders insist that the tax exemptions are kept, saying that they are critical to attracting a burgeoning industry to the state and their abolition would hurt Virginia’s relationships with other business sectors.
“With the end of the tax exemption, that project goes away,” Sickles said.
Data centers that meet certain criteria in Virginia, like investing at least $150 million and creating at least 50 jobs, are exempt from paying state retail sales and use tax on computers and other equipment. In economically distressed localities, the criteria are at least $70 million in investment and at least 10 jobs.
Gov. Abigail Spanberger said Tuesday that changing the “landscape” of data center tax exemptions “at the very early stages of a company making a large scale and monument investment … could really negatively impact that particular investment.”
In March, the Danville-Pittsylvania Regional Industrial Facilities Authority unanimously approved a sale of almost all of the remaining available land at the 3,528-acre Berry Hill site to SAC III Acquisition Co., an affiliate of Colorado-based Stack Infrastructure.
A formal announcement about the project has not yet been made, and a draft performance agreement has not yet been signed by local officials.
RIFA chairman Vic Ingram said in March that the board would likely call a special meeting to sign the performance agreement ahead of its next regularly scheduled meeting. That did not happen, and the item was not on the agenda at the board’s regular meeting Monday.
Ingram did not respond to a request for comment on Tuesday.
Del. Eric Phillips, R-Henry County, also did not respond to a request for comment. Neither did a spokesperson for Stack Infrastructure.
The Berry Hill Megasite is jointly owned by Danville and Pittsylvania County, and more than $214 million in public and private funds has been spent on site prep since its acquisition.
The Stack Infrastructure project would be the second at the site, after Tennessee-based Microporous, a lithium-ion battery separator manufacturer, announced a facility there in 2024.
At the time, this was the largest economic development announcement in Southside, initially promising $1.3 billion in investment and the creation of 2,015 jobs. Those figures have since changed to $1.6 billion and a minimum of 1,732 jobs.
“Community leaders have worked so hard to bring [the Stack Infrastructure project] to Southside Virginia,” Spanberger said. “Any endangerment of it would be very, very detrimental to the local economy and the local communities and frankly the investments that they have intended to make with the expected revenue from that project.”
Sen. Creigh Deeds, D-Charlottesville, said he’s not sure if the tax exemptions are critical to making the Berry Hill project happen.
“Does [Sickles] have any basis for that statement?” Deeds said in an interview Tuesday. “Data centers like Virginia, they like the environment, they like the workforce, so I don’t know.”
The tax exemption has “probably been one of the most successful incentives we’ve ever had in Virginia,” Sickles said at the meeting.
“That’s why we oppose such an abrupt change,” he said.
The data center industry contributes about $9 million annually to Virginia’s gross domestic product, he said.
Danville officials are hoping to get in on the economic boost that data centers provide to a locality through tax revenue, Sickles said.
“It’s trying to be copied today in Danville at the Berry Hill site, which we tried to market for years and years,” he said. “They’re very excited about it. With the end of the tax exemption, that project goes away. That’s 2,050 jobs right there in Danville.”