A $1.5 billion data center project in San Marcos is moving forward again after a previous zoning impasse halted its progress. The proposed five-building campus, located at 904 South Francis Harris Lane, is being developed by Highlander SM One of Fort Worth and landowners Donald and Germaine Tuff from New Braunfels.
According to city officials and the development team, the entitlement process for the project was formally restarted in October. The proposal is now scheduled for a hearing before the Planning and Zoning Commission in January, followed by consideration by the City Council in February.
The scope of the project remains unchanged, with plans for five data center buildings each offering 76 megawatts of power capacity. While no employment figures have been released, most jobs are expected to be related to construction rather than ongoing operations.
Local residents have expressed ongoing concerns about the development, and some city council members remain skeptical. Confusion has arisen because this project has sometimes been conflated with another gas-powered data center planned nearby in unincorporated Hays County. However, officials emphasize that these are separate initiatives. The San Marcos City Council unanimously approved annexation of the remaining 64 acres for this site 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 from the planning commission. Rather than risk formal denial and a mandatory waiting period, developers chose to restart their application.
A significant change since earlier proposals is that Dallas-based CyrusOne is no longer contractually involved with the development. John Mayberry, manager at Highlander SM One, stated during a December 16 meeting that delays led to CyrusOne’s agreement expiring. He noted that other potential operators are interested but cannot proceed without appropriate zoning approvals.
To address community concerns and facilitate approval, developers have offered restrictive covenants covering water use, drainage management, impervious cover limits, noise restrictions, and LEED certification standards. Cooling systems would use a closed-loop process requiring an initial fill of up to 70,000 gallons of water and daily usage between 20,000 and 35,000 gallons—amounts described by city staff as significantly less than what would be used by a residential subdivision.
City projections indicate that if completed, 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 potential revenues are notable as San Marcos faces an anticipated budget shortfall of $13 million by 2029.
“Multiple potential operators remain interested but can’t move forward without zoning in place,” said John Mayberry at a Dec. 16 meeting.
Developers say they will continue working with local authorities as they seek approval in early 2026.
