MANASSAS, Va. – A bank tenant inside a newly completed data center in Manassas has triggered a sweeping local tax exemption, upending financial expectations and leaving city officials blindsided.
At the April 30, 2025, Manassas City Council meeting, Commissioner of the Revenue Tim Demeria revealed that a tenant inside the new Brickyard data center, operated by Digital Realty Trust, had filed paperwork identifying itself as a bank. Under Virginia Code §58.1-1202, banks are exempt from local Business, Professional and Occupational License (BPOL) taxes and the business personal property taxes that typically bring cities millions in revenue from data centers.
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MANASSAS, Va. — A bird caused a power outage at UVA Prince William Medical Center on Tuesday, April 29, 2025, marking the second disruption to the city’s electric service in less than a week and raising new questions about the reliability and cost of Manassas’ electric utility.
City officials said the bird came into contact with utility lines near the hospital, damaging a transformer. The hospital, which has three backup power options, quickly switched to an alternate source, restoring power soon after the incident. However, the hospital later experienced a separate internal breaker trip, leaving one building without electricity for a short time.
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Manassas is preparing to tap into $700,000 in state funding to clean up petroleum-contaminated soil beneath the former Manassas Ice and Fuel Company, Inc. (MIFCO) site. This will pave the way for a second public parking garage and a long-sought hotel development in the heart of downtown.
City leaders recently purchased the former MIFCO property next to City Hall for $3.1 million. Once home to an oil company, the site will eventually house a new multi-level parking garage—a critical component in revitalizing the city’s hotel plans following the 2023 demolition of the Old Towne Inn, which the city acquired for $5.75 million.
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A push by Councilmember Sonia Vasquez Luna to raise the business computer equipment tax rate met resistance Monday night, as the Manassas City Council instead chose to maintain the current rate of $2.15 per $100 of assessed value.
Vasquez Luna proposed aligning the computer equipment tax, data center tax, and personal property tax (vehicles) at a uniform $3.50 rate, saying it would offer consistency and potentially allow the city to reduce the tax burden on vehicle owners.
“For me, it will be $3.50 for each one of them,” Vasquez Luna said. “And it’s an opportunity to lower the [rate] for personal property.”
But several council members pushed back, expressing concern that such an increase would disproportionately hurt small business owners.
“I’d like to keep the computer tax at $2.15,” said Councilmember Teresa Coates Ellis. “It sends a bad message to small businesses.”
Councilmember Ashley Hutson agreed, noting that large institutions like Lockheed Martin and Micron may be impacted, but so would local startups without a threshold to shield smaller firms.
Ultimately, the council chose to keep the computer equipment tax rate at $2.15 while raising the data center tax rate to $3.60 and keeping the vehicle tax at $3.60. Staff may revisit adding a threshold in future budget cycles, taxing only businesses with a certain minimum amount of computer equipment.
Budget Conversations Continue
The computer tax debate was part of a broader discussion on the proposed fiscal year 2026 budget, with the Council needing to approve maximum advertised rates before public hearings.
Among other key items:
Commercial & Industrial Tax Under Review
The council heard a presentation on a potential 12.5-cent Commercial and Industrial (C&I) property tax that could fund new road construction or transit routes. The measure could help Manassas qualify for additional Northern Virginia Transportation Authority (NVTA) funding, but the council opted to delay consideration until future fiscal years.
Tax Relief for Elderly and Disabled
Council members signaled support for raising the income eligibility threshold to $60,000 for senior and disabled residents seeking real estate tax relief. That change will be implemented through a separate ordinance in FY 2027.
Utility Rates May Rise
Staff recommended an 8.5% increase to water, sewer, and electric rates, citing rising operating costs and the need to maintain the city’s AAA bond rating. Some members, including Vasquez Luna, objected to the size of the increase and called for more analysis of capital spending.
The council will revisit the utility rate issue at its April 7 work session, where utility staff will be present to answer questions. A more minor 5% increase is under consideration as a potential compromise.
To stay on schedule, the city must advertise all maximum tax and utility rates by April 11, ahead of formal budget adoption later this spring.
Members of the Manassas City Council voiced support for efforts to keep teacher pay competitive with neighboring Prince William County Schools during a joint meeting with the city’s School Board on March 26, 2025—even as the city faces tighter fiscal limitations and a far smaller student population.
The meeting came one day after the School Board adopted its overall budget for the next fiscal year on March 25, which includes $60.9 million in funding for Manassas City Public Schools. While the budget already includes a 5.5% average pay raise for all school employees, School Board members said an additional $1.7 million would allow them to offer a 7% increase—matching the raise announced by Prince William County Schools.
The city council must approve the school division’s budget, as the schools do not have taxing authority.
Prince William County Schools serve more than 90,000 students and benefit from hundreds of millions of dollars in annual revenue from 44 operating data centers. Manassas serves approximately 7,700 students and has just a fraction of that revenue capacity.
“We don’t have that kind of revenue cushion, but we still know the value of investing in our educators,” said Councilman Tom Osina. “We need to be competitive not to be like Prince William, but to retain our best teachers.”
