The former Santander operations center at 5201 Rufe Snow Drive is being explored for redevelopment into a data center | Image via Google Street View

North Richland Hills Mayor Jack McCarty opposes data centers near residential areas as city officials review rules for projects tied to the artificial intelligence race.

Data centers power cloud computing, online banking, health care records, defense technology, and AI tools. The White House’s 2025 AI Action Plan says America is “in a race to achieve global dominance in artificial intelligence” and identifies building AI infrastructure as one of the plan’s three pillars.

The plan also says America’s path to AI dominance depends on stronger energy capacity and a faster buildout of the electric grid, especially as China expands its own grid.

That national push has now reached North Richland Hills, where city officials must decide where data centers belong and what protections should apply when proposed sites sit near homes.

Mayor Raises Quality-Of-Life Concerns

McCarty made his position known in a June 24 Facebook post after residents attended a meeting hosted by a company exploring a data center project in North Richland Hills.

“I felt it fair to listen to both sides before commenting publicly,” McCarty wrote. “After hearing both sides Data centers near any residential areas in NRH is not what I want for our community.”

McCarty said North Richland Hills began studying data centers before the latest public debate.

“In 2025, both Planning & Zoning and the City Council held publicly posted meetings on the city website and the city hall Facebook page to discuss and adopt North Richland Hills’ first regulations specifically addressing data centers,” McCarty wrote.

He said city leaders acted because local ordinances did not previously treat data centers as a separate use.

“Prior to those changes, data centers were not specifically addressed in our ordinances, and city staff, P&Z, and Council recognized the need to begin establishing regulations for this emerging industry,” he wrote.

McCarty said the City Council has not approved a data center since adopting the 2025 regulations.

“As Mayor I do not have a vote, but based on the research I have personally reviewed, I believe data centers near residential dwellings are not beneficial to contributing to the quality of life of NRH,” McCarty wrote.

Provident Proposal Needs Zoning Change

Provident hosted a June 23 informational meeting for neighbors, nearby businesses, and residents to discuss a proposed redevelopment of the former Santander operations center at 5201 Rufe Snow Drive.

The company proposes to redevelop the property into a 2-story, 330,000-square-foot inference data center, according to the City of North Richland Hills.

The proposed 50-megawatt facility would use closed-loop, variable-speed magnetic-bearing chillers, which the city said require less water and produce less noise than traditional data centers.

The project still needs a zoning change. The city has not scheduled public hearings before the Planning and Zoning Commission or City Council.

McCarty said the June 23 meeting was not a city meeting.

“It was hosted by a company that is exploring a potential data center project and is seeking feedback from residents before any public hearings occur,” he wrote.

City Tightened Rules In 2025

North Richland Hills updated its zoning ordinance in 2025 to distinguish between general data centers and small-scale data centers.

City rules allow a general data center larger than 10,000 square feet on Industrial-zoned property by right. C-2 Commercial property requires City Council approval of a special use permit.

City rules allow a small-scale data center of 10,000 square feet or less on Industrial or C-2 Commercial property by right.

The city said the 2025 update helps prevent data centers from entering North Richland Hills as a “general warehouse” use without city officials or residents knowing the specific facility type.

The ordinance also requires developers to fully enclose cooling, ventilation, generator, and power supply equipment unless city officials determine full enclosure is not mechanically feasible. If city officials make that determination, the ordinance requires a wall or similar barrier and a minimum 100-foot setback from the nearest residential property.

Wuliger Way Project Moves Forward

Another company is building a 12,000-square-foot data center at 6401 Wuliger Way, near Browning Drive.

The site sits at the entrance to a 50-acre industrial park that has operated since the 1980s, according to the city.

State law and city zoning allow the Wuliger Way project because the property already carries an Industrial zoning classification. That means the project does not require a special use permit, public hearing, City Council vote, or neighborhood notification before the city issues a building permit, according to North Richland Hills.

The city said the Wuliger Way project will not use the large amounts of water associated with some traditional data centers. The facility will use immersion cooling with dry cooling integration, with water used only during the hottest days of summer to mist exterior cooling coils.

The project plans to use one 2-inch water meter, which the city described as a standard size for many commercial businesses.

The company does not plan generators at the Wuliger Way site, according to the city. If power fails, operators would shift operations to other company locations instead of using backup generators at the site.

Water, Power, And AI Growth

Data centers have drawn more attention across Texas as artificial intelligence drives demand for computing infrastructure, electricity, and cooling capacity.

American Rivers, an environmental advocacy group, says a single large data center can consume up to 5 million gallons of water per day, roughly the daily water use of more than 15,000 homes. The group also says some facilities can affect local water supplies through cooling systems, electricity demand, and stormwater runoff.

Other organizations argue those concerns can overstate the impact of modern facilities.

The Goldwater Institute, a free-market public policy organization, says data centers account for less than 0.05% of total U.S. freshwater withdrawals nationwide. The group argues that modern data centers can serve as steady grid customers and help fund infrastructure costs when developers pay for their own connections and upgrades.

North Richland Hills said data centers across Texas must now comply with Senate Bill 6, which took effect in June 2025. The city said the law requires data centers to pay significant fees to the state and 100% of the costs to connect their facilities to the power grid.

Gov. Greg Abbott also directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas on June 10 to take steps to protect residential ratepayers from data-center infrastructure costs.

“Data centers must operate in ways that reduce costs for residential electricity customers, do not drain water needed for our communities, and take into consideration the needs of our neighborhoods,” Abbott said.

Water concerns have already become a major issue in other parts of Texas.

As previously reported by The Dallas Express, Corpus Christi has faced severe water supply concerns, prompting warnings from former officials about possible economic consequences if reservoir levels continued falling.

Corpus Christi Water said June 23 that its projected Level 1 Water Emergency had moved from December 2026 to September 2027 because of new groundwater production and recent rain.

Data centers also can carry major tax-base implications. A 2025 Tarrant Appraisal District top taxpayer report listed Winner LLC/Winner LLC/Meta Platforms Inc. at No. 1.

North Richland Hills expects more data-center applications, but the city said limited vacant land makes it unlikely to attract the massive “hyper-scale” facilities drawing attention elsewhere.

Future proposals still must meet zoning and building standards. Any proposal requiring a zoning change or special use permit would go before the Planning and Zoning Commission and City Council for public hearings.