Brookfield Affiliate Abandons Virginia Data Center

Botched newspaper notices were enough to bring down plans by a Brookfield affiliate for a massive Virginia data center development.

Compass Datacenters, a privately held firm that Brookfield purchased in 2023, is dropping out of its portion of a data center development set to span more than 800 acres in Prince William County, Bloomberg reported. The Dallas-based firm cited public opposition and hesitancy from lawmakers over tax breaks.

“While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward,” Compass president AJ Byers said in a statement.

The project has been bogged down in a legal mess that hinged on a failure by the firms to adhere to local laws.

In December 2023, county officials scheduled a meeting to approve the data center development hub being helmed by both Compass and QTS, which is backed by Blackstone. The meeting drew hundreds of attendees and more than 24 hours of debating.

What it didn’t include, according to a lawsuit from local homeowners, was proper advance notice. Local code dictates the hearing is advertised by public notice in a newspaper twice, at least six days apart. The homeowners alleged that didn’t happen.

The administrative snafu added to the opposition against the data center development. A judge this year upheld a previous ruling that invalidated the zoning approvals because of the botched public notices.

With Compass’ decision not to appeal, the company is said to be backing out of Northern Virginia altogether. Virginia-based QTS appears poised to appeal the court ruling that invalidated the zoning approvals, which could keep part of the project intact.

The region has been a mecca for the data center sector, even with growing vocal opposition against such projects.

— Holden Walter-Warner