ONTHEGRID

ONTHEGRID Data centers flock to Williamson County for access to power and affordable land

In February 2024, then-County Judge Bill Gravell made a bold prediction after wrapping up a briefing to Williamson County commissioners about a recent trip to South Korea.

It was an aside comment unrelated to the visit fostering business relations and instead focused on the next wave of economic development in the county tied to emerging technologies.

“We are seeing tremendous movement in the data-processing center world,” Gravell said during the Feb. 6 meeting of the Commissioners Court. “And I think we will see in all our cities in Williamson County in the next year to year and a half – maybe two years – billion-dollar facilities in each of our cities.”

Nearly two years later the statement from Gravell, who now holds a regional post with the U.S. Small Business Administration, turned out to be prescient as data-center developers flock to the areas both north and south of Austin.

The quest for cheap land and a ready source of electricity to fuel the large facilities are the draw with a concentration in Central and North Texas.

There are at least 20 data center projects in the works across the Austin Metropolitan Statistical Area stretching from San Marcos to Georgetown, according to reports.

While the vast, super-cooled warehouses of computer servers don’t provide a lot of jobs once they are operational, they provide two major economic advantages. The building projects fund construction jobs through national and local contractors and subcontractors. And, with an average price tag of more than $1 billion, even with tax incentives they increase the taxable value of the property for cities, counties and school districts.

Current and proposed projects in the Austin area are valued at about $25 billion, according to the Austin Business Journal.

The need for data centers is driven by the explosion of artificial intelligence, or AI, applications that are becoming a part of everyday life. From asking a search engine such as Google or Bing the price of cotton to having an AI assistant write a job resumé, the evolving technology demands more processing power and thousands of acres of mostly farmland across the nation are giving way to vast computer-server complexes.

TEXASISTHEDIGITALFRONTIER

“America’s next frontier of (AI) is building right here in Texas,” according to an email from Gov. Greg Abbott’s office, which oversees the Texas Economic Development & Tourism Office. “The state’s high-tech sector has long been a major player in the U.S. economy and Texas is now poised to lead in new advanced technologies, notably AI and data centers.”

The state is ranked fourth in the nation for the number of total AI-related job postings. The governor’s office projects that investments in AI will lead to a 27% increase in related jobs over the next decade.

The state has touted its ample available space and pro-growth regulatory environment as two of the reasons Texas has outstripped Northern Virginia for construction of facilities with colocation power, which are buildings supplied with heavy-duty megawatts of electricity that are rented to companies to run their data processing servers. Such locations usually have several tenants of varying sizes.

To put the 1,191 megawatts of colocation power underway in the state into perspective, that is enough electricity to simultaneously power about two thirds of all households in Williamson County or more than 12,000 Hutto Memorial Stadiums worth of Friday night lights.

Giant tech companies need enough power for processing to have their own facilities. For example, Apple is building a 250,000-square-foot center in Houston, Facebook and Instagram parent Meta is putting a $1.5 billion operation in El Paso while Google has multiple locations in the Texas Panhandle with a commitment of $40 billion in Midlothian.

The biggest single investment is for Project Stargate, a $500 billion initiative with 10 to 20 data centers on an 895-acre campus in Abilene. The project was granted to SoftBank, OpenAI and Oracle, whose chairman is a major financial supporter of President Donald Trump.

The most recent data from the governor’s office has the number of data centers in the state at 279 as of September 2024.

While Dallas ranks as the top market in the state and third on the planet for the number of data centers, Central Texas is coming along fast, and Williamson County is getting a big share of that growth.

Here’s a roundup of what we know is coming to Wilco as part of the AI boom:

SKYBOX/PROLOGIS

The Skybox Datacenters and Prologis Inc. project on 159 acres of the Hutto Megasite is well underway and could eventually include nearly 4 million square feet of data center space over several buildings. It is the furthest along in construction and one of the largest investments with at least $10 billion in capital expenditures.

The company is in the planning stages for a second campus of 140 acres just to the west of the current site.

