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.

Update 3-17-26: Chamber executive Michael Looney informed the Development Corporation board that Project Zeppelin's construction has been pushed out to Q4 2027. He also said the 380 with Skybox Data Centers needs a lot of work and for some issues to be resolved at the state level.

Councilman Keely Holding Data Center Public Meeting 12-29

Council Member Patrick Keely will hold a Data Center Development Community Meeting on Monday, December 29, 2025 from 5:30-6:30 pm at the Downtown Library in the Brooks & Bates Room.  The subject is the proposed Skybox Data Center on Highway 67 just north of city limits.  Council approved the sale of 350 acres of city owned land to Skybox in March 2025.  

Issues are noise pollution, water use, appropriate zoning, need for city services while residing outside city limits, traffic safety and electrical power use for the proposed 1.5 million square foot development distributed across six buildings (each of which is four stories high).

A flyer for this public meeting states the item will be voted on at Council's next meeting on January 13, 2026.  

Mayor Tom Thompson has been circumspect in his communications regarding the proposed data center, calling local information inaccurate without providing any meaningful information on the project or parameters Council plans to use to balance citizen needs with data center desires.  

The City has chosen thus far to prioritize Skybox's need for privacy regarding proprietary information and trade secret claims over sharing information with the public (based on City's response to my 12-8-25 public information request).  

Developers are usually not the end user of any project.  West Texas has been through a number of boom and bust cycles.  When projects go underwater, the owner hands the keys over to the bankers (the entity that provided the financing).  One giant financial juggernaut already compared data centers to shale.  

Enough communities have been through the data center development process for San Angelo's City Council to use an open, up front process where citizens' needs are clearly prioritized.  A Chamber video and an interview with the Mayor discounting social media information do not meet that standard.

Council may rise to the occasion on January 13, 2026 but citizens should be prepared to nudge them if they don't.  Attending Councilman Keely's community meeting on the topic tomorrow night is a great start for those who can attend.  

Update:  Baxtel.com states:

Skybox Datacenters is a joint venture between Rugen Street Capital and Bandera Ventures.

Concho Observer reported on an expert's assessment of Skybox's plans.   It's hard to believe anyone can assess the situation given what little information has been released to date.  The expert is from a think tank whose board is loaded with people from vested TechGod interests, Founders Fund (Peter Thiel), Patreon, & Paladin Capital.  The positive "lack of abatement ask" is simply due to the project's location being outside city limits. (see Update 1-5-26 for more accurate information)

ConchoValleyHomepage ran a story on the community meeting.  It indicates Skybox is yet to purchase the land for any data center development.  

Note:  This is also posted on PEUReport, my private equity oriented blog.  The two are overlapping more and more.

Update 12-30-25:  Concho Valley Homepage reported on the meeting.  Concho Observer also ran a piece on the meeting.

Update 1-5-26:  The City annexed the land on the same date it agreed to sell the land to Skybox Data Centers, 3-4-25.  It was not discussed during the meeting, simply passed as part of the consent agenda for that meeting.  

Data Center Information Absent from COSA Stocking

On 12-8-25 I submitted the following public information request (PIR) to the City of San Angelo:

Please provide documents, communications, emails and texts relative to the City of San Angelo's economic development arrangement with Skybox Data Centers or whichever legal entity is developing the data center on former city land within the City Farm area, just outside city limits to the northeast of town. This information could include a projected timeline, the city's plans to annex the land or develop a special arrangement where the city provides services (police, fire, water, etc.) to an entity not within city limits, specific financial or tax incentives, and any other inducements, monetary or in-kind services. The Development Corporation website mentions the project with its statement: "Facilitated data center site development tied to renewable energy access." My request is relative to this specific City of San Angelo effort.

The city's reply was a letter to the Texas Attorney General requesting to withhold the requested information for a number of reasons which include:

1.  Attorney-Client Privilege

2.  Confidentiality of Certain Economic Development Information

3.  Third Party Vendors Implicated in Request 

4.  Information Requested Involves Privacy or Property Interests of a Third Party

5.  Confidentiality of Trade Secrets and Certain Commercial or Financial Information

Vice President of Economic Development for the Chamber of Commerce Michael Looney released a podcast on data center development on 12-15-25.  (One week after my request)

Mayor Tom Thompson spoke with Concho Valley Homepage about data center development on 12-22-25.  (Two weeks after my PIR.)