Budget Breakdown
Manassas City Public Schools’ adopted FY 2026 budget totals $184 million including:
- $151.4 million in operating funds
- $84.1 million from state aid
- $60.9 million from the city
- $4.3 million in federal funding
- $930,000 in debt service
Of the total, $5.2 million is dedicated to compensation increases, with an additional $1 million to help cover rising employee health insurance premiums. The division also added a longevity step increase for veteran staff members and reclassified Certified Nursing Assistants to better align with regional pay scales.
According to the school division, Manassas school employees have seen a cumulative salary increase of 28.59% over the past five years.
Unfunded Priorities
If additional funding becomes available later this spring, the School Board said its top priorities would include:
- A 1.5% raise to bring the total increase to 7%
- Continuation of free meals for all students under the federal Community Eligibility Provision (CEP), which is currently at risk of being cut
- Paid parental leave for staff
- Restoring $1 million in intervention services cut from the FY26 budget
- Adding more ESOL teachers and a social worker
The school system’s ESOL population has steadily grown, with 55% of students classified as English learners. Council members encouraged school officials to track and share student progress data to strengthen future funding requests.
Central Office Purchase and Alternative Education Pilot
School officials also discussed plans to use $12.75 million from the division’s fund balance to:
- Purchase 8700 Centreville Road, which currently houses the school division’s central office
- Launch a $2 million alternative education pilot program for students in grades 5–12 who face behavioral or attendance challenges
- The pilot program would provide small class sizes, counseling, social work services, and a more individualized learning environment, with the goal of reintegrating students into traditional schools. About 40 to 60 students are expected to participate.
While council members agreed to move forward with these proposals, they cautioned that sustaining the alternative education program in future years may be difficult without new revenue sources or additional state support.
School Meals and Federal Uncertainty
The division is also bracing for potential cuts to federal funding that supports free breakfast, lunch, dinner, and snacks for all students. In February 2025 alone, Manassas schools served:
- 36,630 breakfasts
- 87,508 lunches
- 973 dinners
- 2,411 after-school snacks
Superintendent Dr. Kevin Newman said the division may need to begin the new school year without knowing whether federal reimbursements will continue.
Old Dean Building: Clear Path to Demolition
During the meeting, officials also addressed the future of the old Jenny Dean Elementary School building. School Board members expressed concern about whether they were required to propose a reuse plan under a prior Special Use Permit (SUP). City Council members clarified that there is no appetite for preserving the building and that the SUP requires its demolition within 18 months of the new school opening.
“This is not a fight. We’re not trying to save the building,” said School Board Chair Suzzane Seaberg. “But we don’t want the public to expect something we can’t deliver.”
City officials emphasized that any final decisions about the historic site, including the relocation of the historic cottage, will follow an archaeological survey and community input process.
The City Council is expected to finalize school funding decisions by May 12, pending final state revenue figures and unresolved federal budget issues.
Despite limited resources, city leaders say their priorities remain clear.
“We may not have the revenue Prince William does, but we believe in our students and in the educators who guide them. This budget reflects that,” said Mayor Michelle Davis Younger.
Drivers should expect delays on Route 28 (Centreville Road) as the Virginia Department of Transportation begins repairs to the bridge over Bull Run, located at the Fairfax County and Prince William County line.
Weather permitting, the work will involve single-lane closures between March 31 and April 24, during daytime hours:
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More than a year after the city demolished the Olde Towne Inn, efforts are underway to improve the now vacant lot in the heart of downtown Manassas. The city recently announced a $160,000 project to convert the space into a temporary parking lot, a move that comes as plans for a new hotel on the site have stalled.
The Olde Towne Inn, which stood at 9405 Main Street, was purchased by the Manassas Economic Development Authority for $5.75 million in February 2023. The motel, a downtown staple for decades, was razed in November 2023 to make way for a new hotel or mixed-use development. However, financing issues and parking constraints have complicated efforts to attract developers.
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Veteran Tax Relief Sparks Heated Debate
During the March 17 meeting, comments from Commissioner of the Revenue Tim Demeria ignited strong reactions from residents and veterans. Demeria raised concerns about the increasing cost of tax exemptions for 100% disabled veterans, pointing out that some beneficiaries own high-value homes and luxury vehicles. His remarks led to backlash from veterans, including Zach Murphy, who viewed them as dismissive of their service and sacrifices.
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Council approved the request based on nine conditions, none of which were based on parking, an issue in downtown Manassas. Pathway is anticipating a maximum capacity of 150 people each Sunday and must provide 38 parking spaces if one parking space is granted per four seats in a car. On-site, there are only 22 spaces available.
Audra Ovalle, a planner with the city, said because of the building's zone, there is no parking requirement.
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On March 5, the Manassas City Council held a closed-door session to discuss "terms and conditions for the disposition of publicly held real property" located at Nokesville Road and Godwin Drive, where the baseball complex sits. The meeting was held under Virginia Code § 2.2-3711(A)(3), which allows real estate negotiations to be discussed in private. Following the closed session, the council made no public statements regarding the discussion, leaving uncertainty about the future of the property.
In 2021, the City of Manassas granted Micron Technology an option to purchase the complex as part of the company’s potential expansion plans. The agreement allowed GMBL to continue using the fields for up to 24 months after a sale while the city explored alternative locations for the league. However, Micron never exercised the option, and the baseball league has remained in place.
