Why the data center industry came to Dickerson
Proposed redevelopment of 700-acre industrial site part of wider effort to establish state, region as digital infrastructure hub
By
Ceoli JacobyApril 6, 2026 11:59 a.m.
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Editor’s note: This is part one of a two-part series exploring data centers in Montgomery County. The second part, which focuses on environmental impacts, will be published Tuesday.
For nearly six years, a decommissioned coal-fired power plant in Dickerson has been sitting idle.
The facility no longer sends exhaust into the air or streams of warm water into the nearby Potomac River. There are no obvious signs of development activity, no construction workers or heavy machinery waiting to break ground.
Most of its neighbors would have been content to keep it that way, Montgomery County Council Vice President Marilyn Balcombe (D-Dist. 2) told Bethesda Today in a Jan. 16 interview.
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“If the community had the choice, nothing would go there,” said Balcombe, whose district includes Dickerson. “But that’s not the reality.”
Terra Energy, the Florida-based company that owns the 700-acre site of the former power plant on Martinsburg Road, advertises the property on its website as an “ideal space for data warehouse and battery storage.” Data centers are secure warehouses used to store computer servers and other information technology equipment.
Atmosphere Data Centers, a California-based company, has applied to the county to develop a campus of five data center buildings plus associated infrastructure on 110 acres zoned for heavy industrythat it is under contract to purchase from Terra Energy. The parcel, part of Terra’s 700 acres, is surrounded by the county’s Agricultural Reserve.
Montgomery Planning spokesperson Chris Peifer said as of Friday that Atmosphere’s application is moving through the department’s intake process and application materials will be made public when the review is complete.
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A ‘zeitgeist moment’
Growing regional concern over the power needs of data centers has put Atmosphere’s plans squarely in the spotlight — though plans have been in the works for years. According to Balcombe, Terra Energy had been in talks with Upcounty civic and environmental groups about a possible data center campus in Dickerson before she joined the council in December 2022.
In December 2023, Terra Energy filed an initial application to build a data center campus within the 700-acre retired coal-fired power plant site, county planning records show.
Only in recent months, however, have residents in other parts of the county taken a serious interest in the Dickerson proposal, Balcombe said.
Now, local officials and environmentalists are sounding the alarm about environmental and climate impacts — with some members of the County Council, including Balcombe, pushing for stricter rules governing such facilities.
“Nobody paid attention to it until it became this zeitgeist moment of ‘oh my gosh, data centers,’ ” Balcombe said.
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That prospective data center developers find the Dickerson site appealing is by design. For more than a decade, economic development officials have worked to market the Washington, D.C., region and the state, generally, as a hub for digital infrastructure.
Maryland Tech Council CEO Kelly Schulz told Bethesda Today in a Feb. 26 interview that her introduction to the data center conversation came in 2019, the first of her three years as Maryland’s secretary of commerce under then-Gov. Larry Hogan (R).
That year, Schulz said, a group of state officials traveled to California on an economic development trip and met with three companies that use data center servers about how to bring the industry to Maryland.
“Those conversations were very helpful to really understand what it is they’re looking for,” Schulz said.
One outcome of those conversations, Schulz said, was the creation of a sales and use tax exemption for data center personal property, such as computer servers, above a minimum investment. The Maryland General Assembly passed a law to establish the tax exemption during its 2020 legislative session.
“True to their word, that’s when we started receiving phone calls from the industry about very specific interest in opportunities that were available in different parts of the state,” Schulz said.
‘Kind of a unicorn’
Ben Mann, a Bethesda resident who leads real estate broker Cushman & Wakefield’s data center capital markets practice in the greater D.C. area, described the Dickerson site as “kind of a unicorn” during a Feb. 3 community forum on data center policy in Rockville.
“When it comes to data center land, there are four legs of the stool—you need power, zoning, water and fiber,” Mann told Bethesda Today in a Feb. 27 interview. The Dickerson site has all of them.
Atmosphere’s plan for the Dickerson site involves the construction of five two-story, 225,000- square-foot data center buildings, according to Atmosphere CEO Chuck McBride.
Collectively, the proposed data center buildings would use 360 megawatts of electricity, McBride wrote in a statement emailed to Bethesda Today on March 11.
“This is a place that used to generate hundreds of megawatts of power, so it sits at an infrastructure hub,” Mann said of the Dickerson site. “It’s cost effective to deliver power to that location.”
Like the power plant that came before them, the proposed data center campus in Dickerson would use water from the Potomac River to cool the machinery inside.
According to McBride, Atmosphere’s campus would use an average of 69,300 gallons of water daily for cooling. Usage would be lowest in cold weather and highest when air temperatures exceed 75 degrees.
The proposed maximum daily allowance for the campus would be 500,000 gallons, while the coal-fired power plant used up to 400 million gallons per day, according to McBride. Atmosphere has submitted water withdrawal and discharge permit applications to the Maryland Department of the Environment, aiming to be in “full compliance with county, state and federal environmental regulations,” the company says in a fact sheet about the project.
Connecting to fiber
The proposed data center campus in Dickerson would also benefit from its proximity to QLoop, a 43-mile hyperscale fiber-optic ring connecting Maryland to Northern Virginia’s Data Center Alley via two crossings under the Potomac River.
