Chesterfield Taps Data Centers to Diversify Tax Base, Ease Homeowner Burden

TL;DR: Chesterfield County is pursuing data centers, particularly Google's $3 billion-plus investment, to shift the tax burden from homeowners to businesses and diversify its historically residential-heavy tax base.

The story

Chesterfield County has spent the past decade deliberately pursuing data center development to address a structural economic imbalance: the county developed primarily as a residential bedroom community for Richmond, leaving its tax base heavily skewed toward homeowners to fund public services.

The county's current tax base is 80 percent residential and 20 percent commercial, a disparity county officials have sought to correct. According to calculations from the Virginia Economic Development Partnership, each $1 billion in data center development generates approximately $4.2 million annually for the county: $2.6 million in real estate tax revenue and $1.6 million in business personal property tax. By shifting commercial revenue responsibility from homeowners to businesses, the county aims to gradually rebalance toward a 70/30 residential-to-commercial split.

Google's $9 billion investment across Virginia announced in August 2025 anchors this strategy. The company plans to construct three data center campuses in Chesterfield: a primary facility at Bermuda Hundred (about 307 acres), a site of about 880 acres at Upper Magnolia Green, and a parcel of about 350 acres at Watkins Centre South near Route 288. Once all three campuses are fully operational, Google alone is projected to generate upwards of $40 million in annual tax revenue for the county, equivalent to more than six cents on the local real estate tax rate. Ground has already been broken, with construction expected to begin by year-end 2025 and typically requiring 18 to 24 months for completion.

To manage growth, the Board of Supervisors approved a comprehensive zoning ordinance overhaul in September 2025 that took effect January 1, 2026. Under the new code, data center projects countywide became a conditional use rather than by-right development, requiring case-by-case approval from supervisors through the public zoning process. This change came after the Board rezoned two of Google's future data center sites in May 2025 following public hearings. Google submitted detailed utility proffers committing to caps on water usage: 1.755 million gallons per day maximum at Upper Magnolia Green and 850,000 gallons at Watkins Centre.

The county is not pursuing limitless data center growth. Currently four data centers operate in Chesterfield; county leaders have stated they are not seeking additional data center projects beyond Google. Other commercial investments complement the data center strategy. The LEGO Group is building a $1 billion precision manufacturing facility at Meadowville Technology Park, and the county has secured more than $5.1 billion in new commercial and industrial commitments over the past six years.

The residential property tax rate has gradually decreased from 95 cents per $100 of assessed value in 2022 to 89 cents in 2026, a modest decline that reflects the early stages of the tax base rebalancing effort.

Key players

• Chesterfield County Board of Supervisors: Approved zoning changes and data center projects; set county development policy
• Google: Primary commercial anchor investor; planning three data center campuses in county
• Chesterfield Economic Development Authority: Led strategy to pursue data center and commercial development over past decade

Key dates

• 2015-2016: Chesterfield Economic Development Authority began seven-year push to attract data centers and diversify tax base
• May 2025: Board of Supervisors rezoned two Google data center sites (Upper Magnolia Green and Watkins Centre) after public hearings
• August 28, 2025: Google announced $9 billion investment across Virginia and $3 billion-plus in Chesterfield County data center campuses
• September 2025: Board of Supervisors approved comprehensive zoning ordinance overhaul making data centers a conditional use
• January 1, 2026: New zoning code took effect, requiring conditional-use permits for all new data center projects
• End of 2025: Google construction expected to begin on Chesterfield data center campuses (timeline: 18-24 months)

Why it matters: If successful, this strategy could meaningfully reduce residential property tax rates and slow future assessment increases, directly benefiting homeowners' tax bills. Conversely, heavy reliance on a small number of companies (Google) for revenue concentration creates vulnerability if circumstances change; local public services and schools depend on sustained commercial tax collection.

Places

• Bermuda Hundred
• Upper Magnolia Green
• Watkins Centre
• Meadowville Technology Park
• Route 288

Related links

• Chesterfield County Data Centers Official Page
• Chesterfield Tapped into Growing Data Center Industry as Part of Tax Base Diversification Strategy
• In Google, Chesterfield landed the 'Rolls-Royce of data center operators'
• Chesterfield seeking to diversify tax base, reduce reliance on residential assessments

Read the original at Chesterfield on Point →

Sources

• Chesterfield Tapped into Growing Data Center Industry as Part of Tax Base Diversification Strategy
• In Google, Chesterfield landed the 'Rolls-Royce of data center operators'
• Data Centers page, Chesterfield County Government
• Chesterfield seeking to diversify tax base, reduce reliance on residential assessments
• By attracting commercial investment, Chesterfield is diversifying local economy and tax base
• Zoning appeals board rejects challenge to permit requirement for data center project in Chester