He said most information about data center development has "been inaccurate."  Yet, the City of San Angelo is steamrolling efforts to get accurate information.  

The City has a requirement for third party vendors to comply with public information law.  It's in their standard contract language.  

Michael Looney said in his recent podcast that private equity is very interested in San Angelo and that our community could be like Austin in the 1980's.  He didn't say that private equity is loathe to share the most basic information, be it the name of the contracting entity, who is involved in the project and standard financial information.  

We'll see what comes before the Development Corporation or City Council regarding data center development, if anything.   Big money behind such projects is very secretive.

Update 12-29-25:  

Council Member Patrick Keely will hold a Data Center Development Community Meeting on Monday, December 29, 2025 from 5:30-6:30 pm at the Downtown Library in the Brooks & Bates Room. The subject is the proposed Skybox Data Center on Highway 67 just north of city limits. Council approved the sale of 350 acres of city owned land to Skybox in March 2025. 

Issues are noise pollution, water use, appropriate zoning, need for city services while residing outside city limits, traffic safety and electrical power use for the proposed 1.5 million square foot development distributed across six buildings (each of which is four stories high). 

A flyer for this public meeting states the item will be voted on at Council's next meeting on January 13, 2026.

ConchoValleyHomepage ran a story on the community meeting.  It indicates Skybox is yet to purchase the land for any data center development.   

Update 12-30-25:  Concho Valley Homepage reported on the meeting.  Concho Observer also ran a piece on the meeting.

Update 1-5-26:  The City of San Angelo annexed the land is 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.  The item was approved as part of the consent agenda and not discussed during the meeting.

Newsflash: City Promotes Gaddy

The City of San Angelo announced a new Economic Development Executive Director.  It is the current Assistant Finance Director Ryan Gaddy.  He replaces Assistant City Manager Michael Dane, who acted as in that role since Guy Andrews surprise retired in August 2022.  Dane will retire from the City on January 2, 2026.

Gaddy's appointment speaks to the current stance of the Development Corporation, creating financial packages for new employers (regardless of how few actual jobs are provided on a long term basis).  Council approved an 85% tax abatement for three years for Peregrine Energy's Project Zeppelin.  The City would receive $351,000 in taxes over years 1-3, while Peregrine gets a $2.4 million tax break.  

The Development Corporation under his leadership "facilitated data center site development tied to renewable energy access."  And none of that has come before City Council to date.  

It's unclear which Texas data centers will have the required power to operate.  CNBC reported:

Cheap land and cheap energy are combining to attract a flood of data center developers to the state. The potential demand is so vast that it will be impossible to meet by the end of the decade, energy experts say.

Quote worth noting from the story: 

“We know it’s not all real. The question is how much is real.”

Hopefully, City Council and Executive Director Gaddy won't give away the store to Skybox or its major customers, AI or otherwise.  One might expect Council to come up with some parameters for such development.  

Surely Skybox needs access to city water, fire and police services.  Providing those for an entity outside city limits is doable.  Pricing that at the margin is asking Skybox to pay the incremental costs for adding that new level of service.  Add massive tax breaks, like Project Zeppelin's, and the city may not achieve that shift from residential dominated tax collections to majority corporate contributed.  

It remains to be seen what subsidies the city plans to provide Skybox.  Michael Dane's retirement letter to the City did not mention future plans and it may just be fishing area streams and lakes.  Or he could be fishing for city subsidies on behalf of an economic development target company or two.

Dane can lever his public service experience on behalf of current or future private sector efforts.  Former Assistant City Manager Elizabeth Grindstaff did just that with her work for Texas Pacifico Railroad and then Texas Central Partners, a developer of a high speed rail project between Houston and Dallas.  Grindstaff is currently a client services leader with engineering firm Freese & Nichols.  

The hiring finally gave the Development Corporation news it can post to its website.  I took the liberty of mocking up such a piece and it's the lead image for this article.  Hopefully, it's an improvement from the prior page (AI generated?).

Another new player is in place.  Stay tuned for future developments on the economic front.  

