San Marcos Proposes Data Center Project Despite Grid Concerns

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In a move that highlights the ongoing balance between economic development and infrastructure sustainability, San Marcos, Texas, is considering a significant rezoning project to pave the way for a new data center. The plan, proposed by Armbrust & Brown PLLC on behalf of Highlander SM One LLC, entails transforming a 199-acre site from its current Conservation Cluster classification to Light Industrial zoning. Additionally, it includes annexing approximately 53.57 acres, a decision that was green-lighted by the San Marcos City Council in February. The forthcoming rezoning decision is set for April. Originally, the site was intended for single-family homes as part of a zoning plan established in 2022, but these plans were abandoned in favor of the data center after the residential development failed to materialize.

Economic and Infrastructural Implications

Proponents of the data center project argue that it promises a lower traffic footprint compared to residential development and is consistent with the existing landscape, particularly given its proximity to the Hays County power plant. This proposed facility is to be equipped with a closed-loop water system, which will drastically reduce wastewater output—a significant advantage given the traditionally high water usage associated with data centers. Advocates also note the limited demands the project will place on infrastructure and emergency services, which is a significant selling point for city planners. Further sweetening the proposition, the data center is expected to generate substantial tax revenue for the city, providing an economic boost that could support other local initiatives and services.

Concerns and Opposition

Not everyone is convinced about the new facility. Amanda Rodriguez, a City Council member, has expressed concerns about the strain it could place on the already stressed electrical grid, which relies heavily on natural gas. Her concerns are rooted in the broader issue of grid reliability, a problem that has troubled much of Texas in recent years, especially during extreme weather. Despite her valid points, the annexation measure passed with a 5-2 vote, showing strong yet not unanimous support within the council. This project is distinct from CloudBurst’s high-profile data center initiative, slated for 2026, which will also depend on gas power and thus raises further concerns about local infrastructure capabilities.

While the San Marcos data center project promises economic benefits and lower traffic, it comes with challenges. Balancing economic development with the need to maintain reliable infrastructure will be crucial. Stakeholders need to weigh potential tax revenue against demands on the electrical grid. Whether the economic benefits will outweigh the risks remains to be seen.

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