Real Estate Photographer in San Marcos, TX

The vote came after an hours-long public hearing that started Tuesday night.

SAN MARCOS, Texas — People packed the chambers of San Marcos City Hall on Tuesday evening to voice their support and opposition for a proposed $1.5 billion data center.

At around 2 a.m. Wednesday, council members voted to reject a rezoning plan for the center after hours of public testimony.

Ahead of the public hearing, a crowd was sprinkled across the outside lawn, listening to music, calling on drivers to honk and holding signs in an effort to spread their message that data centers don't belong in the city.

"The people here who use the river, who are here to live here, who contribute to the community, are going to be negatively impacted by the data center, and it's really only going to assist people far from here, or people who are already benefiting from AI data centers going into communities," said Dan Wolf, who was against the project.

Members of Laborers Local 1095 (LiUNA!) spoke for the project and said it will bring financial stability and a closer commute for workers.

“It's about the families being able to stay in their homes, parents being able to support their children, children and workers being able to build a stable life without having to leave their hometowns to find work,” one member said.

Prior to their decision, council members considered pushing back the vote but instead decided to move forward.

The controversial plan was expected to built a nearly 200-acre data center near Francis Lane, which is southwest of Downtown San Marcos.

The project was stalled last year, but last month, a path was cleared after the city's Zoning and Planning Committee approved the rezoning of the land.

The San Marcos City Council voted 5-2 early Wednesday to deny a request for a land use change that would have cleared the way for a data center southwest of downtown.

When the vote came at 2:14 a.m., the overflow room to the city council chambers roared with cheers.

The 50 or so people who remained in the building represented a small portion of the hundreds who showed up for the vote. The meeting began at 6 p.m., but demonstrators started gathering in front of the city hall at around 3 p.m.

Citizens who showed up to testify were overwhelmingly against the proposed data center. There were 125 people who signed up to speak in the citizen comment section of the meeting, and another 57 who signed up talk during the public hearing portion.

Fort Worth-based Highlander SM One LLC proposed to build the data center on a 200-acre site on Francis Harris Lane between San Marcos and New Braunfels, next to the Hays Energy Power Station. Speakers came from all parts of Hays County, where droughts and water shortages have been felt for years.

“You are either going to greatly harm your relationship with your community or you’re going to buckle down and work with us and come up with an alternative which we are all willing and eager to help you on,” Torrie Martin, who lives on a ranch next to the proposed data center, told the council.

Data centers are large buildings filled with computer equipment that supports things like cloud storage and artificial intelligence and typically use huge amounts of water and energy. Developers had touted the jobs their proposal would bring to San Marcos and made some concessions on things like water use at the site.

Among the citizens who showed up in support of the data center were dozens of union construction workers in reflective orange shirts, who were assured the facility would be built with union labor.

“You have an opportunity to vote in favor of this data center, to generate revenue, to create good, quality jobs on a construction project like this that could last up to five years,” said Matthew Gonzales, president of Laborers’ International Union of North America Local 1095.

Outside of construction jobs, however, there has been limited insight into the number of permanent positions the data center would offer to San Marcos. Still, the $1.5 billion project would have provided tax revenue to the city.

The promise of construction jobs was not persuasive to the vast majority of the people who showed up to register their opposition, each getting three minutes to speak their mind to the council.

“I ask you to envision what your future of San Marcos looks like,” said Melanie Babot, a San Marcos resident. “Is it one … that values natural resources for people, not AI?”

The dismissal of the proposal comes just a day after the Hays County judge, Ruben Becerra, proposed a moratorium on new building permits that require large amounts of water.

Local water managers have also said that the Edwards Aquifer is “not in a great place” and that, if dry conditions persist, the drought could trigger a stage four emergency response period.

This is just the latest setback for this data center development. Last summer the council failed to pass a zoning change that required a supermajority vote. Even with this latest denial, the site’s developer could refile its request again in six months.

San Marcos City Council faces a pivotal decision on a $1.5 billion data center proposal amid recent debate over growth, water use and industrialization impacts.

