Data Center Rezoning: How 22 Million Square Feet Was Approved, Then Voided

Prince William County approved 1,760 acres and up to 37 data centers over its own staff's recommendation of denial. Two years later the Court of Appeals of Virginia declared all three rezonings void ab initio — because a newspaper advertisement was never confirmed. Read from the opinion and the developer's own proffer filings.

An entitlement is not an asset. An entitlement that survives the procedure used to grant it is an asset, and the difference is not visible in any rendering, press release or pro forma.

The clearest public demonstration of that difference is the PW Digital Gateway in Prince William County, Virginia: three rezonings covering about 1,760 acres, approved in December 2023 over the county staff's recommendation of denial, and declared void ab initio by the Court of Appeals of Virginia on 31 March 2026. The reason was not power, water, demand, cooling or financing. It was a newspaper advertisement that a county clerk did not confirm.

This page is read from the court's published opinion and from the developer's own filings with the county, both of which are public. What is in the record and what is not is set out at the end.

What was approved

Source: Board of County Supervisors of Prince William County v. Oak Valley Homeowners Association, Court of Appeals of Virginia, Record Nos. 1590-25-4, 1584-25-4, 1592-25-4 and 2025-24-4, published opinion of 31 March 2026, at pages 6 to 7 (opinion).

Together: as many as 37 data centers and 22.2 million square feet, in what the opinion calls "a largely rural part of the county", operating "24/7" once built. The proffers set noise limits measured at neighbouring residences — which tells you how close the neighbours are.

How it was approved

The sequence matters more than the outcome, because every step of it is the kind of thing a diligence process can look up.

• The county's own staff recommended denial of all three rezonings, "on multiple grounds, including that the specific footprints for the data centers had not been submitted for review".
• The public hearing opened on 12 December 2023. The Board first went into closed session to consult counsel about "probable litigation".
• A supervisor moved to defer the hearing "until such date as a proper public notice has issued", saying it would avoid expected litigation. The motion failed, five to three.
• The Board then heard more than 17 hours of public comment.
• In the early morning hours of 13 December, while public comment was still underway, the developers submitted revised proffers. Asked before the vote, staff said it had not been able to thoroughly vet them.
• A motion to deny all three failed on a four-four vote. The rezonings were then approved four to three, with one abstention. The Board adjourned at 1:14 p.m. on 13 December — 27 hours after the meeting began.

Every fact in that list is from the opinion, pages 9 to 11. Note what it describes: the binding conditions on 22.2 million square feet, filed overnight and voted on before the county's own planners had read them.

What voided it

Virginia requires a locality to advertise a proposed zoning ordinance in two successive weeks before the hearing, and — if it advertises the text "by reference" rather than in full — to "identify the place or places within the locality where copies of the proposed plans, ordinances or amendments may be examined" (Code § 15.2-2204(A), as it then stood). The county's own zoning ordinance imposed overlapping requirements of its own.

Two things went wrong.

The first advertisement never ran. The Board's clerk emailed The Washington Post on 20 November 2023 with the ad and the requested run dates. The Post replied with a price of $7,509.48 and the words: "Saved ads will not run unless they are scheduled and submitted." Two minutes later it emailed again, saying the clerk had to confirm by 3:00 p.m. the next day. The clerk did not respond by the deadline, and the 28 November advertisement did not appear.

The documents were not there to be examined. The advertisements contained neither the text of the proposed ordinance nor the proposed proffers, so the county was relying on the "by reference" route — and the trial court found as fact that it was not until 7 December 2023, after the first two ads had run and five days before the hearing, that the proposed plans, ordinances and amendments were available to be examined.

The Court of Appeals affirmed that both defects violated the statute and the county's own ordinance, "rendering those rezonings void ab initio". It went further on the point that matters most to anyone relying on an approval:

The saving provision in Code § 15.2-2204(B) — which excuses a violation of the written-notice requirement for affected and adjacent landowners who had "actual notice of" the hearing or who actively participated in it — does not excuse advertising deficiencies under subsection A. In other words, in a timely challenge brought under Code § 15.2-2204(E), a plaintiff who alleges and proves standing may enforce the mandatory public advertising requirements, even if the plaintiff knew about and actively participated in the public hearing.

So the argument "everyone knew, and the objectors were in the room for 17 hours" is not a defence. A procedural defect in how the hearing was advertised is enforceable by people who attended the hearing.

What the proffers actually committed, and what they did not

Proffers are the enforceable conditions a Virginia developer offers to get a rezoning — the closest public analogue to reading a covenant. For the Compass rezoning they can be read in the applicant's own filing: a letter of 11 December 2023 from Cooley LLP for H&H Acquisitions, LLC and Compass Datacenters, submitted with the revised proffer statement the day before the hearing and answering nine concerns the staff report had raised four days earlier (letter).

Four things in it are worth any investor's time.

"Substantial conformance" and "general conformance" are not the same promise, and the difference was negotiated in public. Staff asked in November for substantial conformance with building footprints; the applicant agreed; staff then recommended reverting to general conformance, and the applicant accepted that, while keeping substantial conformance for building orientation, points of access and the limits of disturbance. When a deck says a campus "conforms to the approved plan", those two words decide how much that sentence is worth.

