The unanimous vote came after no one from the community spoke during a public hearing on the matter.
Before Tuesday's change, data centers were not allowed in the city under the code. After receiving inquiries from data centers, Larking first briefed the council during a February work session.
The code change to allow data centers in the city limits was blessed by the Danville Planning Commission last month.
Larking asked for one clarification on the resolution passed on Tuesday evening. Instead of simply stating that data centers would not be allowed within industrial parks, Larking asked that wording be changed to specify the three sites in Danville: Airside Industrial Park, Cyber Park and Riverview Industrial Park.
There was no discussion among council members prior to approval.
"The City has received several inquiries from large data center operators requiring electric capacity ranging from 10 to 200 megawatts," Larking wrote in a February memo to the council
That much power could only be met in limited parts of the city, and may mean working with power providers upstream.
The city has developed something it calls an energy services agreement that would govern such loads, essentially protecting the city from infrastructure costs if a development backs out.
Council also held a public hearing on raising the tax rate for data centers, but no vote was taken on that Tuesday evening.
Right now, the tax rate for data centers is 25 cents for $100 of assessed value, which was updated in 2018, despite the facilities not being allowed in the city at the time. The change would raise the tax rate to $1.20.
"This section created a separate tax classification for computer equipment and peripherals used in qualifying data center facilities," the proposed change states.
Danville resident Frank Leist was the only person who spoke during the hearing on the rate change. He advocated for keeping the tax rate low as a competitive advantage to neighboring localities.
Leist referenced an issue at the state level that could slash a sales tax exemption for data center equipment. That squabble is the reason the Virginia General Assembly has yet to settle on a budget.
"We are still beating out other places around us," Leist reasoned to the council if the state exemption is eliminated.
He said Danville should not raise the tax rate and leave it at 25 cents.
"We don't have any data centers in Danville," he said. "Raising it will not bring in any money right now, this moment."
He suggested leaving it low to lure data centers, and once operations are going, then the tax could increase.
This is separate from a project by a data center developer at the Southern Virginia Megasite at Berry Hill, which is located in Pittsylvania County. That three-phased endeavor could ultimately result in a $73 billion investment and close to 2,050 jobs over a term of three decades.
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