Tom Green County Targeted, San Angelo Partnering

Three data centers have targeted Tom Green County for possible sites.  Beacon Data Centers is the only one to identify itself.  They hope to build a giant data center in Dove Creek.  Residents told them to go away.

The City of San Angelo has been far more accommodating, working a land deal/annexing the area (March 2005), changing the zoning to allow data centers (January 2026) and approving zoning regulations relative to data center development (May 2026).  Developer Skybox/Emergent promotes the project as "built for speed" and having "exceptional municipal support."  

Data Centers are needed for AI and are being brought to us by the same people that created addictive and harmful social media and other predatory apps.  

Our leaders want the public to trust the developer any potential AI occupant.  

No thank you.  Developers are backed by big money intent on making bigger money.  Promises mean nothing.  The project is intended to make bank for its private equity underwriter (PEU) sponsor.  If so, it will be flipped in a few years and the people who brought the project to our area will be gone.

It could middle along, in which case the developer has to hold onto to the project, tweaking it for regular cash siphoning.  

The project could fail miserably and its keys be handed back to creditors.  If creditors don't want it, it becomes the city's problem as an abandoned piece of property with lots of toxic heavy metal equipment and tainted cooling water.

Tom Green County residents need a government champion, whether it be local, regional or state, to level the imbalance of power and advantage.  Texas, like most states, is set up to encourage such development via layers of tax breaks, fast tracking permits and even direct subsidy.

San Angelo residents need brakes to stop the oncoming train so its engine defects can be examined and fail safe's installed that actually protect residents.  There needs to be significant monetary penalties for failed promises and actual community harm.

The developer would say "we are just the building."  That building will use the energy of 750,000 homes and house unreliable, even dangerous AI. 

I speak for many when I say our area does not need or want hyper-scale data centers with their voracious power and water needs, their inflation boosting impact on goods and housing and their profit obsessed PEU owners/funders.  

Someone owes us a square deal, not one where we pay and pay and pay, both in money and loss of quality of life.  

Update:  Lake Tahoe communities are facing the prospect of no electricity due to a supplier redirecting its power to data centers.

The data center boom is rapidly sucking Nevada’s power grid dry, with an estimated 22 percent of the state’s total electricity generation capacity going toward the behemoth computing centers in 2024.

Texas, are you listening to the rapidly sucking sound to our west? 

Update 5-26-26:  Business Insider ran a story on students booing graduation speakers over the mention of AI:

....the perception of AI among the public is low. A Pew Research Center study found that about half of Americans felt the increased prevalence of AI in their daily lives made them feel "more concerned than excited." Many Americans across the country, meanwhile, are resisting new data centers in their communities, which are essential to powering AI products like chatbots.

Oh, and the cost of compute will far exceed the cost of human employees according to NVIDIA's CEO..

Brutal Data Center Stats for Texas Water

Texas faces the prospect of 750 new data centers according to a presentation at the recent Milken Global Conference.  Currently 140 data centers are under construction and 610 have been announced.  It's not clear if San Angelo/Tom Green County's potential four data centers are in the count.  Likely not, so the number could grow much higher.

Beacon Data Centers is looking at Dove Creek in Tom Green County for a possible location.  Their website indicates one of their data centers under development would use 400 acre feet of water per year.  

They said they would not drill wells but use surface water from Spring Creek.  I don't see how that is possible given we live upstream and the creek goes dry solely from upstream irrigation.  They stop irrigating and the flow returns.  It's not nearly enough to sustain daily operations of a giant data center.

Take 750 new data centers at 400 acre feet per year once under operation and that's an additional 300,000 acre feet needed statewide.  That does not count the water needed for construction or for new workers' living needs during the construction period.

Consider this recent report from Politico:

The neighbors of a data center in Georgia are steaming after they discovered the facility had sucked up nearly 30 million gallons of water.... 

Outrage started bubbling up last year when residents of an affluent subdivision named Annelise Park in Fayetteville, Georgia, noticed their water pressure was unusually low.

The company said its water consumption was so high last year because of temporary construction-related activities, such as concrete work, dust control and site preparation

Water demands occur long before sites become operational.  That 30 million gallons equates to 92 acre feet.  Someone needs to model the water use of 750 additional Texas data centers during the construction period.   That's water for the work and for the workers who surely need showers at the end of the day.  

A recent story in the Houston Chronicle indicated Texas data centers would go from using less than 1% of the state's water to 9% by 2040.  At a minimum that's a tenfold increase.  The study was done by the University of Texas.

The State of Texas has thrown the door wide open for these facilities.  That is why there are so many coming.  The newfound reticence of elected officials may be real and it may be for show.  

San Angelo and Tom Green County have four data centers exploring sites.  The Skybox/Emergent in San Angelo seems pretty far along and is actively being marketed.  Beacon Data Centers expressed interest and met with the community, which clearly told them to look elsewhere.  The other two sites have not been named, by interested party or location in the county.   

The picture is brutal on water alone.  No responsible elected official could allow this to happen on such an obscene scale.  

Update 5-13-26:  A mega data center development named "The Stratos Project" in Utah was approved by Box Elder County commissioners.  

Box Elder County, Utah gets 17 inches of rain, on average, per year.

Average annual rainfall for San Angelo is 21 inches.   

Stratos has a long way to go to become fully operational:

Developers say they will begin raising capital within 60 days and aim to start initial phases within months. The data center would likely not be in operation for ten years.

How did a Shark have so much success that far inland, in an area with so little water?  It won because local and state leaders prioritized out of state corporate interests above the people who elected them.  They did so "because the Undersecretary of the Air Force asked them to."