The first building is bound more tightly than the ones after it. Under Proffer 17 the architecture of the buildings fronting Artemus Road in Land Bay 6 must be in substantial conformance with the "Typical Compass Building Elevations"; every subsequent building need only be in general conformance and of "similar quality and character". The applicant's reason is stated plainly and is commercially honest: flexibility is "needed to accommodate future customer demands for buildings that are developed pursuant to individual customer standards and requirements". The same letter is where the build-out period comes from: it describes "developing over 11 million square feet of nonresidential development over a 15 to 20-year time period", and asks for flexibility "over the 15-20 year development cycle". A build-out that long is not a single product.

A zoning approval cannot promise where the power will go. On the staff's objection that no information was given about the electrical infrastructure, the applicant's answer is the most useful sentence in the file: "neither the Applicant nor the County legally can dictate the ultimate location of future internal transmission lines connecting the substations." Substation locations were proffered; the lines between them were not, and could not be. That is the same structural limit described on the power constraint and behind-the-meter power — an entitlement is a land-use permission, not an interconnection.

Several proffers hand discretion to a county official. Staff objected that the Planning Director had too much latitude: over substation location and size (Proffer 42), over noise-mitigation methods (Proffer 41), and over extensions of time for proffer performance when third parties such as the state highway department are slow (Proffer 58). The applicant defended each as standard practice. Both readings are reasonable; what matters to an investor is that the schedule and some of the conditions are, by design, adjustable by a person who does not work for the sponsor.

The waiver nobody mentions in a pitch

Prince William allows data centers by special use permit inside a designated overlay district. Outside it, the Board may waive that requirement and approve them through a rezoning instead — and it did here. The applicant's letter points out that the county had done the same thing before, at Gainesville Crossing (REZ2018-00008), "without a special use permit and with no commitment to building footprints and site layouts", and quotes the staff report for that case as saying the rezoning process "provided the same level of staff review, afforded the same level of public comment and public hearings, and utilized a Board adopted entitlement process".

That is worth knowing in both directions. A waiver is what makes a large campus possible outside the overlay; it is also one more discretionary act in the chain that an objector can later attack. Here the chain broke at a different link, but the number of links is the point.

Five questions this case hands to an investor

1. Is the entitlement final, or merely granted? Ask for the date of adoption and whether any suit was filed inside the challenge window. In Virginia that window is short and explicit: "Every action contesting a decision of a locality based on a failure to advertise or give notice . . . shall be filed within 30 days of such decision with the circuit court having jurisdiction of the land affected by the decision" (Code § 15.2-2204(E), quoted in the opinion at page 11). Both sets of plaintiffs here sued inside those 30 days. A window this short cuts both ways: it is over quickly, and an approval that was challenged in time can stay contestable for years afterwards — as this one did, for two.
2. Was it approved over a staff recommendation of denial? That is public and it is a measurable risk factor, not an opinion. Staff recommending denial does not stop an approval — but it tells you what a court will be shown later.
3. Were the binding conditions available for public review when the hearing was advertised? That single question is what voided 1,760 acres here.
4. Which conformance standard applies to the building being financed — substantial or general — and does it apply to the first building or to all of them?
5. Who can change the schedule? If a county official may grant extensions for third-party delay, the completion date in a projection is an estimate with a discretionary override.

Those sit alongside the sponsor-level questions in questions to ask a sponsor and the offering-document reading in reading an offering circular.

Why this belongs in an investor's risk list, not a planner's

Most writing about data center siting treats zoning as a stage to be cleared. For someone putting money in, it is better understood as a condition that can be revoked retroactively. The failure here was clerical: an unconfirmed advertisement and a set of documents posted five days before a hearing. No engineering review, power study or tenant covenant would have caught it, because it had nothing to do with the building.

It also moved faster than most investment horizons but slower than most marketing cycles: approval in December 2023, trial, and an appellate opinion in March 2026. A fund with a five-year hold would have owned this through all of it.

That is the general lesson for the category, and it is the same one as single-tenant risk and the risks page in a different register: the thing most likely to break is not the thing the deck is about.

Where the record stops

Stated plainly, because this page rests on documents rather than on reporting:

• What was read first-hand: the Court of Appeals' published opinion of 31 March 2026, and the applicant's proffer-response letter of 11 December 2023 on the county's own site. Every quotation above is from one of those two.
• What could not be read from here: the county staff report of 7 December 2023, and the Gainesville Crossing staff report (REZ2018-00008). Both sit on eservice.pwcgov.org, which answers HTTP 403 to us; tried again on 2026-11-10. Where the staff report is described above, it is described as the applicant's counsel characterised it or as the opinion recounts it — not from the document itself. The Gainesville Crossing quotation is likewise a quotation of a quotation, and is labelled as such.
• What is mentioned but not verified: the aftermath. Press reports during 2026 describe the county withdrawing from the litigation and the developers dropping their appeal. That is press-reported and unverified here — we have not opened the filings, so it is named in this one sentence and used nowhere else on the page. The position to work from is the one the record supports: the rezonings were held void on 31 March 2026, and anything later needs its own source.

For the engineering and siting side of the same question, the free vendor-neutral reference is *The Definitive Guide to AI Data Centers*, chapter 3.10. They cover how a site gets chosen and permitted; we cover what it means for money already committed.

Nothing here is investment advice, and nothing here is legal advice. See how this site is funded.