Blackstone-owned QTS filed notice on July 2 that it was withdrawing its appeal to the Supreme Court of Virginia, ending its pursuit of the Prince William Digital Gateway, according to Bloomberg. The withdrawal closes out a proposal that, at full buildout, would have covered 2,100 acres in Prince William County with as many as 37 data center buildings and more than 22 million square feet of space, making it, by most accounts, the largest proposed data center campus in the world.
The project's collapse traces back to a procedural defect rather than a market or financing decision. The Prince William County Board of Supervisors approved the rezoning in December 2023 after a 27-hour public hearing, but a lawsuit from the Oak Valley Homeowners Association and a parallel case brought by the American Battlefield Trust argued the county's public hearing notices had not run the required six days apart in local newspapers. A Prince William Circuit Court judge voided the rezoning on those grounds in August 2025, and a unanimous three-judge panel of the Virginia Court of Appeals upheld that ruling on March 31, according to Fox 5 DC.
A Public Notice Defect Unwound a Three-Year Entitlement
The county itself withdrew from the litigation shortly after the appellate ruling, having already spent close to $2 million defending a rezoning it no longer contested. Co-developer Compass Datacenters, backed by Brookfield Asset Management, dropped its own appeal in April, leaving QTS as the sole party still pursuing the case at the Virginia Supreme Court. Attorney Chap Petersen, who represented the homeowners association and the American Battlefield Trust, said the outcome reflected the strength of a claim the plaintiffs had pressed since January 2024, when the site's proximity to Manassas National Battlefield Park first drew organized opposition.
What the Exit Signals for Site Selection Teams
Blackstone acquired QTS in 2021 and holds more than $150 billion in data center assets globally. The Digital Gateway decision also comes as Blackstone continues reshaping parts of its digital infrastructure portfolio. The firm has separately pursued sales of minority stakes in several Virginia data center assets, according to a report from MSN, while launching an initial public offering in May for Blackstone Digital Infrastructure Trust, a vehicle designed to acquire stabilized, income-producing data centers rather than carry greenfield entitlement risk through years of litigation. The outcome illustrates that entitlement diligence extends beyond utilities, environmental constraints, and transportation access. Development teams increasingly need to account for procedural compliance and litigation risk alongside traditional site selection factors.
