Council Rezones Land for Light Manufacturing (Skybox Data Center)

San Angelo City Council rezoned a recently annexed area in the Northeast side of town for light manufacturing to accommodate a proposed Skybox Data Center project.  Council heard from a large number of citizens in public comment prior to the Consent Agenda and during the rezoning item itself.  

An article on the U.S. manufacturing boom promised by the White House stated:  

When manufacturers build new plants, they also need housing for workers, warehousing for parts, and access to roads, ports, and rail. That drives up the value of surrounding land and rental housing — especially in overlooked areas just outside major metros. Real estate investors often move early in these cycles, buying up properties near confirmed development zones and holding for appreciation.

Abilene just approved a 1,000 space RV park to accommodate temporary workers building their gargantuan Lancium Project.  It started as a squirrelly Bitcoin mining operation that would run an energy arbitrage, but morphed into Trump's giant AI project and renamed Stargate in conjunction with Sam Altman's OpenAI.

Most of the people who commented at Tuesday's Council meeting know what is coming.  Many opposed it, while a number of people supported the Skybox project.  Citizens know our electrical bills will go up no matter where in Texas these data centers go.  They know construction will involve lots of imported workers, higher truck traffic and put pressure on housing and hotels.  It happened during the shale boom and will return with Skybox.  

Council is yet to ask what happens if this thing busts in fiver years.  Are they prepared to take the keys to the building if owners and lenders walk away?  

Cooling in West Texas is a significant challenge in any summer, but 2024 levels of summer heat make that far more expensive, assuming that much power is actually available.  

Citizens want to know if power will remain affordable and actually be there when needed.  That concern grows when Vice President of Economic Development Michael Looney stated two other data centers are currently looking at Tom Green County.  

Prior to Council's 6-1 vote approving the zoning change, Mayor Thompson complimented public comment.  A number of issues were raised that the Mayor said could be addressed via a 380 economic development agreement which provides restrictions in order to receive those benefits.  

Actually, a number of issues raised require Skybox to share information that likely sits under a current non-disclosure agreement (NDA) with the city and city leaders, including the Mayor.  

Mayor Thompson said during the zoning item regarding the economic value of the proposed data center:

"I've heard lots of different numbers brought up."

Later he said:

"A lot of questions were answered.  There's a lot of questions that still are yet to be answered.  There's a lot of information out there.  A lot of it is correct.  More of it's incorrect.  But a lot of things are opinion."

Time and actions will reveal how open Skybox and the City are in regard to answering citizen questions and concerns.  That is the Mayor's job, NDA or not. 

It's Data Center Season in Texas

San Angelo Live's Joe Hyde interviewed San Angelo Mayor Tom Thompson regarding water and the proposed Skybox Data Center for the new northeast portion of town.  Negotiations with SkyBox have been ongoing with City Council approving a letter of intent for the land sale in March 2025.

The pair talked numbers, $ of investment (which ranged from $7 to $27 billion) and city tax proceeds (roughly $50 million on the lesser $7 billion valuation).  

Jobs came up in the discussion of impact on the area once the project is complete.  Thompson threw out the number as 40 employees and said "you aren't bringing in a lot of people."  The Development Corporation was created to create or retain primary jobs. 

Thompson's verbal description of the tax rate had two more zeroes than the stated amount and he quoted last year's rate, not the rate for 2025-26, which is .7947.

Next, they discussed the benefit of that new tax revenue: 

Former City Engineer Clinton Bailey addressed City Council on this failure before he moved on the Fredericksburg. Texas.

Clinton Bailey spoke to City Council on February 26, 2013 about his recommendation to create a comprehensive street maintenance program for the City of San Angelo. He did so by describing the life cycle of a street and the City's abysmal performance in maintaining streets.

Thompson said the City had finished its street maintenance program.  The City borrowed money for street maintenance and those borrowing/interest costs go into the tax rate. 

They closed with the prospect that Skybox might not be the only new data center in town.  Thompson's new city revenue shifted from $50 million to a range, $30 to $50 million.  

The Mayor did not detail how the data center's coming "saves" hundreds of millions of dollars over seven, eight, nine, ten years."  That may be revealed or it may not.

As Thompson said and Joe Hyde punctuated, the Mayor has nothing to hide.  

Update:  FoxWestTexas reported that data centers are choosing rural communities for low costs and provide few high tech jobs.  The study said:

We see little evidence to suggest cloud providers will spread their data centers to any but a small number of low-density locations. Our findings support speculation about the likely direction of changes as demand shifts to the cloud, and the location decisions begin to concentrate in the hands of cloud providers.

Update 1-11-26:  WaPo did a story on political opposition to giant data centers within small towns in Oklahoma, Pennsylvania and  Arizona   Issues are rising electricity cost, water usage and heavy industrial usage in what was once farmland.

Energy Secretary Chris Wright warned data center developers that they are losing control of the narrative. “In rural America right now, where data centers are being built, everyone’s already angry because their electricity prices have risen a lot,” he told energy executives.

Council Agenda: Economic Incentive for True Lightning Protection LLC

San Angelo City Council will consider a $300,000 economic development incentive package for True Lightning Protection, LLC in their January 13th meeting.  

