Skip to content
You can now search across every topic, entity and event.What's new
Data Centres: Boom and Backlash
8SEP

Berry Hill approval hinges on tax deal

2 min read
13:06UTC

Danville and Pittsylvania County officials approved an AI data centre at the Berry Hill megasite on 26 May, then attached the consent to Virginia's unresolved tax exemption fight, the first local approval formally conditioned on state fiscal policy.

← Back to Brazil bill ties tax break to a water capJump to analysis ↓
IndustryDeveloping
Key takeaway

Berry Hill's approval now hangs on Richmond's budget vote, the same tax uncertainty that cancelled the Compass sites.

On 26 May, Danville and Pittsylvania County officials approved an AI data centre at the Berry Hill megasite in southern Virginia, then made the approval explicitly contingent on the outcome of the state tax exemption standoff. 1 The vote conditions local consent on a fiscal decision that sits with the legislature, not the planners.

The contingent structure follows the same legislative leverage that the spring zoning fights exposed. Fairfax voted 8-2 for tighter data-centre rules and Sabey withdrew its Seattle request in the same window . Those fights reached projects at the planning stage. Berry Hill cleared its planning hurdle, yet local approval no longer settles the matter: the same tax uncertainty that drove Compass to abandon its Greensville County and Emporia searches now follows projects past the point of local consent.

Lawmakers led by Louise Lucas are pressing to end the abatement by 2026 against a House preference for 2035. Until that resolves, an approved project in Virginia carries an open fiscal question that the county vote cannot close.

Deep Analysis

In plain English

Berry Hill is a large undeveloped industrial site in southern Virginia that straddles the city of Danville and Pittsylvania County. Local officials voted on 26 May to approve an AI data centre there, which would normally mean the developer could start planning construction. But they attached an unusual condition: the approval only holds if Virginia's state government resolves its tax exemption dispute in a way that keeps the incentive alive. If the Senate Finance chair wins and the exemption ends in 2026, the Berry Hill project effectively collapses despite the local yes vote. This is unusual because local planning decisions normally depend only on planning criteria: traffic, noise, land use, and utilities. By tying the vote to a state fiscal outcome, Berry Hill's local officials are acknowledging that no one can build a viable business case for the project without the tax certainty that Richmond has not yet provided.

Deep Analysis
Root Causes

Berry Hill's contingent structure reflects a fundamental mismatch in Virginia's governance architecture: local planning authorities control land use but have no role in the state fiscal policy that determines whether a project is economically viable.

A local yes vote and a state legislative deadlock operate on entirely separate tracks, which the Berry Hill approval has now made explicitly visible by tying them together.

What could happen next?
  • Precedent

    The Berry Hill conditional structure may spread to other Virginia localities facing similar pipeline decisions, effectively pausing new local approvals until Richmond resolves the budget standoff.

  • Risk

    A state fiscal settlement that partially preserves the exemption may leave Berry Hill's conditional approval in legal ambiguity, requiring fresh local votes to activate the consent.

Sources:Cardinal News
Mentions:Virginia Court of Appeals →Seattle →Prince William County →Nevada →Reno →Louise Lucas →Virginia →
First Reported In

Update #4 · Grid wins power to switch off data centres

Cardinal News· 26 May 2026
Read original →
Causes and effects
Caused by
Tax fight kills Virginia projects early
The tax-exemption standoff that drove Compass to cancel its site searches also conditioned the Berry Hill approval, with local officials making their consent contingent on the state fiscal outcome.
Occurred 22 May 2026
Read story →
This Event
Berry Hill approval hinges on tax deal
Local consent is no longer sufficient on its own; the conditional vote shows the tax standoff has reached into project approvals already granted.
Led to
Virginia floats a fee on backup gas
Berry Hill's conditional approval pending tax outcome is part of the same Virginia budget standoff the generator fee attempts to resolve.
Occurred 16 Jun 2026
Read story →
Different Perspectives
NVIDIA
NVIDIA
NVIDIA told the Securities and Exchange Commission on 26 August it had signed memorandums aiming to mobilise over $500bn for buyers' equipment purchases, then said in the same filing the arrangements may not become definitive. It may also carry limited residual-value risk on the equipment itself.
IREN Limited
IREN Limited
IREN signed $2.4bn of financing on 25 August that only releases cash once its Mackenzie GPU servers are accepted, and only through 31 December 2026. A shipping delay from here now creates a funding problem as well as a revenue one.
Energy Commission (Malaysia)
Energy Commission (Malaysia)
Malaysia's Energy Commission recorded data centres at 9.3% of national power in one hot week in August, against a 7% year-to-date average, and is projecting 31% of peninsular demand by 2035. It wants roughly 9 GW of new gas-fired capacity by 2032 to cover the gap.
Economic Development Board and Infocomm Media Development Authority
Economic Development Board and Infocomm Media Development Authority
Singapore's EDB and IMDA rationed 200 MW across four operators on 21 August and followed with a tropical liquid-cooling standard six days later, fixing the terms before construction starts. The agencies will decide within 18 to 24 months whether to run a third call.
Legal Resources Centre
Legal Resources Centre
The Legal Resources Centre put the water and power draw of two approved Cape Town Equinix sites in public, at roughly 4.4 billion litres and 1.4 to 1.5 billion kWh a year, because the city and the operator would not. It wants a cumulative assessment before any more of the five approvals proceed.
Ministerio de Minas e Energia
Ministerio de Minas e Energia
Brazil's energy ministry published Redata's five conditions after the Senate passed PL 278/2026 on 1 September, betting a repeatable annual water test enforces cooling design better than a one-off approval. Redata now needs President Lula's signature before any of it takes effect.