San Marcos is hauling a stalled, multibillion-dollar data center proposal back into the spotlight in late January, putting a controversial project on Francis Harris Lane squarely in front of the City Council again. The plan would turn roughly 200 acres into a sprawling campus of server halls and support buildings, a prospect that has already sparked long public meetings and bitter arguments over water and power. After earlier votes left the project stuck in limbo, the Jan. 22 hearing is shaping up as another high-stakes round for both the developers and the neighbors who have been packing council chambers.
According to the Austin Business Journal, the proposal carries an estimated price tag of about $1.5 billion and is set to return to the City Council on Thursday, Jan. 22, 2026. That reporting notes the development team is asking council members to restart entitlement steps that stalled earlier this year.
City planning notices show the application covers about 199.49 acres on the west side of Francis Harris Lane and would require changing the city's Preferred Scenario Map and rezoning the land to allow light industrial uses. According to the City of San Marcos and reporting by Community Impact, the landowners include Highlander SM One LLC and others, and part of the tract sits outside city limits and would need to be annexed.
Neighbors Say The Risks Outweigh The Rewards
Opponents, organized locally in groups such as the Data Center Action Coalition, have repeatedly warned council members that the project could threaten local water supplies, wildlife and the area’s rural character. Local reporting has described overflowing public comment at community meetings and a march ahead of an earlier council hearing, where many residents lined up to speak against the rezoning and map change. The San Marcos Record reported that the pushback helped stall the proposal over the summer.
Power And Water Plans Add Complexity
At the same time, other large data projects are lining up in the same corridor, some pitching behind-the-meter natural gas generation and gigawatt-scale power contracts. That has sharpened the fight over where all that energy will come from and what price the landscape might pay. Reporting shows CloudBurst and other developers planning high-capacity sites nearby, while media analysis has highlighted Energy Transfer’s pipeline deals and similar arrangements as a shifting model for AI-focused data centers. For background on those plans, see the Express-News and Data Center Frontier.
What The Developers Must Clear
To build the campus, the developers need a Preferred Scenario Map amendment that would flip the designation from Conservation/Cluster to Commercial/Employment Low, a rezoning from FD/CD-2.5 to Light Industrial, and annexation of the portion outside the city. After the Planning & Zoning Commission recommended denial, those actions now require a supermajority vote at council. City filings also show the site currently has 559 living-unit-equivalents with Crystal Clear Water and lies in a service area under Stage 3 water restrictions, a detail that weighs heavily in the ongoing debate. The filings and utility information are laid out in the City of San Marcos notice and coverage by Community Impact.
What To Watch On Jan. 22
If the council approves the map and rezoning items with the required supermajority, the developer can move ahead toward final entitlements and annexation. If the votes fall short again, the case could be sent back to Planning & Zoning or reworked. Earlier this year, Dallas-based CyrusOne was linked to the site and later said it would pause its involvement after contentious public hearings, a sequence that shows how community pressure has already altered the project’s timeline. The San Marcos Record and the Austin Business Journal have more on the schedule and history of the case.
Whichever way the vote lands, the outcome will be a big deal for Hays County’s emerging data center cluster. A green light could unlock billions in investment and kick construction into high gear, while another pause would keep the fight locked on water, power and land use. For both sides, the Jan. 22 council meeting is the next hard deadline to make their case.