In November, the company requested a zoning change from Round Rock to allow it to build a data-center campus in Round Rock on Old Settlers Road. Skybox and Prologis also have a campus in Pflugerville.

BLUEPRINTDATACENTERS

A development from Austin’s Blueprint Projects LLC first came to light in the summer of 2024 when it bought 52 acres at 1601 E. MLK Jr. Blvd. from the Taylor Economic Development Corp. and secured a 50% rebate on property taxes for 10 years and the same rebate on local sales-and-use taxes collected on construction materials purchases.

The $1 billion project is slated to have 135,000 square feet of space for data-center tenants across three buildings and includes a power substation to handle up to 60 megawatts.

The project raised the ire of some nearby residents a year later when the Taylor Press reported an update on the project that included initial rezoning approval from the industrial designation held by the land for two decades to be an employment center.

Residents rallied at a later City Council meeting but were unable to stop the project. The group moved forward with a lawsuit despite assurances from city officials and developers that it would use a closed-loop system that uses less water than traditional data centers, wouldn’t increase traffic with only about 30 employees and was sourcing its electricity separate from Taylor’s supply.

The Taylor EDC had held the land for development for years. But residents such as Pamala Griffin, who testified in court, contended the previous property owner let them play there as children and had always intended that it one day become a public park.

A temporary restraining order that stopped any development was lifted by a 395th state District Court judge in Georgetown and the case dismissed.

Blueprint also is developing a much smaller project in Georgetown that would provide 10 megawatts to a 45,000-squarefoot data center building in the first phase at Westinghouse Road and Blue Ridge Drive.

KDC

Dallas developer KDC is seeking approval from Taylor to construct data centers on 220 acres near the Samsung Electronics Co. Ltd. semiconductor foundry where power and water infrastructure are already in place.

Dubbed “Project Comal,” the KDC endeavor expects to have tenants that would use up to 360 megawatts.

A split vote by the Taylor Planning and Zoning Commission in mid-November, however, is sending the project to the Taylor City Council without a recommendation to be classified as an employment center, in part because of some of the same concerns that had Blueprint neighbors upset.

The commission did not have a quorum. The council is scheduled Dec. 11 to make a decision of KDC’s employment center request, which comes along with some development advantages. Most data centers only create a few dozen permanent jobs in maintaining the servers and their environs.

COLOVORE

California company Colovore is working on a 180,000-square-foot data center in Hutto near the intersection of U.S. 79 and Texas 130. The $500 million project could start construction early next year.

HIGHLANDRESOURCESINC.

Between Interstate 35 and Old Chisolm Trail in Round Rock, Highland Resources Inc. is developing three tracts of land that could include data centers, but the company hasn’t released any more specific details about the project on the company’s website.

AMAZON.COMSERVICESLLC

Plans are still tentative for an Amazonowned site where Hester’s Crossing Road ends at CR 172 in Round Rock. The developers have city approvals for a warehouse and distribution center that could include a data center and power station, the Austin Business Journal reported.

The Amazon site is the farthest west in Williamson County before the terrain gives way to rolling hills and pricier land.

Because data-center tenants need massive amounts of power and water to run and keep the server rooms cold for maximum efficiency, they have come under fire nationally, especially by environmentalists and ratepayers who fear their utility costs will increase along with demands on the power grid.

Some data centers, however, are moving to recirculated water systems that fill the cooling units one time and then use the water in a continuous cycle, as in the proposed Blueprint center.

East Williamson County has received serious consideration for so many data center projects because the $17 billion Samsung Austin Semiconductor fabrication plant in Taylor brought with it a deal with Oncor Electric Delivery Co. The Dallasbased company has grown well beyond its North Texas service area to become the fifth-largest electric utility in the nation.

Oncor’s deal to supply power to Samsung allowed it to bring in the infrastructure to the surrounding area to power the numerous companies moving in, including the data centers. The company uses diverse sources to produce electricity including solar farms near Waco and one in the works in San Antonio.