Briefing 04/03/2025
This week’s round up: Two proposed data centers near San Marcos, TX, triggered community backlash over environmental concerns—one was rejected by city planners. In Minnesota, a DFL-backed bill could reshape data center development by mandating 65% carbon-free energy, annual water and energy reporting, and steep conservation fees. Meta, Microsoft and Amazon projects could be affected. In La Grange, KY, the $6B Project Lincoln proposal drew opposition for its placement on residential land–over 1,800 residents signed a petition against it within days.
Two Texas Data Centers Trigger Community Backlash; One Project Rejected
Two proposed data centers in Texas, both located near San Marcos, have sparked intense community protests and drawn regulatory scrutiny. One site is within San Marcos city limits, while the other lies just outside. The San Marcos Planning and Zoning Commission recently recommended denying the zoning and land-use changes for the 199-acre proposal at 904 Francis Harris Lane.
Meanwhile, CloudBurst Data Centers, a Denver-based startup, is planning a separate AI-focused facility just 2.9 miles away at 2955 Francis Harris Lane, outside city jurisdiction, with plans to power the site using an onsite natural gas plant and serve high-density compute (HDC) applications.
San Marcos Data Center Project (904 Francis Harris Lane)
Developer: Highland SM One LLC (John Maberry) and associates. Not an AI or Bitcoin facility
Location: Within San Marcos city limits
Zoning: Requires amendment to the Preferred Scenario Map and rezoning from “Conservation/Cluster” to “Light Industrial”
Power Source: Near the Hays Energy power plant (grid-tied)
Public Concerns: Water use, electricity demands, noise, cemetery access, environmental impact
Project Status: Denied by Planning & Zoning Commission, heading to City Council (needs supermajority to proceed)
CloudBurst Data Center Project(2955 Francis Harris Lane)
Developer: CloudBurst Data Centers, Inc. (Denver-based startup). AI/high-density compute (HDC), immersive cooling.
Location: Outside San Marcos city limits and ETJ (in Hays & Guadalupe counties)
Zoning: Not under city jurisdiction — fewer regulatory hurdles
Power Source: Onsite, behind-the-meter natural gas plant (via deal with Energy Transfer LP)
Project Status: Early stage, construction planned for Q2 2025
Public Concerns: Same themes—water usage, old infrastructure, pollution, impact on conservation land and wildlife
Why it matters
Growing rural and suburban opposition: Local protests and strong concerns over water, power, and environmental degradation highlight increasing friction between rapid digital infrastructure expansion and local sustainability goals.
Regulatory divergence within short distances: The San Marcos project faces strict city review and potential supermajority opposition, while CloudBurst's project in unincorporated Hays and Guadalupe Counties may avoid similar regulatory roadblocks—illustrating how jurisdictional boundaries can shape the path of least resistance for data center developers.
Minnesota Bill Targets Data Center Water and Energy Use Amid Industry Expansion
A new bill (HF2928) introduced by Rep. Patty Acomb (DFL-Minnetonka) would impose stricter regulations on data centers in Minnesota. The proposed legislation would require large data centers to use at least 65% carbon-free energy, report their electricity and water usage annually, pay millions in conservation fees, and undergo full environmental impact statements.
Projects impacted
The bill arrives as interest in building data centers surges—at least 11 large projects are in the pipeline statewide, including Meta's $800M facility in Rosemount and Amazon’s project in Becker.
Tract Farmington 576 MW
AWS Becker 250.4 MW
Tract Rosemount 150MW
Archer Minnesota 119.7 MW
Microsoft Becker 113.2 MW
Why it matters
Policy shift: If the bill passes, Minnesota would be shifting from an incentive-based policy to a regulatory model, which could ripple into other environmentally conscious states. The bill would introduce new cost burdens and transparency requirements that may deter hyperscalers.
Public and environmental scrutiny is growing: The bill is supported by a coalition of DFL lawmakers, environmental groups, and community advocates who argue that data center expansion poses a risk to water supply, grid stability, and Minnesota’s climate goals.
Active groups in Minnesota that have recently testified in hearings about data centers and could potentially support the bill:
$6 Billion “Project Lincoln” Data Center in La Grange, Kentucky Faces Local Pushback
A massive data center project, dubbed Project Lincoln, has been proposed for a 267-acre residential site near Highway 53 in La Grange, Kentucky. If approved, it would be one of the largest private investments in state history, with hundreds of jobs and up to $50 million in annual tax revenue. However, many residents are opposing the project due to concerns over land use, environmental impact, and community disruption.
A Facebook group named “We Are Our Oldham County” has gathered over 1880 signatures in a petition against it in just a few days.
Project Lincoln
Developer: Developer name not publicly disclosed
Economic Impact (Projected): $6 billion investment; potential $50 million in annual tax revenue
Location: La Grange, Oldham County, Kentucky
Zoning: Proposed for residential land, not currently zoned for industrial use
Power Source: Existing power infrastructure; specific energy provider or source not disclosed
Project Status: Early stage; under review by local technical review committee (meeting scheduled April 16)
Focus: Purpose-built data center, but no specifics on AI/HPC or cloud services
Public Concerns: Health risks, groundwater impact, loss of rural character, inappropriate land use, noise/light pollutionCommunity Response: Facebook group "We Are Our Oldham County"
Why it matters:
Siting decisions are under a microscope: Building on residential land—even with existing power infrastructure—is triggering significant backlash, emphasizing the importance of careful site selection in future projects.
Community organizing is gaining traction: The fast-growing grassroots opposition in Oldham County reflects a wider trend where residents mobilize quickly and effectively against hyperscale data center developments.
Links
Public comments open on xAI’s proposed data center campus in Memphis
https://www.yahoo.com/news/public-comments-open-xai-memphis-193556970.html
Pennsylvania’s Largest Coal-Fired Power Plant Will Be Demolished for a Gas-Powered Data Center Campus
https://keystonenewsroom.com/2025/04/02/pennsylvanias-largest-coal-fired-power-plant-gas-powered-data-center-campus/
AI data center boom promises to transform rural communities
https://www.businessreport.com/article/ai-data-center-boom-promises-to-transform-rural-communities
White paper points to carbon capture as possible data center solution
https://www.utilitydive.com/news/carbon-capture-possible-data-center-solution/743744/
AMD Closes $4.9 Billion ZT Systems Deal, Targeting Its Piece of the ‘AI Factory’
https://www.wsj.com/articles/amd-closes-4-9-billion-zt-systems-deal-targeting-its-piece-of-the-ai-factory-248f13ff
The DOE Quietly Issued a Memo on AI Data Centers
https://heatmap.news/energy/doe-data-centers-memo
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