A proposed $1.5 billion data center campus in San Marcos is moving forward again after a previous zoning impasse. The project, led by Highlander SM One of Fort Worth and landowners Donald and Germaine Tuff from New Braunfels, has resumed the entitlement process for a five-building facility at 904 South Francis Harris Lane.
According to city officials and the development team, the application was reset in October. It is scheduled for its first hearing before the Planning and Zoning Commission in January, followed by consideration by the City Council in February.
The scope of the proposal remains unchanged. If completed, it would feature five data center buildings with a combined power capacity of 380 megawatts. While specific job numbers have not been disclosed, most employment related to the project is expected during construction rather than ongoing operations.
The project has faced continued opposition from nearby residents and some skepticism among council members. Part of this resistance stems from confusion with another gas-powered data center planned for unincorporated Hays County. However, city officials emphasize that this site is distinct and now fully under consideration after the City Council unanimously approved annexation of an additional 64 acres in August.
Previously, efforts to secure zoning approval failed when council members voted 5-2 to amend the city’s comprehensive plan—a move that required a six-vote supermajority due to a prior recommendation for denial by the planning commission. Instead of facing formal denial and a mandatory waiting period, developers chose to restart the process.
There has also been a change regarding potential operators. John Mayberry, manager at Highlander, stated at a December 16 meeting that Dallas-based CyrusOne is no longer contractually linked to the development after delays caused their agreement to expire. Mayberry noted that other operators remain interested but are waiting on zoning approval before proceeding.
To address concerns and gain support, developers have offered several concessions through restrictive covenants covering water use, drainage, impervious cover, noise limits, and LEED standards for sustainability. The cooling system would use a closed-loop design requiring an initial fill of up to 70,000 gallons and daily water use between 20,000 and 35,000 gallons—significantly less than what would be used by a residential subdivision according to city staff.
City projections estimate that if built, the data center could generate $9 million in property taxes for San Marcos itself, $15.2 million for the local school district, and $5.3 million for Hays County. These revenues are significant as San Marcos faces an anticipated budget shortfall of $13 million by 2029.
John Mayberry said: “Multiple potential operators remain interested but can’t move forward without zoning in place.”
Developers hope these new measures will help advance the project through upcoming city reviews.
