Texas’ AI boom and the tide of data center companies chasing it have arrived in the Waco area.
Lacy Lakeview and McLennan County are negotiating the area’s first large-scale data center project, valued at some $10 billion on 520 acres of farmland west of Elm Mott. Across the bargaining table is Infrakey, a data center company formed in March.
Infrakey purchased the farmland in June, the same month the Lacy Lakeview City Council signed a memorandum of understanding with the company.
The “Lacy Lakeview Data District” depicted in the company’s online material shows a scale of industrial development and investment unmatched in McLennan County’s history: acres of computer hardware, substations and a 1.2-gigawatt gas-fired plant capable of powering about 300,000 homes.
The impact of the $10 billion tax value at buildout is not lost on Lacy Lakeview Mayor Charles Wilson.
“For the city, a tax base of this quantity is a paradigm-changer for us,” Wilson told the Bridge on a Tuesday call. “We’re obviously keen on seeing it get done.” Lacy Lakeview currently has a tax base of $649 million.
The suburban town is less than 5 miles north of downtown Waco and counts 7,000 residents. Wilson hopes to see the project break ground sometime next year.
Collecting property taxes on the unincorporated site would normally require annexation. However, the site is in Waco’s extraterritorial jurisdiction, meaning that Lacy Lakeview would likely have to work out a deal with Waco allowing Lacy Lakeview to annex it.
The project would be the biggest taxpayer in McLennan County by far and would also pay millions of dollars a year in taxes to Connally ISD and McLennan Community College.
Data centers across the country have been criticized for draining water supplies, straining power grids and exacerbating air and noise pollution.
Available materials on the Lacy Lakeview project do not give a full picture of those impacts.
Infrakey officials acknowledged an email from the Bridge but did not provide anyone to interview. The Bridge was unable to reach a company representative at the listed phone number.
Felton said the company is in the process of furnishing more details for the Waco-McLennan County Economic Development Corporation to assess. Felton sits on the three-member board of the city-county entity, which uses a fund generated by property tax revenue to incentivize industries.
The high-voltage debates surrounding AI infrastructure seen elsewhere may be difficult to avoid for Infrakey or local officials supporting the project.
The Bridge interviewed several residents and business owners bordering the project site, nearly all of whom expressed shock, unaware that survey stakes in the farmland signal a gigawatt-scale data campus.
Bob Beechner, a retired Waco firefighter living a quarter mile west of the project area, feared his rural community would become unrecognizable, consumed by a “techno industrial” zone.
“That’s a bombshell, man,” he said.
Taking stock
Now-deleted online marketing materials from Infrakey encouraged the county to use its permitting authority to achieve an 18-month development timeline. But Felton said the facility’s water use and air pollution impact will have to be studied first.
“The amount of water needed is a big issue, and then also emissions, air quality,” Felton said Tuesday. “All those things have to be analyzed so that we’re totally understanding what the consequence of operations would be besides the positive impacts of growing the tax base.”
The 1.2-gigawatt gas-fired generator proposed for the site would be larger than any power plant currently operating in McLennan County, eclipsing the Sandy Creek coal plant’s capacity of 900 megawatts.
The power plant would likely minimize disruptions to the electric grid, which according to some reports have accompanied other power-hungry data center developments.
But any large natural gas plant could risk polluting the area with hazardous gases, including nitrogen oxide, benzene and formaldehyde, each associated with a range of negative health effects.
Other Infrakey project documents obtained by the Bridge suggest the facility will use a mix of on- and off-site electricity, citing multiple solar arrays and power plants in Central Texas. Battery energy storage is shown to be integrated with the gas-fired generation system as well.
Mayor: We have the water
Felton and Mayor Wilson say they are confident the facility will not endanger the area’s water resources, noting plans for water reuse technology and treated effluent, as well Lacy Lakeview’s water surplus.
“We as a city are only using 20% of the water that we are contracted for,” Wilson said.
Lacy Lakeview gets most of its water from the city of Waco, contracting for 2.1 million gallons a day.
Lacy Lakeview already plans to buy 665,000 gallons a day of cleaned wastewater from the city of Waco, according to a regional water plan.
“I don’t foresee water becoming a crunch for us or frankly, for anyone in McLennan County,” Wilson said.
If the facility uses what’s called a closed-loop cooling system to manage the temperature of computer chips, it may require millions of gallons to fill the system at first but far less afterwards, as the evaporated water is continually recovered and recirculated.
Felton also said the economic development board needs to be sure Infrakey can finance a project of this size. Other than road work, the company has promised to cover 100% of the facility’s capital expenses, meaning local governments would not need to issue bonds for them.
Some of Infrakey’s management, including Chairman Bill Barney and CEO Braham Singh, have considerable experience in the data center and telecommunication industry, mostly in Asia.
Sujeeth Draksharam, who handles government and public communications for the company, was appointed by Texas Governor Greg Abbott to the Texas Commission of Licensing and Regulation board in 2022. Felton said Draksharam’s connection to the governor gave him peace of mind that Infrakey was legitimate.
‘Who cares about you guys?’
Many of the residents surrounding the land Infrakey purchased moved to the area for its bucolic charm.
Jared Cronin, a member of the Ross Volunteer Fire Department, recalled a boyhood memory in the same pastures that may hum with silicon chips in the near future. He was wrangling escaped cows.
“Most people in the area are out there because they like the rural life,” Cronin said. “I think I can speak for a lot of us that it’s one of those things, where, if this does go through, I think we’ll be selling out and moving out farther. I haven’t met anybody that’s real excited about it. I’ll put it that way.”
Bryant Stanton, a widely known artist who operates Stanton Studios, a stained glass business on Rogers Hill Road, also opposes the project.
Stanton, like Mayor Wilson, viewed a data center as a paradigm-changer, but one that disfigured a landscape he had come to love.
“It’s rural… that’s what we like about it,” Stanton said. “For our mayor not to consider us, I take that as an affront. It’s like, ‘Who cares about you guys?’ ”
He and Beechner, the retired Waco firefighter, were unmoved by the project’s tax revenue projections when presented with Infrakey’s $10 billion figure.
Wilson said he wants residents to understand that the project is at a very early phase of negotiations.
While he did not have plans to schedule a public outreach session on the project, Wilson reiterated that Lacy Lakeview’s city council meetings are open to the public and also livestreamed.
This story first appeared in The Waco Bridge. To get stories like this delivered straight to your inbox, sign up for the Waco Bridge newsletter at wacobridge.org/newsletter.
