2020 data center legislation brings first-of-its-kind facility to Maryland

Q&A with Quantum Loophole

During the 2020 legislative session, the Maryland Chamber of Commerce established a coalition focused on data centers, a group of 60 business organizations and other interested stakeholders united in support of Senate Bill 397: bipartisan legislation that would provide a sales-and-use tax exemption for the sale of equipment used at a qualified data center.

The coalition knew that if the bill passed, it would level the playing field with neighboring states, attract data center business to Maryland, create jobs, provide a financial boost to local governments and support the state as a leader in cyber innovation and investment. As a result, the coalition developed and implemented a comprehensive advocacy strategy, and our hard work paid off. The Maryland General Assembly passed SB 397 nearly unanimously, and it became law in May 2020.

Sylvia Kang, vp of real estate, Quantum Loophole

Enter Quantum Loophole, Inc. In June 2021, they acquired the enormous site formerly known as the Alcoa Eastalco Works in Frederick County, Maryland. On this site, Quantum Loophole plans a first-of-its kind, environmentally friendly data center campus.

We asked Quantum Loophole’s Sylvia Kang, vice president of real estate, a few questions about this exciting new project and what it means for Maryland. Here’s what she said:

Maryland Chamber of Commerce (MDCC): Quantum Loophole announced plans to develop Maryland’s first gigawatt scale data center community in Frederick. What factors went into selecting the location for this project?

Sylvia Kang (SK): The primary driver was the sales and use tax exemption for data centers that became effective July 1, 2020.  As soon as we learned of the exemption, our next stop was the

Maryland Economic Development Council. The EDC was ready to help and directed us towards Frederick and Montgomery County after learning of our requirements and limitations – a site that could accommodate a 10-year growth plan in an industrial area, provide competitive utility rates, and were endowed with the resources of energy and recycled water. Alcoa Eastalco met all those requirements and enabled QL to meet its self-imposed goals of greening the data center footprint. 

MDCC: How important was the passing of SB 397, the sales and use tax exemption, when considering Maryland as a potential site?

SK: Virginia passed a data center exemption in 2010 that opened the doors for the datacenter world to enlarge their footprint and grow within the state.  Very few crossed state lines to Maryland or West Virginia. Without Maryland passing the data center legislation, Quantum Loophole would not have selected Maryland. With the right care and controls, Maryland may not only realize the same investment potential but develop with less carbon intensity and impact to the surrounding environment.

MDCC: This project is the first-of-its-kind in Maryland. What value will it bring to Frederick and Maryland as a whole?

SK: This site was formerly known as the Alcoa Eastalco Works property and is identified as a growth area in the Livable Frederick Master Plan (LFMP). Quantum Loophole is planning a first-of-its kind master planned data center community focused on greening the data center world. The site is uniquely endowed with resources to enable owners to meet their goals of a lighter carbon footprint – converting a brownfield, enabling a generator-less solution for backup power and using recycled water for its cooling requirements. The Quantum Frederick project represents a significant investment in Maryland and will benefit the regional economy with opportunities for local businesses along with the creation of well-paying jobs.

The planned community is also unique in that Quantum Loophole will invite colocation providers, hyperscalers and enterprise owners to all participate through land ownership within the park that will in the short-term bring well-paying jobs to the community and large investments that increase the real property tax base, but minimally impact county services. In the long-term, this data center will provide a continuous base of construction jobs, further investment, and seed the development of high technology companies.

Learn more about the Maryland Chamber’s data center advocacy efforts here.

Learn more about Quantum Loophole’s Alcoa Eastalco project here.





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