Technology companies seek out data center campuses close to fiber infrastructure to minimize latency—the amount of time it takes a packet of information to travel from one point in a network to another. For QLoop, the expected travel time would be one millisecond, according to the website for developer Quantum Loophole.
The expansion of Northern Virginia’s fiber network across the Potomac River allows data center developers to pursue projects in places with “a little bit more open space” while keeping latency low, Schulz said.
“That’s expensive infrastructure,” Mann said of the QLoop fiber-optic ring. “And it goes a very long way for tenants.”
According to McBride, the Atmosphere CEO, the company “has secured interest from a hyperscale tenant” for the Dickerson campus, but he said he can’t name the company due to a confidentiality agreement.
According to the International Data Corp., hyperscale data centers occupy at least 10,000 square feet of space and contain at least 5,000 servers that can use more than 100 megawatts of power.
The QLoop project, originally slated for completion in 2023, has been characterized by stops and starts since its July 2022 groundbreaking.
Between August 2022 and February 2024, founding developer Quantum Loophole received more than 80 Maryland Department of the Environment citations for violating state regulations during its construction of the fiber-optic project in Montgomery County, according to reporting by The Frederick News-Post.
TPG Real Estate, the project’s main investor, ultimately sued to have Quantum Loophole removed from both the QLoop project and Quantum Frederick, a related data center campus under development in Frederick County at the former site of an Alcoa Eastalco aluminium smelting plant.
As part of an out-of-court settlement between the partners in December 2024, Quantum Loophole agreed to step back from both projects. TPG appointed Catellus, a California-based company, to lead development going forward.
Catellus did not respond to Bethesda Today’s multiple requests for comment about the status of the QLoop project in Montgomery County.
Proposed zoning text amendment
The issue of zoning has become more complicated in recent months as the County Council considers legislation to limit where data centers can be built.
According to planning officials, under the county’s existing zoning ordinance, data centers are categorized as communication facilities that can be built in any zone with the approval of the county Office of Zoning and Administrative Hearings.
A zoning text amendment introduced by council President Natali Fani-González (D-Dist. 6), Balcombe and Councilmember Laurie-Anne Sayles (D-At-large) in January would restrict data centers to the county’s industrial zones. It also would create new regulations related to noise, emissions and distance from residential areas.
According to McBride, Atmosphere “generally supports” the criteria in the proposed zoning text amendment. He notes the company has requested changes that would allow data centers to “maintain lighting as a necessary operational feature for employee and site safety” and to install metal fences “to secure data centers and the sensitive information they store.”
As part of their review of the proposed zoning text amendment in February, Montgomery County Planning Board members called on the council to recognize that not all data centers are equal in size and potential impact on their surrounding communities.
County planners are aware of four data centers in the county. Two are in Silver Spring, one is in Rockville and another is in Germantown. The four vary in size from an 8,000-square-foot center in an office building to a 214,000-square-foot standalone data center building in White Oak, according to a Montgomery Planning analysis.
The proposed data center campus in Dickerson would be larger than any of the county’s existing data center facilities. But the campus would still be dwarfed by the Quantum Frederick campus north of Montgomery County near Adamstown, where more than a dozen data centers are being developed on 2,100 acres.
A total of 3,200 acres in Montgomery County is zoned industrial, according to planning documents. The average industrial property size is about 3.6 acres.
Taken in combination with the property setbacks proposed under the zoning text amendment, county planners say the relatively small size of Montgomery County’s industrial properties means “few, if any” apart from the Dickerson site would meet the criteria for data center development.
Potential moratorium
Still, residents are wary of the possibility of more data centers in the county.
During a series of public meetings earlier this year, dozens expressed concerns about the possible environmental, health and economic impacts of the proposed Dickerson data center campus.
Some have called for a temporary moratorium on data center development in the county — a measure County Executive Marc Elrich (D) says he would only pursue with support from the council.
Elrich is in the final months of his second four-year term as county executive. He cannot seek re-election this year due to term limits.
Whether to impose a moratorium on data center development and for how long has become a point of contention among the candidates vying to succeed Elrich.
Two of the three sitting councilmembers in the race — Evan Glass and Will Jawando (both D-At-large) — have expressed support for the concept of a data center moratorium, with Glass favoring a six-month pause and Jawando saying he would support a two-year delay.
Councilmember Andrew Friedson (D-Dist. 1), who is also seeking the Democratic nomination for county executive, has not expressed support for a moratorium. He says data centers in the county should bring their own clean energy sources, a position on which he is aligned with his primary opponents.
If the next county executive does pursue a temporary moratorium on data center development, it likely would not apply to projects that already have county planning approval.
McBride, the Atmosphere CEO, told Bethesda Today that Atmosphere expects Montgomery Planning to complete its review of the company’s latest application “as early as July 2026.” He did not provide an estimated timeline for when construction on the proposed data center campus could begin.
“Specific project scheduling details are still being finalized,” McBride said. “What we can say is that Atmosphere is focused on moving efficiently through the county’s approval process and delivering the project in a timely manner once approvals are secured.”
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Originally published at Bethesdamagazine