San Marcos council annexes land but rejects preferred‑scenario change tied to proposed data center

San Marcos City Council on Aug. 19 approved annexation of roughly 64 acres on Francis Harris Lane but did not approve a change to the city—s comprehensive plan that the developer said was required for the site to be rezoned for a proposed data center campus. The result leaves the proposal in limbo: the city took the land into its limits, but the zoning that would allow the light‑industrial/data center use could not be considered because the council voted down the preferred‑scenario amendment that would have allowed that zoning.

The outcome followed a packed public comment period in which speakers repeated concerns about local water supplies, electric grid impacts, noise and light, and corporate secrecy, while supporters said the proposal would use less water than an already‑entitled housing development and would bring large property‑tax revenue and construction jobs. John Mayberry, the property owner and applicant, and Michael Whelan, attorney for the applicant, described a restrictive covenant they say will limit water use and set other conditions if a data center is built.

Why it matters: The council—s split action preserves city authority over the parcels that were annexed, but it leaves open whether a data center will be approved on land now inside the city or built later outside city limits under county rules. Supporters argued that annexation lets San Marcos impose enforceable conditions and capture tax revenue; opponents said the city—s controls are insufficient and that the project threatens springs and the San Marcos River and nearby residences.

What the council did - Annexation (agenda item 14): council approved annexation of the parcels by a 7‑0 vote. The annexed area includes land immediately adjacent to the Hays Energy power plant and a small cemetery that the applicant says will be preserved. - Preferred‑scenario amendment (agenda item 15): council considered a motion to approve a change in the comprehensive plan that would allow light‑industrial zoning on the site. Because the amendment required a supermajority, the motion failed in the final tally recorded in the council minutes: the motion did not receive the supermajority needed (recorded as 5 yes, 2 no in the official minutes), so the change did not pass. - Zoning (agenda item 16): because the preferred‑scenario amendment did not succeed, the related rezoning request was not considered by council that night.

What supporters told the council Supporters said the site would produce far more predictable tax revenue than the alternative of 500 single‑family homes that had earlier development entitlements, and they emphasized legal protections written into a draft restrictive covenant. Labor representatives told council they had reached agreement with the property owner to use union labor for construction.

- Laborer Matthew Gonzales, president and business manager of Laborers Local 1095, said the union had talked with the owner and the developer and said union workers would be available for construction and would bring higher starting wages and training opportunities.

- John Mayberry, the property owner and the applicant, said the covenant would require a closed‑loop, non‑evaporative cooling system and limit on‑site water use. Mayberry gave a specific figure during his remarks: “There will be 5 buildings, and each building will use between 4 and 7,000 gallons of water per day for domestic use. That is bathrooms and sinks. So the project as a whole will use 20 to 35,000 gallons per day.” He framed that as far less than the 167,100 gallons per day that the site currently carries under prior residential entitlements.

What opponents told the council Opponents urged the council to slow the process and demand more specifics from the developer and from any hosting data‑center operator. Speakers repeatedly cited drought, declining spring flow and the Edwards aquifer, and community concerns about noise, light and possible chemical or wastewater impacts.

- Virginia Parker of the San Marcos River Foundation told council: “We do not support the building of data centers in the San Marcos River watershed because there’s just not enough water to sustain that industry alongside our community, springs, and river.”

- Neighbor Abigail Lindsey, who said she lives adjacent to the property, told council she did not trust the developer or contractors to keep promises and criticized the covenant—s 20‑year limit, calling it “not worth the paper it is written on.”

Developer proposals and staff view The developer provided a draft restrictive covenant that the applicant says would: prohibit certain industrial uses such as warehouse distribution and waste processing; require closed‑loop, non‑evaporative cooling for a data center; limit on‑site water use (the draft referenced 235 LUEs / 75,000 gallons per day as a cap); reduce allowable impervious cover; include water‑quality measures and noise limits (the draft calls for a daytime cap of 75 decibels, lower than some code limits); and require a LEED‑certified building if a data center is built.

City staff recommended approval of the preferred‑scenario amendment and the zoning request, noting the property—s adjacency to existing industrial uses (the Hays Energy power plant) and saying the draft covenant and other measures would reduce certain impacts. The Planning and Zoning Commission, however, recommended denial of both the preferred‑scenario amendment and the zoning application; staff analysis and the applicant—s covenant led staff to a different recommendation for council.

Company status and next steps The council—s action followed public testimony that a major data‑center operator that had been linked to the project was pausing or withdrawing its active involvement in the rezoning process; city staff said a company representative had told them the firm was taking time to address concerns raised by the community. The council did not adopt zoning; because the preferred‑scenario amendment failed, the zoning matter cannot proceed until any applicant either returns with a different set of proposals or the comprehensive plan designation is changed in a future action.

Votes at a glance (formal items referenced in the meeting minutes) - Consent agenda (items 1–9): approved 7‑0. - Annexation and zoning (items 10–13) for a separate industrial park on I‑35 South: annexations and zoning approved 7‑0. - Annexation of Francis Harris Lane site (item 14): approved 7‑0. - Preferred‑scenario amendment for Francis Harris Lane (item 15): motion to approve failed (recorded vote in the minutes: 5 yes, 2 no); supermajority required — not met; outcome: failed. - Zoning (item 16): not considered because the preferred‑scenario amendment did not pass. - Other votes that evening included routine contracts and budget calendar items; those passed on their recorded tallies (see official minutes for the complete list).

What council members said and what happens next Several council members told speakers they had heard the concerns and wanted more information. Staff said the annexation gives the city the legal ability to enforce land‑use commitments on the property if a developer returns with a project that meets city requirements.

The applicant may return with revised proposals. Because the preferred‑scenario amendment required a supermajority and did not pass, the specific rezoning request tied to that amendment was not before council and would have to be refiled and reheard if the applicant wishes to move forward; city staff said applicants may reapply subject to code limitations and notice requirements. The council also discussed, during the meeting, that restrictive covenants can be written with specific enforcement language and that staff will work through those remedies if and when a developer brings a binding covenant forward.

The council will not take further action on zoning for this site until the applicant either amends its requests or the council later votes to change the preferred‑scenario map. For now the property is annexed but not zoned for a data center; the council—s votes preserved the city—s authority over the parcels but left the proposal unresolved.