Key facts
- The Prince William Digital Gateway, a planned 2,100-acre data center campus, has been officially abandoned.
- QTS Realty Trust, owned by Blackstone, withdrew its appeal to the Virginia Supreme Court, ending a three-year legal battle.
- The project, which would have included 37 buildings and 22 million square feet of data centers, had an estimated $100 billion price tag.
- Legal challenges centered on the county's public notice for rezoning hearings falling short of state requirements.
- Local opposition to data center construction is growing due to concerns over land, water, and electricity demand.
The largest proposed data center project in the U.S., the Prince William Digital Gateway, has been officially abandoned after QTS Realty Trust, a Blackstone-owned entity, withdrew its appeal to the Virginia Supreme Court. This decision concludes a three-year legal battle over the 2,100-acre campus planned for Prince William County, Virginia, which aimed to house 37 buildings totaling 22 million square feet of data center space. The project, with an estimated $100 billion price tag at full build-out, would have been the largest data center complex globally.
QTS was the final developer involved, following co-developer Compass Datacenters' withdrawal of its appeal in April. The Prince William Board of County Supervisors also exited the litigation in April, having spent nearly $2 million in public funds defending the rezoning, which was initially approved in 2023 but later voided by the Virginia Court of Appeals in March. The court found that the county's public notice for the rezoning hearing did not meet the state's six-day spacing requirement between newspaper announcements.
In its filing, QTS stated the project had undergone extensive planning and review and would have significantly benefited the county through capital investment and job creation. The company affirmed its continued commitment to Virginia, highlighting ongoing investments in the Richmond region and its existing presence in Northern Virginia. This retreat occurs shortly after Blackstone agreed to transfer full ownership of three Northern Virginia data centers, valued at $7.8 billion, to Digital Realty in a $3.5 billion deal.
Northern Virginia remains a dominant hub for data centers, but the region faces increasing local opposition concerning land use, water resources, and strain on the electrical grid. Several states are considering or have implemented moratoriums on data center construction or are tightening permitting rules, as utilities grapple with the substantial increase in electricity demand driven by these facilities. Some grid operators are requesting developers to secure their own power generation sources. A recent Gallup survey indicated that 71% of Americans oppose data center construction in their local areas.
Despite the collapse of the Prince William project, Blackstone's overall data center strategy is unlikely to be significantly impacted. The firm manages a global data center portfolio exceeding $150 billion and recently raised $1.75 billion for its acquisition vehicle, Blackstone Digital Infrastructure Trust, to acquire existing, leased facilities catering to AI demand. The Prince William outcome underscores the challenges even major players face in navigating land-use disputes and organized local opposition through the legal process.