Note: This is Part 2 of a two-part series on the Land Use Matrix and its impact on commercial development. Part 1 focuses on the City of Frederick and can be viewed here.

In our previous post, we raised concerns about how local zoning is increasingly favoring large operators over small businesses and regional investors.

Since then, Frederick County officially approved the 2,612 acre Critical Digital Infrastructure (CDI) Overlay Zone-a, a decision that could reshape the County’s economy for decades and one that limits the development of Data Centers to within the CDI.

That means it’s time to shift the conversation.

Yes, zoning matters. However, we must also discuss how the County manages the revenue these projects will generate and how that can benefit every property taxpayer in Frederick.

Frederick Just Unlocked a New Revenue Stream

The CDI Overlay Zone allows for up to 2,612 acres, centered around the long-zoned industrial Eastalco site, to be developed into data centers.

This isn’t hypothetical.

There have been 5 transactions since 2021, totaling $576 million in private investment. These sales generated over $54 million in one-time recordation taxes for the County, and that doesn’t even include the most recent $99 million deal.

To put that in perspective: it would take 8,000 new homes priced at $500,000 to match the same revenue from just those five data center land sales.

And that’s just the beginning.

$215 Million a Year. Every Year.

Once stabilized, the projected annual tax revenues from the data center campus, Quantum Frederick, is over $215 million per year.

Currently, Frederick County generates about $500 million annually in residential property taxes.

That means the Data Center campus could deliver nearly half of the tax revenue that currently falls on homeowners.

This raises an obvious question:

Why not offer some relief to Residential property tax payers from escalating property tax bills due to increased property tax assessments?

It’s Time to Adopt the Constant Yield Property Tax Rate

With this new revenue stream secured, it’s time for the County to adopt the Constant Yield Property Tax Rate (CYTR).

What is CYTR?

The Constant Yield Rate is the property tax rate that would generate the same amount of tax revenue as the prior year, regardless of rising property assessments. It keeps your tax bill stable-even when your home value goes up.

In simple terms:

CYTR means no increases in your property tax bill just because your assessment jumped.

A Fair, Financially Responsible Shift

Let’s be clear: this isn’t about cutting services.

With millions already collected from land sales and hundreds of millions in future annual revenue expected from improved properties, the County can hold the line on residential tax increases without sacrificing schools, roads, or public safety.

In fact, the data center overlay zone can help fund infrastructure upgrades, agricultural preservation, and affordable housing investment, while reducing reliance on homeowners.

Here’s how it breaks down:

  • Five parcels have already generated over $54 in one time recordation taxes and over $3.5 million per year in property taxes (not including the latest $99 million sale).
  • That number will increase annually as improvements are completed and reassessed.
  • These 5 properties generate the equivalent of 600 homes’ worth of annual residential property tax revenue.

This Isn’t Just Smart. It’s Fair.

For decades, Frederick homeowners have carried the weight of County revenue.

Now, we finally have a way to share the load without adding to congestion, straining schools, or increasing public safety costs.

Data centers are infrastructure-light and revenue-heavy. They bring construction jobs, permanent employment, and long-term tax value, with less daily disruption than any other primary use.

If the County wants to create a more “Livable Frederick,” then this is a moment to act with courage, not cling to the status quo–this is the way we have always done things therefore, this is how we will do it again.

It’s time to reassess the assessment methodology!

A Call to Frederick County Leaders

We applaud the County for passing the CDI Overlay Zone. It was the right move. But now that we’ve unlocked this tax base, residents deserve to share in the benefit.

Let’s stop shifting the burden to homeowners every time assessments rise.

Let’s recognize that growth has finally brought an opportunity to ease that burden, without reducing services.

Let’s adopt the Constant Yield Property Tax Rate.

Need Help Navigating What This Means for Your Property?

Whether you’re a landowner trying to understand your zoning options or an investor exploring Frederick’s evolving tax landscape, VCRE is here to help.

Let’s build smarter. And let’s move forward together.