Expansion of Maryland’s first data center campus combined with actions by county and state governments are creating some optimism that Maryland could develop a data center submarket, albeit on a moderate scale.
In December, Frederick County officials overwhelmingly approved plans by Rowan Digital Infrastructure to build the Bauxite II and Bauxite III data centers. Measuring 822,620 square feet and 591,913 square feet respectively, the two new facilities will occupy 166.5 acres adjacent to Rowan’s Bauxite I data center at the Quantum Frederick campus.
In total, Rowan is planning to build 11 data centers on the 2,100-acre campus which is a project of Catellus Development Corporation.
“Construction of Maryland’s first data center campus in Frederick County is well underway and we are seeing encouraging signs of interest from several data center operators,” said Kelly Schulz, CEO of the Maryland Tech Council. “I believe Maryland could realistically attract several more data center campuses in the next few years, particularly in localities that offer strong connectivity to major fiber routes, reliable power infrastructure, and proximity to both Washington, DC and Baltimore markets.”
Maryland, Schulz noted, faces some challenges in attracting data centers, namely energy availability and permitting processes.
“However, these are all areas where we can make meaningful improvements,” she said. Already, “Governor Moore’s administration has shown leadership on this issue.”
Last year, the Moore administration and the Maryland General Assembly passed the Critical Infrastructure Streamlining Act which enables faster approvals of emergency backup power generation for data centers.
In 2020, the state created the Data Center Maryland Sales and Use Tax Exemption program which eliminates tax on some personal property purchases for data centers located in-state.
Those two initiatives were “critical to the development of our first data center campus in Frederick County,” Schulz said. “Moving forward, the key for all policymakers will be to ensure a consistent and transparent permitting process and to continue setting the tone that Maryland will be welcoming to an industry that creates high-paying jobs and positions Maryland as a hub for the digital economy.”
Last fall, Frederick County’s Data Centers Workgroup proposed new regulations to clarify the requirements for data center developments. Those included increasing the minimum lot size for data centers, requiring that centers be located within two miles of high-voltage electrical transmission lines, allowing land zoned as ‘general industrial’ and ‘limited industrial’ to be used for data centers, and setting standards for onsite energy generation, including limiting the amount of fuel stored onsite and requiring generators to meet Tier 4 emissions standards.
Rowan praised the county for its “thought and collaborative approach to digital infrastructure development.”
Enabling the growth of a data center submarket could deliver major economic benefits to Maryland, Schulz said.
Construction of the three approved Rowan data centers is expected to cost $1.4 billion, support 10,300 construction jobs and generate $64.5 million in state and county tax revenues, according to the Sage Policy Group.
Analysis by the Maryland Tech Council concluded that operations of the three Rowan centers will generate more than $19 million in county tax revenue annually and another $38.8 million in annual state tax revenue. It would create 275 permanent jobs, paying an average of $100,000 each, and support another 1,071 secondary jobs.
Construction and operation of the entire Quantum Frederick campus, according to the Maryland Tech Council, would support 48,000 jobs in Frederick County over a 15-year period.