SAN MARCOS, Texas — A $1.5 billion data center proposal that has divided San Marcos residents is back before the city council on Tuesday, marking a pivotal step in a yearslong fight over growth, water use and industrial development.

The nearly 200-acre project, planned near Francis Harris Lane, stalled last year after council members failed to reach the supermajority needed to approve a rezoning request that would allow a large data center campus on land now mapped for future development and low-density uses. The setback sent the developer back to the Planning and Zoning Commission to restart the process.

Last month, the commission voted to recommend rezoning the property for data center use, clearing the way for the proposal to return to the council agenda. The project calls for a multi-building data center campus on roughly 200 acres off Francis Harris Lane.

Developers say the facility would rely on a closed-loop, water-based cooling system that would use up to 75,000 gallons of water each day and is designed to recycle that water rather than discharge it. They also say sound from the site would be limited to about 75 decibels at the property line through the use of enclosures and other noise-mitigation measures.

Supporters – including labor groups and some local officials – argue the data center could bring construction and tech-related jobs, along with millions of dollars in future property tax revenue for San Marcos.

Opponents, many of whom live near the proposed site, say the project would strain local water supplies, increase demand on the electric grid and accelerate the industrialization of a historically rural area.

Tuesday’s meeting includes a public hearing and a first reading of the rezoning ordinance tied to the data center plan, according to city notices. If the measure advances, a second and final reading is expected on March 3, when council could ultimately approve or reject the project.

SAN MARCOS — 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 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, a key planning step 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, who has been an outspoken opponent, 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 largely 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.

Water and power 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.

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” for residents and had made clear ahead of Tuesday's meeting she would oppose the development.

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

Karoline Leonard joined the Austin American-Statesman in November 2024. Leonard graduated from The University of Oklahoma in May 2024, where she worked in student media as a reporter and news editor and later served as editor-in-chief of OU Daily. She previously interned at the Tulsa World and BusinessDen via the Dow Jones News Fund business reporting program. Leonard hopes that through her reporting she can hold those in power in the technology industry accountable while also making tech news accessible to all readers. She encourages anyone with story ideas, tips or feedback to reach out to her via email.

In a move aimed at trimming the federal real estate footprint and cutting long-term costs, the U.S. government has moved more than 240 acres of underused land in San Marcos out of federal ownership.

The U.S. General Services Administration announced that two former Department of Labor properties next to the San Marcos Regional Airport have been transferred to local entities, with Texas State University and the City of San Marcos now holding title to the land. Federal officials said the transaction reflects a broader strategy to reduce excess property holdings while allowing communities to repurpose land for local needs.

"The successful disposition of these underutilized federal assets in San Marcos demonstrates GSA’s commitment to executing President Trump’s vision. This is a victory for the American taxpayer," GSA Administrator Edward C. Forst said in a statement.

The properties sit east of the regional airport and include two distinct tracts. One covers more than 195 acres and contains a group of buildings near William Pettis Road, while the other is made up of more than 45 acres of undeveloped land. Earlier this year, Texas State University acquired approximately 75 acres from the northern tract, including the existing facilities.

The City of San Marcos later purchased the remaining land, totaling nearly 170 acres, for $1.68 million through a negotiated agreement. GSA said the sale was completed in cooperation with local and federal partners and followed all applicable regulations, allowing the land to be formally removed from the federal property inventory.

Texas State University plans to continue using its portion of the site for the Advanced Law Enforcement Rapid Response Training Center, which provides training to law enforcement officers and first responders from across the country. The center also supports research focused on improving law enforcement responses to active shooter situations.

"We are grateful to the GSA for this thoughtful disposition of federal land, enabling TXST to expand the ALERRT Center, which allows us to serve more law enforcement personnel and first responders nationwide," Texas State President Kelly R. Damphousse said in a statement.

City officials said the land acquired by San Marcos will support future expansion of the San Marcos Regional Airport, which they expect to drive additional aviation traffic and economic activity.

"This land purchase is an important step in supporting the long-term needs of the entire San Marcos community," City Manager Stephanie Reyes said. "By securing this property now, we’re protecting an essential transportation asset, supporting economic opportunity, and ensuring surrounding land uses remain compatible as the city continues to grow."