• The Project Washington data center north of Delaware City is still on the table.
• It still needs an appeal hearing after the Delaware Department of Natural Resources and Environmental Control said it violates the Coastal Zone Act.
• It may have to compete with potential New Castle County regulations on data centers.
• Projections of economic benefit from developers and a County Council member vary.

Delaware’s largest data center proposal remains on the table despite state hurdles.

The data center would be 11 two-story data center buildings surrounded by electrical fields on two large land parcels north of Delaware City accessible by Hamburg Road, Governor Lea Road and River Road. It would be 6 million square feet of data center running 24 hours a day, seven days week. One land parcel needs to be rezoned, needing more approvals and a County Council vote.

One of its largest hurdles was the Delaware Department of Natural Resources and Environmental Control’s February ruling that the project cannot go forward because of the state’s Coastal Zone Act. The decades-old law prevents most large industrial projects from becoming a reality along shorelines on the Atlantic Ocean and Delaware River and Bay, Indian River Bay and more. The developer, Starwood Digital Ventures, has appealed that decision.

On March 4, the project was presented to the state’s Preliminary Land Use Service board, which coordinates state, county and local plans. They were originally slated to present to the New Castle County Board of Adjustment on March 5, but asked for a “continuance” and got it, according to New Castle County Land Use General Manager Dave Culver. The meeting is moved to a later date, and the county will get notes about the rezoning and plan in general after the state planning board meeting.

Now, the project’s developers are promoting their projects to New Castle County residents, political campaign style. Residents may have seen text messages and social media posts promoting Project Washington’s potential economic viability recently as the developers continue to trudge through the state and county processes to get the massive data center approved and moving.

“Let’s get Project Washington the green light to bring 3,500 construction and skilled trade jobs over the next ten years! Project Washington is fully consistent with the County’s Comprehensive Plan; we cannot afford to slow down job creation,” one automated text to New Castle County Council member David Carter said.

While meetings at all levels are looking at this project’s viability and potential regulations, Starwood Digital Ventures is confident in the project.

What is a data center and why could one come to Delaware?

Data centers house computer systems, servers and more to store, process and distribute information. Project Washington will be a larger-than-average data center campus serving many customers, and would comfortably be the largest data center in Delaware.

Delaware does not have the large data center campuses other states in the region have. Specifically, Virginia has become a hotbed for new facilities in the past few years since use of artificial intelligence began to skyrocket. Loudon County in Northern Virginia has become the data center capital of the U.S., and a report from the Northern Virginia Technology Council in 2024 said they can contribute billions to economic output and to tax revenue.

“Data centers are the major drivers of investment in Virginia,” the 2024 report reads. “This investment comes in the form of building and operating the data centers themselves, plus investments in Virginia made by businesses that supply and support data centers in the state, such as energy and utility providers and manufacturers.”

The report said data centers were responsible for more than 26,000 operational and construction jobs and over $16 billion in overall economic output.

Starwood thinks something like that will happen in Delaware. Jim Lamb, who is handling media relations for the project, said the project will generate about $76 million in annual revenue for the county once completed. He said $60 million of which will go toward public education and $15 million for the county’s general fund.

“If this was fully operational today, this project would be accounting for nearly 20% of the entire general operating fund for the county,” he said.

He said this will create 3,500 construction jobs and 700 permanent jobs, and that the project has the support of local trade unions. The permanent jobs will service and upgrade the systems continually. The estimated economic output is “almost $10 billion,” Lamb said.

THE LONG HAUL Data center project in Delaware City still a long way from reality

“It’s unique in terms of the level of support,” he said. “There’s never been a project like this in Delaware that has had every union and trade in support.”

The project will have a “closed-loop” water cooling system as well. Data centers nationwide have been scrutinized for their water usage, but a closed-loop system recirculates water. Lamb said the data center, once up and running, will use 12.7 million gallons of water annually. He said this water system makes the project “state of the art.”

This, and the open space that will be built into the project and its location in a relatively unpopulated area of New Castle County, according to Lamb.

“We are in the perfect location for a data center campus,” he said “And if you look at other examples, you’ll see that this is really a unique opportunity for the county and the state.”

DNREC to data center: Drop dead

Delaware’s environmental agency put the brakes on this project in February by saying it violates Delaware’s Coastal Zone Act.

For Project Washington, the pitfalls were the more than 500 backup diesel fuel tanks and generators, which would store 2.5 million gallons of fuel, the report reads. The most backup generators on any project in Delaware’s coastal zone is eight, the report says.

“Indeed, a proposal to operate more than 500 backup generators at a single location with more than 2.5 million gallons of stored diesel fuel appears to be entirely unprecedented, and would have been inconceivable just a few years ago,” the report says. “The large tank farm that is incorporated into this proposal will pose exactly the types of risks that justify the categorical exclusion of such a tank farm from the Coastal Zone as a prohibited use.”

DNREC DECISION DNREC says data center is prohibited, developers plan to forge ahead

The tanks are for power emergencies, and would only run 37 to 45 minutes per month just to test if they are operational, Lamb said.

The appeal from Starwood’s attorneys said the original DNREC decision “solely focuses on alleged environmental risk and worst-case emissions, and does not fairly weigh or explain these countervailing factors in light of regulating criteria.”

The official appeal mentions countervailing factors including avoiding wetlands, no direct surface water discharges, and projected economic benefits.

The appeal will be heard on March 24, and if needed, March 25, in Dover.

New Castle County Council member wants rules for data centers

David Carter has been leading the charge toward data center regulation for months, and he’s not stopping now.

The council member who represents Middletown and Townsend in New Castle County Council is drafting legislation that would require closed-loop cooling systems and clarifies noise levels that data centers can produce. It also restricts data centers into land parcels zoned “heavy industry,” “industry” and “extractive use.” This came from months of compromises within New Castle County Council over how to regulate data centers in the future.

He said Project Washington’s situation in Delaware is much different from others in states like Virginia. New Castle County does not have a Business Tangible Personal Property tax on “computer structural equipment” or have a project’s sales tax, making the project’s tax revenue potentially smaller, more like $2 million to $5 million.

“I think this is a real bad deal for Delaware,” Carter said. “It ain’t adding up to be positive.”

This project could add demand to an already expensive power grid in Delaware. The state produced the second-least amount of electricity in the country in November 2025 according to Choose Energy, a website with electricity rates and data.

In his official podcast in December 2025, Gov. Matt Meyer said he supports having data centers as long as they don’t come at the expense of residents. A proposed “large load tariff” from Delmarva Power and Light would require high energy users like data centers to pay a larger share of the transmission and infrastructure costs associated with their substantial electricity needs.

LARGE LOAD TARIFF? Delaware ratepayers challenge Delmarva Power’s energy tariff

To Carter, comparing Project Washington to other data centers in the region is more than comparing apples and oranges.

“It’s comparing apples to elephants,” he said.

Shane Brennan covers Wilmington and other Delaware issues. Reach out with ideas, tips or feedback at slbrennan@delawareonline.com.