Starwood Files Data Center Plan as Virginia Residents Revolt

Barry Sternlicht’s Northern Virginia data center drive is forging ahead, even as residents plan to revolt against Starwood Capital Group’s dreams.

Starwood filed a permit application for its two-building project at the 34-acre Plaza 500 on the Alexandria town line in Virginia, the Washington Business Journal reported. The first building, Plaza 500 South, is planned for more than 226,000 square feet, according to the pending application.

HKS Inc. is the architect for the project. The first phase of construction is expected to carry a $5 million price tag, according to Fairfax County records.

In addition to the two data center properties, Starwood also proposed a substation on the site, which it purchased four years ago for $165 million. That substation would be located within 100 feet of homes in the Bren Mar neighborhood, sparking opposition among residents.

They pitched the county on changing the site of the project from Plaza 500 to a site in Chantilly, which an affiliate of Starwood agreed to purchase in the spring for $166.8 million. Fairfax officials didn’t go for that.

The next idea is a protest against the critical substation. Neighborhood residents are set to hold a rally against the proposed building when the planning commission reviews it in September.

“They are manipulating the process and going out of order intentionally to try to force the county to approve this despite the process not fully playing out yet,” the president of a local homeowners association told the publication.

Starwood declined to comment on those allegations.

Starwood already has a data center campus under development in nearby Herndon. Starwood purchased that site for its Renaissance Technology Park on eight acres from Word of Grace Christian Church in 2023 for $25 million.

Sternlicht’s company recently raised $10.2 billion for its latest commercial property fund. More than a third of that capital is expected to be deployed in data centers, doubling the last fund’s expenditure in the same sector.

— Holden Walter-Warner