Zydeco bows out of data center

HUTTO — After facing mounting community opposition, Zydeco Development has pulled the plug on its plans for a data center.

The developer earlier submitted an application to rezone a 41-acre parcel at 450 Ed Schmidt Blvd. from multifamily residential to heavy industrial to build a mid-sized data center. The Hutto Planning & Zoning Commission held a crowded public hearing on April 7 and after two hours of testimony from residents, decided to continue the meeting on April 20.

However, on April 17, the city announced Zydeco had formally withdrawn its application, so the meeting was canceled.

“I think it’s great they listened to the people and took appropriate action,” said Mayor Mike Snyder. “While I may have thought it could have been a good project, I don’t think I was going to vote for it because I was going to follow the will of the people. I think we have to be happy to let the process work and in this case the process worked.”

“In this case the process worked.”

— Mayor Mike Snyder

Various reports indicate the data center could have pumped millions into the city’s tax base. It’s just the latest data center in the area that faced opposition, including facilities in neighboring Taylor.

The site chosen by Zydeco would have become a 225,000-square-foot, 70-megawatt data center surrounded by single-family homes. The developer had also submitted an application for a public utility district to support the data center, which has likewise been withdrawn.

Christine Benson and Katie Martin, two nearby homeowners, had started a petition drive against the data center, which could have forced the City Council to require a super-majority vote to approve the zoning change.

“I’m really excited and still in a little bit of shock that it feels like we maybe won this round,” Benson said. “We’re keeping an eye out to see if they decide to resubmit their amendment to rezone and also the PUD amendment. If that does happen, then we’ll be right back where we were on the Facebook group and getting petition signatures.”

Benson said the group’s next step is getting a city ordinance on the ballot that would restrict or regulate data centers from being built in residential areas. A similar initiative is in the works in Taylor by another grassroots organization.

Critics of data centers cite concerns about pollution, noise, drains on the electric grid and maintaining adequate water resources.

The withdrawal of Zydeco comes at a cost, supporters said.

Data centers are high-value projects that add to the tax base, making them attractive to city leaders. In the initial phase, they also create construction jobs. Afterwards, it takes a relatively small number of employees to operate a center, which is used for better connectivity, data storage and artificial intelligence, officials said.

“This is an opportunity for the city of Hutto to unlock hundreds of millions of dollars in taxable value by taking the existing infrastructure on an otherwise very constrained and restricted site,” Wes Gilmer, principal with Zydeco Development, told the P&Z board.

Zydeco Development was responsible for the MetCenter, Austin’s largest master-planned business park.

Gilmer described the proposed data center as being a preferable option for the community because the land was previously approved for a 173-unit multifamily development with retail, office and restaurant space, which could have affected traffic in the area.

“Not all data centers are created equal. What we’re proposing … is designed to be a low-impact, thoughtful neighbor with minimal burden on city utilities,” he said.

Residents received some support from the city during the April 7 meeting.

Howard Koontz, director of Development Services, told the P&Z board he did not believe the data center plan reflected the community’s vision for how Hutto should grow.

“As submitted, this proposal was not consistent with that vision. Thoughtful planning is a priority for the city, and we remain open to continued dialogue,” Koontz said.