James City supervisors require special-use review for data centers, direct staff to write policy

James City County’s Board of Supervisors voted 4-1 to amend the county zoning ordinance so that data centers are no longer permitted by right in several industrial and mixed-use districts and instead require a special-use permit in the M-2 (General Industrial) district, while directing staff to develop a comprehensive policy for future reviews.

The change, adopted as ORD-25-0002, removes “data processing centers” from M-1 (Limited Business/Industrial), M-2, MU (Mixed Use) and EO (Economic Opportunity) as by-right uses and adds data centers as a specially permitted use in M-2; the planning commission had recommended excluding the EO district before the board’s vote.

Staff said data centers are large facilities that “store, manage, process digital data,” and that rising demand from artificial intelligence and cloud services has increased local interest. Christie Parish, county planner, told the board staff had proposed defining data centers in the ordinance and limiting where they could locate so the county could require scrutiny of their impacts before approvals.

“Data centers are facilities which store, manage, process digital data,” Parish said during the staff presentation, describing both economic benefits — including capital investment and high-paying technical jobs — and possible negatives such as visual impact, energy and water demand, noise and waste.

The planning commission and policy committee urged a cautious approach. Dr. Almond, speaking for the planning commission, summarized concerns heard at the commission: “There was consensus that best practice criteria are needed to mitigate the adverse effects of data centers in the local area,” and commissioners raised questions about electrical demand on Dominion Energy, water use, noise and decommissioning plans.

At the public hearing, an attorney representing BASF Property argued the county should facilitate data center development on the BASF site, saying the parcel already has high-voltage lines, substations and pipeline infrastructure and urging that “speed to market is absolutely the most essential factor.” The board heard competing perspectives at length before taking action.

Supervisors who supported the ordinance said requiring a special-use permit would allow the county to evaluate site-specific impacts and require mitigation while staff develops a policy with performance standards and siting criteria. One supervisor who voted against the ordinance said the M-2 limitation could unduly constrain where data centers locate and asked that the board keep flexibility while staff drafts the policy.

The board also directed staff to return with a county-wide policy that would identify best practices for review of future data center applications, including utilities, water use, noise, visual design and decommissioning expectations. Staff said the policy work will include consultation with Dominion Energy, Newport News Water Works and other stakeholders.

What the vote does not do is ban data centers; it shifts initial review from an administrative, by-right process to a public special-use permitting review in the M-2 district and commits the county to produce a policy to guide future decisions.

Planning commissioner and staff reports, the policy committee discussion and the public hearing informed the board’s action. The ordinance passed on a roll call of McLennan, Hippel, Larson and Eisenhower voting yes and Noll voting no.

The matter will return to staff for policy development and possible future amendments to the zoning code once the county has completed that work.