Update 12-16-25:  San Angelo economic developers told bitcoin miners "no" twice.  They did not say it was the Lancium crew which turned into Stargate's Giant AI facility.  They did so in a podcast which can be viewed below:

Update 12-20-25:  The Real Deal reported:

Bolt Data & Energy announced it raised $150 million in capital and struck a partnership with Texas Pacific Land Corporation, which is investing another $50 million into the venture, according to a joint press release Wednesday. The tie-up positions Bolt Data to develop large-scale data centers on Texas Pacific’s sprawling West Texas holdings, as demand for energy-hungry AI computers accelerates, Bloomberg reported.

Update 12-24-25:  City of San Angelo officials spoke with Concho Valley Homepage regarding possible data centers. 

Update 12-29-25:  

Council Member Patrick Keely will hold a Data Center Development Community Meeting on Monday, December 29, 2025 from 5:30-6:30 pm at the Downtown Library in the Brooks & Bates Room. The subject is the proposed Skybox Data Center on Highway 67 just north of city limits. Council approved the sale of 350 acres of city owned land to Skybox in March 2025. 

Issues are noise pollution, water use, appropriate zoning, need for city services while residing outside city limits, traffic safety and electrical power use for the proposed 1.5 million square foot development distributed across six buildings (each of which is four stories high). 

A flyer for this public meeting states the item will be voted on at Council's next meeting on January 13, 2026.

ConchoValleyHomepage ran a story on the community meeting.  It indicates Skybox is yet to purchase the land for any data center development.  

 

Dane's Leaving Punctuates Council Meeting

The accolades rolled in from City Council and City Manager Daniel Valenzuela for the retiring Assistant City Manager Michael Dane.  The compliments came after Council returned from Closed/Executive Session.  Daniel noted this was Dane's last City Council meeting.  

Mayor Tom Thompson called Dane "a God send."  Councilman Tommy Hiebert noted Dane's creative financial mind.  

Dane created and stoked multiple pots of money throughout city government.  His going away should have shown city fund balances over the last decade.  Their number and size grew significantly.

One of those unspent pots is $2 million for Animal Shelter renovations, originally approved by Council in February 2023.  Yes, it's nearing three years since staff cited the urgent need for facility improvements/updates.  Fortunately, with professional Shelter management a better plan is underway, one that has a chance of actually happening.

By not spending the borrowing, the City had the opportunity to earn interest on those funds.  In 2025 the city earned so much interest on unspent financing that it owed $1.5 million to the IRS.

Dane leaves the City but plans to remain in San Angelo.  What opportunities might arise for the former interim Economic Development Executive Director, a role he held since September 2022?  

Skybox Data Centers' planned AI facility on the northeast side of town sits on former city land.  Dane has been facilitating that development from the city and development corporation side.  Might he switch and facilitate from the private sector/AI side?  

Who knows, the man may just relax and enjoy his retirement.  Time will tell...

Update 12-13-25:  The new Economic Development Director is the current Assistant Finance Director Ryan Gaddy.  That speaks to the current stance of the Development Corporation, creating financial packages for new employers (regardless of how few actual jobs are provided).

CNBC reported:

Cheap land and cheap energy are combining to attract a flood of data center developers to the state. The potential demand is so vast that it will be impossible to meet by the end of the decade, energy experts say.

Quote worth noting: 

“We know it’s not all real. The question is how much is real.”

Update 12-20-25:  The Real Deal reported:

Bolt Data & Energy announced it raised $150 million in capital and struck a partnership with Texas Pacific Land Corporation, which is investing another $50 million into the venture, according to a joint press release Wednesday. The tie-up positions Bolt Data to develop large-scale data centers on Texas Pacific’s sprawling West Texas holdings, as demand for energy-hungry AI computers accelerates, Bloomberg reported.

 Update 12-29-25:  

Council Member Patrick Keely will hold a Data Center Development Community Meeting on Monday, December 29, 2025 from 5:30-6:30 pm at the Downtown Library in the Brooks & Bates Room. The subject is the proposed Skybox Data Center on Highway 67 just north of city limits. Council approved the sale of 350 acres of city owned land to Skybox in March 2025. 

Issues are noise pollution, water use, appropriate zoning, need for city services while residing outside city limits, traffic safety and electrical power use for the proposed 1.5 million square foot development distributed across six buildings (each of which is four stories high). 

A flyer for this public meeting states the item will be voted on at Council's next meeting on January 13, 2026.