San Marcos data center plan denied after nearly 9-hour meeting

Six months ago, community backlash helped stall a $1.5 billion data center project in San Marcos. When the project advanced a second time, the outcry only grew.

Hundreds of residents filled San Marcos City Hall’s council chambers, lobby, hallways and front lawn Tuesday evening as the City Council once again took up the proposal. At almost 3 a.m. Wednesday, the council — in an about-face from August — voted 5-2 to deny a preferred scenario map request for the nearly 200-acre data center campus after a heated, nearly nine-hour meeting.

Following the final vote, community members inside City Hall began cheering. Some residents who live near the project’s proposed site, including Torrie Martin, sobbed.

“Oh my god, I can’t believe it,” Martin said after the meeting.

Proposed by Fort Worth-based Highlander SM One LLC, the nearly 200-acre data center campus would be located partly within San Marcos city limits at 904 Francis Harris Lane, near the Hays Energy Power Station and several family-owned farms. The campus would include five buildings, each with a power capacity of about 76 megawatts.

The project’s resurgence came after the San Marcos Planning and Zoning Commission recommended denial last March.

In August, the City Council — after more than two hours of public comment that mostly opposed the development — voted 5-2 to approve measures to annex and rezone the site. That was one vote shy of the supermajority required to move forward over the commission’s recommendation.

Landowners restarted the application process in October. In its second attempt, the Planning and Zoning Commission in January voted 6-2 to recommend approval. 

RELATED: Central Texas emerges as data center hotspot, raising rural concerns

Data centers are large facilities that provide critical infrastructure to support digital activity and the growth of artificial intelligence. They also require large amounts of water and power.

The Electric Reliability Council of Texas, the state’s main grid operator, said data centers will cause Texas energy demand to surge 71% by 2031. Recent research has found that training and using AI could consume more water than the global bottled water industry, largely because of data center operations.

Central Texas has emerged as the top secondary data center market in the country, with at least 55 completed or planned projects between Temple and San Antonio. 

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Earlier this week, Hays County Judge Ruben Becerra said he would bring a moratorium proposal to county commissioners next week in a measure to halt approvals for projects seeking more than 25,000 gallons of water per day — or about 10 million gallons per year — while officials study potential impacts on the local water supply.

“While I have always supported business, I oppose unchecked water usage,” Becerra said in a press conference Monday. “We must pause approvals for high-impact operations. Yes, we must until scientific evidence confirms they will not harm our residents’ water supply.” 

Francis Harris Lane, where the developer had planned to build the data center, is lined mostly with family-owned farms and the Hays Energy Power Station. But the area has become a draw for developers, with three other data center projects already under construction or nearing the end of their approval processes along the road.

Tuesday’s vote marked a reversal of the council’s earlier position on the project. Some members had argued that annexing the site would give the city greater oversight of the project.

Throughout the nearly nine-hour meeting, Place 6 Councilor Amanda Rodriguez held her head in her hands in frustration. 

She said efforts to delay the vote were “torture” to residents. Rodriguez’s vote was the only one locked down ahead of Tuesday, a sure-fire vote against the development. 

As the final vote was announced, Rodriguez again dropped her head into her hands — this time with tears of joy in her eyes.