Major tech companies invest in greater Richmond area

Illustration by Iain Duffus.

Silicon valley giant, Facebook recently announced plans to build a $1 billion data center in Henrico County that will bring roughly 100 jobs.

The social media and networking company based in California will invest the $1 billion in a 1 million-square-foot data center in White Oak Technology Park, located in eastern Henrico. The center will cost $750 million to build and is expected to create thousands of jobs.

Henrico Deputy County Manager for Community Development Randall Silber said a minimum of 100 jobs will be created when the data center goes online in 2019.

Hundreds of construction jobs will be created over the next few years. The project that they will be working on will consist of three buildings that are up to 2.5 million square feet, according to the Richmond Times-Dispatch.

“The impact will be large from a tax revenue perspective and not heavily impact county services such as schools, roads and public safety,” Silber said. “Adding Facebook to the county’s portfolio of quality businesses will be significant and place Henrico ‘on the map’ for other data centers looking for new locations.”

Henrico County Manager John Vithoulkas is most excited for Facebook’s interest in community involvement.

“They are a values-based organization that wants to become part of the community and so for us, the biggest opportunities exist within our K-12 schools,” Vithoulkas said. “Having their knowledge, participation, expertise and commitment I think is going to be incredibly beneficial for our school system.”

According to Vithoulkas, most of the jobs in the center will be highly technical, dealing with maintaining computers. Fabrizio Fasulo, Director of the Center for Urban and Regional Analysis (CURA) in the L. Douglas Wilder School of Government and Public Affairs, said data center jobs typically require a medium to high level of skill.

Of the $750 million invested for building the center, some may go into other states but plans to benefit Richmond’s regional economy as a whole.

“It looks like a bulk of work is going to be subcontracted with local firms from the Richmond MSA, so the whole regional economy is going to benefit from it,” Fasulo said. “And then there’s a fraction of the investment of the $750 million that are going to go in other states — Pennsylvania, West Virginia, Tennessee and so forth. So not all investments are going to stay here but for sure it’s going to have a ripple effect and we’re going to see a sizeable economic impact.”

Gov. Terry McAuliffe announced $250 million of the investment will be allocated towards new solar activities in the Commonwealth, so the data center will run on 100 percent renewable energy.

“$250 million investment in renewable energy in Virginia means that we’re going to have a sizeable boost in that industry sector and that’s an industry sector that right now is making the fortunes of countries like Germany and China,” Fasulo said. “That’s going to be the economy of the 21st century.”

Most recently, Amazon has proposed their second headquarter location in Virginia. The company is looking at 10 sites in Virginia, three of them in the Richmond-area. The proposal states the headquarters would bring over 50,000 jobs and expects to spend over $5 billion on assets such as land and construction.

Attracting economic development projects to the Commonwealth is part of McAuliffe’s “New Virginia Economy” plan. According to a report by the governor’s office, since taking office in 2014, the seasonally adjusted unemployment rate dropped from 5.4 percent to 3.7 percent in May 2016. McAuliffe closed 851 economic development projects and created more than 167,100 jobs in the past three years.

The data center’s announcement comes at a time when big tech companies are scouting out Richmond and neighboring counties for a home. Last year, CoStar Group Inc., a company that operates the largest commercial real estate database in the country, made Richmond their headquarter of operations. The company promised 730 jobs ranging in salary from $40,000 to six-figures.

Fasulo said to continue attracting sustainable, high-skill jobs to the region, the state needs to work on retaining young graduates and closing the gap in IT and STEM jobs.

“Regions have to attract local talent – that’s what’s going to make a difference in the future for this kind of economy, the economy that invests in high-skilled, high-quality jobs and also high paid jobs,” Fasulo said.

SaraRose Martin, Staff Writer

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