A student research team at the University of Mary Washington wanted to find out whether these agreements exist and if so, how prevalent they are.
By Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
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Most jurisdictions in the Fredericksburg area have signed nondisclosure agreements with data center developers such as Amazon, Quantum Loophole, DataBank, CloudHQ, Hyperland, and CleanArc, a student research team at the University of Mary Washington has learned.
The agreements largely prevent the jurisdictions from disclosing “confidential information,” often including the size of the development, the energy and water demands, and sometimes even the name of the company.
“We had become aware of how data center developers have been using NDAs in Prince William County and so we wanted to learn how broadly or whether or not they are being used here in our region as well,” said Eric Bonds, professor of sociology and anthropology at UMW, who advised the research team.
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These agreements are commonly used in economic development, but “when we’re talking about a development that could use as much energy as is being used in a whole county or town, then NDAs become a much greater concern as opposed to one concerning a warehouse distribution center,” Bonds said.
Through requests made under Virginia’s Freedom of Information Act, UMW students Victoria Gallaway, a senior, and Viktor Newby, a sophomore, received copies of the NDAs that Fredericksburg City and the counties of Stafford, Caroline, Louisa, Orange, and Culpeper have signed with data center developers.
Spotsylvania is working on its response to the team’s FOIA request and King George has been “largely unresponsive,” according to a press release from the team.
Local agreements
Fredericksburg provided one NDA between the city and Amazon that was signed in 2018, concerning a project that “to the best of our knowledge … never came to fruition,” the team wrote in a press release.
The language in this agreement is identical to that in agreements between Amazon and Stafford County signed in 2018 and in 2020. The agreements prevent the jurisdictions from disclosing any “confidential information”—with “confidential information” defined broadly as “all nonpublic information relating to Amazon or disclosed by Amazon to the above-referenced agency, its Affiliates or agents of any of the foregoing … that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential.”
The research team noted that Amazon could also be using the NDAs to pursue potential distribution center development, which is why some jurisdictions have more than one agreement with the company.
Stafford also provided an NDA with “Potomac-Stafford Land Company” signed in 2023. The agreement states that “the parties desire to work collaboratively to attract data centers” and it prevents disclosure of “confidential information,” which is defined as “any technical or business information disclosed by one Party to another Party” that is identified as “confidential” or “proprietary.”
Two local jurisdictions—Caroline and Culpeper counties—have signed NDAs with companies whose names are withheld. Caroline provided an NDA with the company’s name redacted and Culpeper signed an agreement with an entity simply identified as “The Company,” according to the research team.
Caroline also has NDAs with Amazon, Quantum Loophole Inc., Hyperland LLC, and CleanArc Data Centers. Culpeper has agreements with Cloud HQ, DataBank, and CleanArc, and Stafford has an agreement with Quantum Loophole in addition to the other two mentioned.
Do local residents have the information they need about data centers?
In an interview with the Advance, the students said their research was inspired by the question, “Do local residents have all the information they need about the proliferation of data center developments?”
“There were a lot of data center applications that came in around the same time,” Victoria said. “It was little bit overwhelming, and we don’t know if the public got all the information they should have.”
The students discovered that obtaining information about development plans wasn’t easy.
“We just wanted to get basic information like the estimated energy usage, square-footage, water cooling systems, etc., but we were finding that there was no way to find that information anywhere,” Viktor said.
A story published in the Prince William Times in 2023 drew the team’s attention to the data center industry’s use of NDAs. “That’s when we started filing the FOIA requests” to determine how widely these agreements are used in the Fredericksburg area, Viktor said.
NDAs serve a valuable purpose in economic development but can be overused by companies to the detriment of communities, a 2022 report by the American Economic Liberties Project states.
“Of course, actual proprietary information should not be disclosed by public officials after it has been turned over in good faith,” the authors write. “However, the nondisclosure agreements often go beyond that narrow protection, covering any discussion, negotiations, or proposals and counterproposals in which the two parties engaged.”
Victoria said that even if NDAs are commonly used within economic development broadly and the data center industry specifically, that doesn’t mean the public knows about this practice.
“I was very surprised by the amount of [these agreements that exist locally],” she said. “And nobody seems to know about that, which is very alarming.”
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