The Development Corporation approved the package in their December 10, 2025 meeting.  Board member Travis Stribling asked about the economic development analysis referenced by Project Manager Bob Schneeman.  Staff responded but remained at a high level, avoiding specific assumptions and greater detail on the analysis.

Council's background packet on the matter is consistent with staff slides in the Development Corporation meeting.

• Manufacture and install lightning & static mitigation solutions 
• Currently operating as Heare Services -manufacture some individual components 
• Capital Investment - $851,000 
• Create 8 full time positions at an average $ 58,750 annually 
• Incentive - $300,000 for Capital Investment & Job Creation 
• 10 Year Economic Impact - $15M 
• Return on Investment (ROI) – 5.2 years / 19.3%

City staff has provided greater detail in the past regarding incentive components (assumptions and breakdown), the various ways the city should benefit (economic impact) and the specific monetary returns on that incentive investment.  It usually includes some type of clawback provision for nonperformance.

Consider these slides from the city's economic development agreement with MedHab (2012).  The first is the offer:

The second is the calculation of return on investment (ROI):

More detailed True Lightning Protection, LLC information was not made available to the Development Corporation board, which has a fiduciary responsibility in approving and overseeing incentive deals.  

Less information to Council and the public has been the trend for many years.  New economic development projects have investors with specific hurdle (return) rates and they consider the most basic information to be a trade secret.  

Some might say it's just a local firm adding a new product line.  That is true.  But it also the economic development predecessor to Skybox Data Centers.  

Council will approve a zone change for an area that includes Skybox designated land in Tuesday's meeting.  It already approved the land sale and annexed the property in March 2025.  Annexation documents commit to providing specific city services.  Council approved the creation of a new development plan for that section of the city in November 2025.  

Any fiduciary body should know what happens with the deal if the recipient fails to live up to their promises be it MedHab, True Lightning Protection or Skybox Data Centers.  It's good planning.

Update 1-18-26:  A Public Information Request produced the economic development analysis for the True Lightning Protection Project.   

Populating Texas Desert with Data Centers

Anslem Research wrote regarding massive data centers being developed:

Either the gods are being built in the Texas desert, or the greatest financial delusion in human history is unfolding in real time while sophisticated observers debate quarterly earnings.

One of those desert data centers appears to be coming to San Angelo (on land just northeast of town).  City leaders and elected officials attended a recent community meeting on the Skybox Data Center project.  Three local sources wrote articles about the meeting, Concho Valley Homepage, Concho Observer and San Angelo Live.

Skybox is yet to purchase the land according to one story.  Significant work has been done on this project by city staff and economic development professionals. 

Assistant City Manager Michael Dane said he would not be surprised if the deadline to close (the land sale) under the agreement with Skybox does not have to be extended.

Dane's last day of employment with the city is but a day away, January 2, 2026.   

The City hired Westwood to create a Northeast Sector Plan, total price $252,000.  That proposal includes:

Based upon concept plan options, Westwood will document potential development paths needed to be performed with the jurisdiction(s) in order facilitate the concept plan. This may include annexation, zoning, MTP amendments, and other requests as defined by the jurisdiction(s).

The City annexed the property the same day Council approved the letter of intent for the land sale.  (Two local news stories showed other annexation time frames, "Summer 2025" and "recently."  This post originally ran with Summer 2025 in text as well as the above graphic.  These were corrected after I submitted a public information request on the annexation date.  The item was included in the consent agenda for 3-4-25 with no discussion of the item.)  

The move from Ranch & Estate zoning to Light Manufacturing is also part of the economic development conditions/slow-rolling package for Skybox.  A data center site with at least 144 diesel generators does not sound like light manufacturing to me.

Skybox and the city are in the due diligence phase and a tax abatement request or agreement is yet to be shared.  Concho Observer reported.

No tax breaks will be issued to the Skybox project, and the city is excited to potentially double its tax base, as Looney claims. 

According to previous reports, the center would add around $7 billion of value to the City’s property tax roll. To put that into perspective, the current value in the entire city is around $7.9 Billion according to City Finance Director Tina Dierschke.

The City of San Angelo provided significant tax breaks to a private equity sponsored battery farm not far from the Skybox location.  In time I expect a similar request for this project.

TechGods are weighing in directly and indirectly on the project.  Concho Observer quoted an expert from a think tank (Foundation for American Innovation) regarding Skybox's plans. It's hard to believe anyone can assess the situation given what little information has been released to date. Also, the think tank's board is loaded with people from vested TechGod interests, Founders Fund (Peter Thiel), Patreon, & Paladin Capital.

Part of Skybox's due diligence is to get a clear financial picture of the project's viability.  That includes an estimate of its local tax liability.  Rest assured those discussions are underway and economic development staff are aware of the tax rate that would stifle development.

Skybox is not planning to be part of the greatest financial delusion in human history.  That means subsidies from multiple sources, including the city.  This will be a slow drip for the public to get the whole picture.  

Update 1-4-26:  People are skeptical of the promise of giant data centers in their communities.  

Update 1-5-26:  The City of San Angelo annexed the land it agreed to sell to Skybox Data Centers on 3-4-25, the same day Council approved the land sale.  This information came from a public information request.

Update 1-10-26:  San Angelo Live interviewed Mayor Thompson regarding the proposed data center.  DataCenteryDynamics picked up the story regarding San Angelo's possible deal with Skybox.