Texas rejects settlement that could cut proposed data center from 2,523 to 1,375 acres

Texas' Hood County commissioners have rejected a settlement that would have reduced a proposed data center project from about 2,523 acres to 1,375 acres. They also unanimously denied the developer's appeal against an earlier decision to reject permits for the project, bringing a possible court fight closer.

The decisions came on Tuesday, October 13, after hours of public testimony and debate over the Comanche Circle data center project. Developer Sailfish Investors had reportedly offered to reduce the project's size and make commitments on water-efficient cooling, building setbacks, light pollution and road repairs in an effort to reach an agreement with the county.However, commissioners voted 3-1 against the settlement, with Kevin Andrews the only member voting against its rejection.

Commissioner Nanette Samuelson was absent. The commissioners later voted unanimously to deny the developer's permit appeal.

Why commissioners rejected the settlement

The proposed Comanche Circle campus, led by Sailfish managing partner Ryan Hughes, is planned near the Hood and Somervell county line, close to Dinosaur Valley State Park. Residents raised concerns about the project's possible effects on water supplies, wildlife, nearby properties and local roads.

Questions were also raised about drainage, power generation and the project's water source. Opponents argued that the developer had not provided enough information and proper plans.Kevin Andrews said the county should continue discussions with the developer rather than reject the settlement.“We have been offered concessions that we can’t regulate, and I think it would be a good idea for us to continue to negotiate to try to get to terms that work for the county,” Andrews said.The proposed settlement included closed-loop cooling, which is designed to reuse cooling water, along with light pollution controls and other commitments. Hughes also said he would not seek tax incentives if the agreement was approved. However, commissioners rejected the deal and then voted against the appeal of the earlier permit decision.

Developer says court action is likely

In an October 1 email to county officials, Ryan Hughes warned that rejecting the settlement could lead to a lawsuit and potentially leave the project subject to fewer restrictions.

Before the vote, he told commissioners, “It looks like we’re unfortunately going to court.”After the decisions, Hughes said he was disappointed but not surprised. In a statement sent to the Fort Worth Star-Telegram, he said he had agreed to reduce the project's size and include water-efficient cooling and light pollution controls.“When Governor Abbott set his commonsense data center standards, I agreed with them wholeheartedly and committed Comanche Circle to them,” Hughes wrote.He added: “I hoped today’s settlement would end this dispute for good. Instead, neighbors lose those protections and taxpayers pay for a court fight the County could have avoided,” he said.Hughes also apologised during the meeting for using profanity in text messages discussed by speakers at the hearing.“That’s how I talk to my friends. That’s how I talk to colleagues. And you know, it’s something that my wife says I really hope to work on.

So I definitely apologize for the language and apologize for any insinuations,” he said.

Why are residents opposing the project

Residents and local groups, including Protect the Paluxy Valley, have opposed the proposed campus over concerns about its impact on water resources and the surrounding environment. Commissioner Dave Eagle said Hood County has a special designation under state law, known as Subchapter 231K, which covers the watershed that drains into Lake Granbury and the Brazos River.Eagle said the law gives the county powers intended to protect public health and safety and prevent pollution of rivers and lakes. Texas counties are still working out how to regulate large data centre projects while balancing the interests of developers, property owners and local communities.With the settlement rejected and the permit appeal denied, Sailfish Investors faces another setback in its effort to move forward with Comanche Circle. The company had argued that the settlement would allow the project to proceed with additional restrictions, but commissioners chose not to approve the agreement.