Unlocking Hampton Roads | Centered on Data Centers
In This Edition
Feature | 2026 Virginia State Budget: Centered on Data Centers
Here & Now | Mare Custos establishes U.S. presence in Norfolk
Word in the ‘Roads | Digest of significant press releases and investment announcements from over 40 of the region’s economic development authorities, alliances, chambers, incubators, and local governments
Regional RFPs | Opportunities to buy, build, and service regional municipalities
2026 Virginia State Budget: Centered on Data Centers
The Regular Session of the 2026 Virginia General Assembly adjourned on March 14, 2026, but legislative debate continued through the succeeding three months, as the legislature adjourned without a biennial budget. While the House and Senate budget proposals differed in various areas, the central point of contention was Virginia’s data center sales and use tax exemption (DCSUTE).
History of the Tax Exemption
Created in the wake of the 2008 financial crisis, the DCSUTE was intended as a tool to attract the industry to economically-distressed localities in Virginia - specifically those with an unemployment rate above 4.9%. To qualify, a data center was to commit an investment of $75 million in exempt property and create at least 100 new jobs paying at least twice the prevailing wage in the locality. In 2010, the program was expanded to the entire Commonwealth, with reduced investment thresholds and employment requirements. Further refinements through 2016 added a 2035 sunset date, and 2023 amendments introduced extended sunsets – 2040 for $35 billion/1,000-job commitments, and 2050 for $100 billion/2,500-job commitments. Currently, qualification requires a memorandum of understanding that commits $150 million in capital investments and creates 50 jobs.
Data Centers in Virginia
Data centers are major economic drivers, but also a growing point of controversy in the Commonwealth. According to the Joint Legislative Audit & Review Commission’s (JLARC) 2023 data center study, “[l]ocalities with data centers can collect substantial tax revenues from the industry, primarily from business personal property and real property taxes… For the five localities with relatively mature data center markets, data center revenue ranged from less than 1 percent to 31 percent of total local revenue.” Further, JLARC states that, “the data center industry is estimated to contribute 74,000 jobs, $5.5 billion in labor income, and $9.1 billion in GDP to Virginia’s economy annually.” 1
Critics counter that the industry's round-the-clock power demands strain the grid and require costly new infrastructure, with those costs passed to less-demanding ratepayers. Nearby residents also raise concerns about noise, water use, and light pollution – fueling public frustration despite the clear economic upside.
The Compromise
After months of contentious conference negotiations, a compromise emerged: a first-of-its-kind energy consumption tax, originally proposed by Governor Spanberger. As of July 1, 2026, data centers are taxed at $0.011 per kWh, with rebates available for on-site, off-grid energy generation. Revenue from the tax is capped at $600 million per year – $1.2 billion over the biennium – about $700 million less than the $1.9 billion a full exemption repeal was projected to generate. Any collections above the $600 million cap will be refunded to operators on a pro rata basis. While this compromise shows promise, it’s unlikely that it resolves the issue permanently.
The Current Paradox
Virginia now reckons with a difficult cost-benefit analysis: do we uphold our commitments and continue to foster the industry, or do we capture significant foregone revenue and risk damaging Virginia’s pro-business reputation?
Members of the House of Delegates and the Governor’s Administration believe that repealing the exemption is a signal of bad business to potential investors and could drive new investments away from the Commonwealth. They also state that the associated economic stimulus is critical for Commonwealth localities.
Members of the Senate – irrespective of the conference negotiation compromise – maintain that data centers need to “pay their fair share”, with some members already signaling plans to pursue related legislation next session.
Looking Ahead
According to JLARC, Virginia is now the world's largest data center market by operational capacity and continues expanding rapidly.2 Given the magnitude and growth of the industry – and the "Data Center Capital" title that comes with it – this legislative ceasefire is temporary. As Larry David once said, “A good compromise is when both parties are dissatisfied, and I think that’s what we have here.”
[1] Joint Legislative Audit & Review Commission, “Data Centers in Virginia”, 2023, pg. i-ii
[2] Joint Legislative Audit & Review Commission, “Data Centers in Virginia”, 2023, pg. 7-8
Article written by Carter T. Whitelow, MBA, Dylan Bishop and Peyton Lyons with Willcox Savage Consulting, a Virginia-first public affairs and lobbying firm dedicated to providing strategic guidance and advocacy to clients navigating the complex landscape of state and federal government.
Here & Now
Hampton Roads—a premier destination for international businesses.
Mare Custos Establishes U.S. Presence in Norfolk
Mare Custos, a France-based company specializing in maritime robotics and underwater inspection technology, announced in June 2026 that it has opened its first U.S. location in downtown Norfolk through the Hampton Roads Alliance's IDEA Lab.
