San Marcos council hears hours of opposition, denies zoning step on proposed Highlander data center

The San Marcos City Council spent much of its Feb. 17 meeting weighing whether to change the city’s land-use plan so a developer could build a large data center on Francis Harris Lane. Dozens of residents and dozens more union workers filled the chambers and an outdoor gathering space for hours of testimony before the council voted to deny the land-use change requested by the project developer.

The council’s 5–2 vote to deny the preferred-scenario amendment (PSA) means the accompanying rezoning request to allow light-industrial uses on roughly 199.5 acres cannot proceed at this meeting; the denial also triggers a six-month waiting period before the same PSA can be filed again. Council members Amanda Rodriguez, Josh Fel, Selena Garza, Mayor Jane Houston and Shane Scott voted to deny the amendment; Councilmembers Mendulsa and Gonzalez voted against the denial.

Supporters of the Highlander proposal — including construction-trade leaders who said the build would create multi-year union jobs — argued the project would bring tax revenue and a written restrictive covenant that, they insisted, would limit water use, control noise and give the city enforcement tools if the developer did not comply. Developer representatives and the project’s landowner described a covenant that calls for a closed-loop (non-evaporative) cooling system, monthly water-usage reporting, a hard daily cap on on-site water under normal operations (the developer’s earlier drafts capped some operating scenarios at 45,000 gallons per day and allowed lower caps if reclaimed water is made available), reduced impervious cover, and generator and noise standards that the applicant described as stricter than existing code.

Opponents said those written promises were not enough. More than one hundred people spoke during an extended citizen-comment period. Residents who live adjacent to the proposed site warned that the project would stress already scarce groundwater and could imperil the San Marcos springs and the tourism and recreation economy built around the river. Several speakers cited studies and third-party reports — and national news coverage of problems in other communities — claiming that construction and operation of large data centers can lead to groundwater depletion, higher local utility rates and local air quality problems tied to backup generators and power-plant dispatch.

"This is about more than jobs," Kaylee Champagne, a resident who spoke early in the public comment period, told the council. "We are being asked to trade our water and our springs for promises that may not survive market and technology changes."

Union representatives countered that a large, multi-year construction project would lead to long-term careers for trade workers, apprenticeship opportunities and local spending while pointing to explicit company commitments to use union labor. Several union members testified they had written assurances from the developer about hiring and safety standards on the site.

Developer representatives repeatedly pointed to the restrictive covenant and to staff reports recommending approval. Developer counsel and project representatives also underscored that the project would be located inside city limits, enabling the city to require and enforce the covenant, and that a similar project placed outside city limits might be harder to regulate.

Council debate touched both procedural and technical questions. Several council members said they were torn between the potential economic benefits and the long-term environmental risks. A number of members asked for more data about "off-site" water use — the water consumed indirectly by producing the electricity that powers compute facilities — and whether that water should be counted toward local resource impacts. That question became central to several councilmembers because the restrictive covenant language the developer presented addressed on-site water for cooling and operations, but not the additional water used in power generation elsewhere to meet the site’s energy demand.

After more than five hours of public testimony and debate, the motion to deny the preferred-scenario amendment passed 5–2, blocking the related rezoning at that meeting and imposing a six‑month wait before the same PSA can be filed again. The denial was procedural — it stops the city from changing its comprehensive-plan map for this property now — and it does not impose an immediate ban on all future data centers. However, opponents said the vote signals the council’s skepticism about approving large, water- and energy-intensive facilities near the Edwards aquifer and the San Marcos springs without stronger, independently verified mitigation and long-term guarantees.

What’s next: Because the PSA was denied, the related zoning case cannot be heard at this meeting. If the developer wants to pursue the site again, the PSA would have to be refiled after the six‑month period (and resubmitted zoning and permit applications would follow the city’s normal public-notice and review process). Meanwhile, council members and residents asked staff to continue sharing technical information about off-site water footprints, power-plant dispatch and enforcement options so elected officials and the public can see the tradeoffs more clearly.

The council completed several routine consent and business items late into the night and made appointments to boards. After the vote, the meeting adjourned just after 2:40 a.m.

Sources: public testimony and staff presentation at the Feb. 17, 2026 San Marcos City Council meeting; developer-submitted draft restrictive covenant provided to the council and posted with the project materials.

Ending note: The vote delays, but does not ban, future proposals. Several residents said they plan continued advocacy and monitoring of related projects both inside and outside the city’s limits, and some council members said they expect state-level and regional discussions about data-center siting and utility impacts to continue in the months ahead.