Tech Council Study: Frederick Data Center Project Represents $41M in Annual County Tax Revenue, 1,700 Jobs

Study: Quantum Frederick data center project represents an investment of nearly $30 billion in Frederick County, supporting high-paying jobs for thousands of Marylanders while significantly augmenting both local and state-level tax revenues.

The technology sector is driving tremendous demand for more computing and storage capacity. Data centers – the facilities that house the computers and equipment that power the information needs of the modern economy – are in high demand.

According to a new study from Sage Policy Group commissioned by the Maryland Tech Council, Quantum Loophole’s planned data center campus in Frederick County will generate $41 million in County tax revenue per annum and another $197 million for the State of Maryland each year, in addition to supporting approximately 1,700 jobs upon project completion.

In June 2021, Quantum Loophole, Inc. acquired over 2,100+ acres of land in Frederick County, Maryland. This site was formerly known as the Alcoa property and is identified as a growth area in the Livable Frederick Master Plan (LFMP). Quantum Loophole is the developer of the first-of-its-kind, master-planned data center community, Quantum Frederick.

Construction began in 2022, but the Maryland Department of the Environment in May revoked Quantum Loophole’s environmental management plan, citing numerous work and environmental concerns. In addition, the Maryland Public Service Commission failed to grant an exemption that would have allowed for the installation of 168 mission-critical backup diesel generators at the site.

In response to the PSC decision, Aligned Data Centers, which planned to build four data centers on Quantum Loophole’s campus, announced it would not proceed with the project. In a letter to the PSC, Aligned warns “that the Commission’s initial decision and order on rehearing have sent a negative – and perhaps fatal – signal to the hoped-for data center industry in Maryland.”

According to The Frederick News-Post, Kelly Schulz, the CEO of the Maryland Tech Council, said that the study’s job and tax revenue estimates are not affected by Aligned’s decision not to proceed with its project.

While she said she believes Aligned’s decision won’t stop any future data centers from coming to Maryland, “it definitely puts up a red flag when it … appear[s] that policy leaders are not on the same page.”

 

“The data center business is a new industry that is being created in Maryland, and we have an opportunity to make sure that it’s done well,” said Schulz, who was secretary of commerce and labor under Gov. Larry Hogan. “We should not, as a state, do things that are gonna put up artificial barriers to businesses that want to come to do business in our state.”

Local governments, just like the State, have a vested interest in economic development. Local economic growth creates jobs and increases salaries, expanding the tax base both locally and statewide.

As such, in 2020, MACo successfully supported legislation to enable tax incentives to increase Maryland’s competitiveness as a host of data centers, as the clustering of data centers, related businesses, and skilled workers could lead to additional infrastructure investments, including expanding high-speed internet service to underserved areas of the state.

Stay tuned to Conduit Street for more information.

Technology infrastructure is a rising component of commercial growth across our region and beyond. What would it take for Maryland to rival our neighboring states as hosts for data centers and similar facilities – and who’s holding the cards in this high-stakes competition? At the 2023 MACo Winter Conference session, “Cards on the Table: Bringing Data Centers to Maryland,” an expert panel will discuss the many considerations for these specific commercial uses that frequently require high–energy volume, backup generation capacity, and further considerations.

Learn more about MACo’s Winter Conference: