Penzance Development Data Center, Fredericksburg, Virginia

Fredericksburg's city council turned down the Penzance Development data center twice over, in the early hours of Wednesday, August 26, 2026. It voted 7 to 0 to deny the rezoning that would have put two data center buildings on the 84 acre Hylton tract at 1500 Gateway Boulevard beside Interstate 95, then 7 to 0 again to deny the special use permit that would have raised them from 50 feet to 75. The developer was Penzance, through an affiliate called 1500 Gateway LLC.

The application that went before the council had already been cut down. It was two buildings of about a million square feet, down from four and about two million; the generators had been turned to face the interstate; 44 percent of the site was to be left open; and the buildings were to be air cooled, with water limited to about 2,700 gallons a day for washrooms and fire suppression. Penzance raised its cash proffers to just over $40 million and signed a project labor agreement guaranteeing union construction. Its attorney, Charlie Payne, said: "I've never seen proffers of this nature in any data center industrial project, period."

It did not turn on the money. Council members pointed to the Technology Overlay District the city adopted after a seven month public process, which confines data center development to about 3.8 percent of the city, near Celebrate Virginia South and the ballpark. Mayor Kerry Devine said development pressure on the Hylton tract is still on the table. The hearing ran past midnight and adjourned at about a quarter to one, with 51 speakers and 49 letters read into the record, against six speakers at the planning commission hearing in July 2025 and 51 at the December one. The planning commission had recommended refusal both times. Vice Mayor Chuck Frye, a Teamsters member, said the construction workers' concerns about union jobs were real, and urged his colleagues to apply the lessons of the project labor agreement to other city work.