A two-year legal battle over the fate of a massive data center complex planned in Northern Virginia is headed to the state Supreme Court, with tens of millions of dollars at stake in a project that would redefine the local landscape.
One of the two developers behind the Digital Gateway Project in the Gainesville area of Prince William County said Thursday that it will challenge a Virginia Court of Appeals ruling in March that upheld a lower court decision voiding the project over a procedural technicality before it was approved.
“The Prince William Board of County Supervisors previously approved this project, which would bring critical infrastructure and tens of billions of dollars in investment to the county, including millions of dollars in local annual tax revenue and thousands of high-paying permanent job opportunities,” a spokesperson for QTS Data Centers said in a statement. “We remain committed to the project and being a responsible partner to the Prince William County community.”
The second developer, Compass Datacenters, dropped out of the project Wednesday after Prince William County decided not to appeal the March ruling. But what would be one of the largest data center complexes in the world could still go forward if Virginia’s Supreme Court rules that notices published in local newspapers to inform residents of the vote to rezone the largely rural area complied with local and state laws.
The Digital Gateway Project — a plan to build as many as 37 data centers near the Manassas National Battlefield Park, the historic Civil War site — was approved in 2023 by the Prince William Board of County Supervisors after an often contentious 27-hour-long meeting.
Homeowners near the site had banded together to sell their properties to the two technology companies for several million dollars. Other residents opposed the plan in a section of Prince William already filling with data centers and sued in 2024 over what they argued was a lapse in providing adequate public notice.
In August, Virginia Circuit Court Judge Kimberly A. Irving agreed with the residents who brought the suit, saying the advertised notices provided by the county “did not comply with either the State or County code” that required them to appear in intervals for two consecutive weeks.
QTS and Compass appealed that decision but the Virginia Court of Appeals upheld it on March 30 and gave developers 30 days to decide whether to appeal to the Virginia Supreme Court.
On Wednesday, Compass Datacenters announced it was dropping out of the project and would not pursue an appeal. “While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward,” AJ Byers, the company’s president, said in a statement.
Earlier in April, the county board of supervisors, also named as a defendant, voted to not appeal, as well.
The decision by QTS to appeal the decision angered opponents of the project.
“QTS is clearly fighting a losing battle,” American Battlefield Trust President David Duncan said in a statement Friday. “Judges throughout this Commonwealth, including a unanimous panel at the appellate level, have repeatedly ruled that the rezonings for this monstrosity are illegal.”
Duncan said his organization would continue its fight against the project as the case heads to the Supreme Court.
Some local activists opposed to the project predicted that it would ultimately die.
“QTS and Compass bit off more than they could chew. They didn’t understand the community they were coming into, and this triggered a backlash,” Elena Schlossberg, executive director of the Coalition to Protect Prince William County, said in an interview. “Why QTS would continue this terrible, self-inflicted wound is beyond me. The rule of law is not moving in their favor.”
The uprising by county residents against the planned data center project, Schlossberg said, reflects a growing nationwide revolt against the data center boom.
“This is an industry that has an impact that has never been fully investigated or understood,” she said. “Now people are realizing the risk is not worth the benefit.”
In Virginia, which has one of the largest collections of data centers in the world, pushback has been building.
Just 35 percent of Virginia voters say they would be comfortable with a data center being built in their community, according to a Washington Post-Schar School poll conducted in late March. Three years ago, 69 percent of voters in the commonwealth said they would be comfortable with a data center in their community.
While reliant on the computing capability data centers provide, Americans are increasingly concerned about the drain on energy and the effects the centers have on the environment. Residents who live closer to the centers often complain about the noise they generate and the appearance of the mammoth industrial design sheds that have rapidly dotted the landscape.
Nationwide, 62 percent of Americans say the cost of data centers outweighs the benefits, according to a Marquette Law School poll conducted in January.
Once a largely rural county 30 miles southwest of Washington, Prince William has become increasingly suburban. Many residents who used to live closer to D.C. moved to the county in search of less expensive housing. The population shot up from about 285,000 residents in 2000 to about 500,000 today.
The county has also turned into a hub for data centers, meeting the region’s demand for the buildings over the past 15 years as Northern Virginia developed the world’s largest concentration of data center buildings. Prince William’s 44 completed data center buildings and high real estate assessments generated about $294 million in total tax revenue in tax year 2024, according to the county’s Data Center Industry Tax Revenue Report.
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