The Norfolk office will serve as the company's base for growing its U.S. business and building relationships across the maritime, energy, infrastructure, and defense sectors. Mare Custos uses advanced underwater drones and other remote technologies to inspect ships, ports, offshore wind facilities, and other maritime assets. Its technology helps organizations collect more accurate data, improve safety, and reduce the time and cost associated with traditional underwater inspections.
Mare Custos identified Hampton Roads as a strategic location due to the region’s concentration of maritime, naval, and defense assets, as well as its growing offshore wind and subsea infrastructure activity. The company also plans to explore collaboration opportunities within the broader defense and maritime innovation ecosystem, including potential engagement with the 757 Defense Technology Accelerator.
By establishing operations in Norfolk, Mare Custos adds to the region’s expanding cluster of advanced maritime technology firms and reinforces Hampton Roads’ position as a hub for subsea innovation, autonomous systems, and ocean intelligence.
Hampton Roads Alliance, JUNE 4, 2026
Full press release here.
Word in the 'Roads
Recent press releases regarding regional economic development.
KONGSBERG Opens Regional Office in James City County
KONGSBERG, a global defense and advanced technology company headquartered in Norway, opened a new regional office in James City County in May 2026. The office marks the first operational step tied to the company’s planned Virginia Missile Factory, a major advanced manufacturing project supporting U.S. defense production.
The office will support early engineering, program management, and coordination activities as KONGSBERG advances its U.S. manufacturing plans. The project is expected to strengthen domestic missile production capacity and create high‑skill jobs aligned with Virginia’s defense and national security priorities.
Full press release here.
$310.2 Million TIFIA Loan Advances I‑64/I‑464 Express Lanes Project
The U.S. Department of Transportation has approved a $310.2 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to the Hampton Roads Transportation Accountability Commission (HRTAC) to support construction of new express lanes and a free‑flow tolling system along the I‑64/I‑464 corridor. The project targets one of the region’s most critical transportation arteries, used daily by commuters, freight carriers, military traffic, and port‑related operations.
The investment is expected to significantly reduce congestion, improve travel reliability, and enhance access to the Port of Virginia and surrounding economic centers. In addition to supporting workforce mobility and freight movement, the project is designed to strengthen regional resilience, including improved evacuation capacity and more efficient movement tied to military readiness and national security.
Full press release here.
Hourigan Expands to Virginia Beach Town Center with Support from Economic Development Incentive
Hourigan Construction Corp. is strengthening its presence in Virginia Beach with the relocation and expansion of its operations to 222 Central Park Avenue in Town Center. To support the move, the Virginia Beach Development Authority approved $75,000 in Economic Development Investment Program (EDIP) funds, which will help offset a portion of the company's expansion costs. The EDIP program is designed to encourage business investment, support corporate growth, and enhance the city's nonresidential tax base by helping companies expand or remain in Virginia Beach. The relocation is expected to contribute to the continued momentum of Town Center, which city leaders have identified as a focal point for economic growth and business investment.
Hourigan has established a strong reputation throughout the Mid-Atlantic for delivering complex construction projects across healthcare, higher education, corporate, and community sectors. Its move to Town Center places the company in one of the region's premier business environments and reinforces the area's status as a hub for professional services, corporate headquarters, and innovation-driven employers.
More information here.
Regional RFPs
Opportunities to buy, build, and service regional municipalities.
City of Chesapeake: Convention & Visitors Bureau Advertising Agency
The City of Chesapeake is seeking a full-service advertising and marketing agency with destination marketing experience to serve as the Chesapeake Convention & Visitors Bureau's agency of record. The selected firm will act as a strategic marketing partner responsible for developing and implementing a comprehensive marketing and communications program designed to increase visitation, strengthen the city's brand, and generate measurable economic impact through tourism.
VIEW RFP | Deadline: 2:00 p.m. on July 22nd, 2026
City of Norfolk: Medical and Pharmacy Benefits Management Services
The City of Norfolk, on behalf of the City, Norfolk Public Schools, and the Norfolk Redevelopment and Housing Authority, is seeking proposals for medical plan administration and pharmacy benefit management services for employees, pre-65 retirees, and eligible dependents. The contract will cover the period from January 1, 2028, through December 31, 2032, with the option for an additional five-year renewal. The Consortium prefers a bundled ("carved-in") approach but will also consider separate medical and pharmacy proposals if deemed to provide the best value. The solicitation also includes fully insured medical and pharmacy plan options.
VIEW RFP | Deadline: 2:00 p.m. on August 14, 2026
Structured for Solutions.
Our firm exists with one purpose in mind—offering practical solutions for the most complex challenges. And we specialize in helping international businesses establish a foothold in the United States with confidence and success. Backed by years of experience and a multidisciplinary team, we provide comprehensive guidance tailored to your unique needs.
