Texas City Rejects $1.5 Billion Data Center After Citizen Protests

San Marcos City Council votes 5-2 to deny zoning changes for proposed data center project.

Published on Feb. 22, 2026

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After over 8 hours of public testimony, the San Marcos City Council voted 5-2 to deny zoning changes that would have allowed the construction of a $1.5 billion data center on the outskirts of the city. Residents had raised concerns about the project's impact on water resources, energy usage, and food production in the area.

Why it matters

The decision highlights growing tensions between the need for data infrastructure and the preservation of natural resources and agricultural land. As data centers proliferate, local communities are increasingly pushing back on projects that they feel threaten their environment and way of life.

The details

The proposed data center project was submitted by Highlander SM One LLC, the landowners of the 200-acre property between Grant Harris Road and Francis Harris Lane just outside San Marcos. The data center was projected to consume up to 75,000 gallons of water per day for its cooling system, which would have been 1% of the city's total water usage. Over 4,000 residents signed a petition opposing the project due to concerns about water, energy, and impact on food production.

  • The city council meeting and vote took place on February 22, 2026, lasting over 8 hours.
  • The developer can submit another re-zoning request in 6 months to have the matter reconsidered.

The players

Highlander SM One LLC

The landowners who submitted the proposal for the $1.5 billion data center project.

San Marcos City Council

The city council that voted 5-2 to deny the zoning changes needed for the data center project.

Sid Miller

The Texas Commissioner of Agriculture who has called for protecting agricultural land from the impacts of data centers.

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What they’re saying

“The unchecked spread of data centers onto prime farm and ranchland is a real and growing threat to our food supply, but America also needs data, innovation, and technology infrastructure to stay competitive. America will continue to lead the world in both agricultural production and technology innovation, but only if we do it the right way.”

— Sid Miller, Texas Commissioner of Agriculture (Breitbart)

What’s next

The developer of the project can submit another re-zoning request in six months to have the matter reconsidered by the San Marcos City Council.

The takeaway

This decision in San Marcos reflects a growing trend of local communities pushing back against large data center projects due to concerns over their impact on natural resources and agricultural land. As the demand for data infrastructure increases, finding the right balance between technology and environmental preservation will be an ongoing challenge for policymakers.