San Angelo has Goodfellow Airforce Base, which trains military intelligence and firefighters across all of the military's branches.  As of now there is no state group coordinating project development, but that could change.

Update 5-18-26:  A future water source for the City of San Angelo is aquifer water from Fort Stockton Holdings.  Fort Stockton has its own data center boom,  How much water will be available when the city needs it due to Tom Green County's data center boom (should it be realized)?

Update 5-25-26:  TCD reported:

a draft of Texas' 2027 state water plan estimates the state will need roughly $174 billion in water infrastructure projects over the next 50 years to avoid severe regional shortages during drought. It mentions nothing, however, about data centers.

Sumter is Latest PEU Player

The big money boys have found San Angelo according to Chamber Vice President Michael Looney.  Private equity underwriters (PEU) are behind numerous projects in San Angelo, Tom Green County and the Concho Valley.

One even shared his history with private equity at the recent data center public meeting.  That was Emergent founder and CEO Chris Sumter.  

Sumter noted he was part of the team that founded Vantage Data Systems which became a Silver Lake affiliate in 2010.  That should have been Sumter's first windfall.

Next he did a data center in Santa Clara with Acore Capital.  Now he heads Emergent Data Centers which has primarily worked with Blue Owl for project financing.

It does not appear Emergent itself has a private equity sponsor, but these relationships are private and can remain opaque.

Many data center projects are financed through joint ventures between developers and institutional equity investors, including pension funds, sovereign wealth funds, and infrastructure-focused private equity sponsors. The developer typically contributes expertise, entitlements, and project management capabilities while the equity partner provides the majority of the capital.

Sumter is the developer with the expertise and project management capabilities.  The City of San Angelo, Tom Green County and the State of Texas are contributors of entitlements (which can include incentives).  

Entitled sites offer a clear path to execution, reducing the uncertainty associated with early-stage development.

SA1 is promoted as "a municipal partnership built for speed" and having "exceptional municipal support."  Oddly, the City of San Angelo has no documents relative to that claim.

Representative Drew Darby made his position on data centers clear via a statement.  It closed with:

Texas taxpayers should not be subsidizing billion-dollar facilities. If a data center cannot pencil out without a government handout, that tells you something. I will support ending blanket tax abatements and redirecting those dollars toward the communities that actually bear the costs of this development. West Texas will never simply be a place to plant a server farm and hand the bill to ratepayers — not on my watch.

I hope that includes eliminating the current Texas sales tax break for the expensive equipment that fills these data centers.  Also, the U.S. Congress should finally eliminate private equity's preferred "carried interest taxation."  It has remained for decades despite widespread unpopularity.

The big money boys have found us and the only thing that will turn them away is charging them bigger money.  

Fire up the tax abatement and PEU preferred taxation grinders in the various Capital basements.  That vibration may be anathema to their hurdle rates.  Let the players play elsewhere.

Local Tax Abatements for Private Equity Backed Projects

The City of San Angelo officially renewed its tax abatement program at its last meeting.  Tom Green County has been active in that arena as well.  There are three recipients of such abatements, Apex Clean Energy, Peregrine Energy and Doral LLC.  All are owned by private equity underwriters (PEU).

Chamber Vice President Michael Looney informed the San Angelo Development Corporation Board that more private equity projects are interested in coming to the area.  He cited four data centers, the Skybox/Emergent effort in the city and three more in the county, with Beacon being the one identified to date.  

Skybox has been backed by Blue Owl Capital, which has had a difficult run of late as investors have fled its private credit offerings.  

Private equity affiliates pursue projects with the intent of increasing the future sale price of that company.  Their financial structure often is heavily debt funded which can cause a heavy interest burden in times of rising interest rates (as the rate tends to be variable) and difficult economic conditions (potentially with less revenue/higher costs).  

It is not unusual for a PEU affiliate to simply hand over the keys to the organization to lenders.  That is a consideration, as the timing for actual benefit to San Angelo citizens may coincide with the entity's stressed sale or closure. 

Promises of greater local taxes three to five years down the road may or may not materialize.  The State of Texas already ensured sales taxes on the billions ($) in expensive servers will not be paid.  Think about that the next time you have to replace your computer, phone or laptop.  

Politicians Red & Blue love PEU and increasingly, more are one.  The national trend has become local.  It's a sad day to see.  

SA1 Data Center Has Giant Hat, City Provides No Meat

The following public information request was submitted on April 27th.

“Please provide documents relative to the following information from Emergent Data Centers that references the City of San Angelo: Municipal Partnership Built for Speed 

"San Angelo has annexed the site and fast-tracked data center zoning by-right. The city has confirmed water and sewer capacity for full-scale development. This is a city-backed infrastructure project with committed resources."  

The document also states the City of San Angelo is providing "exceptional municipal support." Please provide documents delineating this exceptional municipal support. Thank you.” 

On April 29th city staff asked for clarification:'

This letter is to clarify what information you are seeking from the City of San Angelo. 

PLEASE CLARIFY THE DOCUMENTS YOU ARE REQUESTING.

On May 1st I replied with:

I request documents delineating the "committed resources" to this "city-backed infrastructure project" (Emergent/Skybox Data Center). Also, I request the specific levels of service the city is providing Emergent/Skybox to achieve the "exceptional municipal support" level, As the partnership is "built for speed" I request a projected timeline with key development steps and an anticipated start date. Thank you.

This morning I received:

The City of San Angelo has reviewed its files and has determined there are no responsive documents to your request.

No documents for a "city backed infrastructure project with committed resources."  How can that be?