Presidio
The dusty outskirts of Presidio could soon be covered in warehouses of data centers. Two proponents of a data center complex sought early interest in a deal to build within the industrial zone from the Presidio Municipal Development District Board.
“What we ask for from the county is large portions of land,” said Gerardo Barrera, a founding partner at Lead Capital, a financial services firm from Mexico City that is involved in the proposal. He told the board on June 3 that Lead Capital investors are seeking between 200 and 250 hectares of land, or the equivalent of a square mile, from both the city and county of Presidio.
Their initial proposal, which has not been formally submitted, would include building a gas generator plant to ensure constant power for a 100 megawatt data center complex. The presenters downplayed the skepticism that has met data centers elsewhere in Texas and across the nation, and stressed that the site would follow environmental regulations.
“It’s a great opportunity for the county, and a lot of counties are doing it.” said Jesus Leyva, a representative from Maachi, a local company affiliated with Lead Capital, on the proposal. “Having the municipality as a partner can create long-term economic investment.”
Texas has become a top destination for the data center gold rush, with over 400 built already and another 248 on the way. An analysis by the Texas Tribune found that data center builders have started seeking out rural and unincorporated areas where regulation is limited and they can proceed despite sometimes stiff local resistance.
Data center sites require a huge amount of land and water resources. A 100 megawatt data center would draw the same amount of electricity as 50,000 homes. Residents living near data centers across the country claim they cause toxic air and water pollution, and spiking energy prices. A constant low level hum from the whirring processors can be heard for up to two miles away, causing distress and anxiety, according to critics of the centers.
The economic benefit is murky. Functioning essentially as a warehouse for processing units, data centers don’t require long-term employment in the same way that a factory does. The jobs created are usually limited to the initial construction and ongoing maintenance. Texas misses out on at least $3.2 billion dollars every year in state tax revenue from data centers, a figure that was released by the comptroller’s office. Local tax opportunities are also limited.
Leyva estimated that the first phase of the project would generate 300 jobs for the 18 months of construction, and then around 80 jobs long term. Barrera said that no public money would be required for the first phase of the project. They said that there are already interested investors, but the exact customer for the data center has not been identified. This would be the first data center project for Lead Capital and Maachi.
“Here we’re providing the needs of these big tech companies, where gas is cheap, and we can provide access to Mexican workers where the labor is cheaper,” said Barrera when explaining why Presidio was an attractive site. The industrial site north of the city provides access to roads and grid-tied power lines. The LNG terminal and the proposed geothermal power plant could augment the proposed gas power plant.
“Data centers bring everyone together because it will make money for y’all, and it’ll make money for us,” said Leyva. Leyva is a native of Presidio, and his company Maachi is registered in town, but he says that he lives and works out of San Antonio. Barrera is based in Mexico City.
John Kennedy, the executive director of the municipal development district, and Board President Laura Portillo recommended the investors submit a formal written proposal and engage with the community and city council over concerns about the impact to local health and the environment.
“There was a thought that a smaller-scale data center could be in the mix for the master plan for the industrial park,” said Kennedy, while noting that the risks to air pollution and water use would have to be addressed.
Board Treasurer Jiovannie Escontrias expressed interest in the project, noting that the city is facing a $400,000 budget shortfall. The investors said that in addition to building infrastructure they would also consider paying for the hazmat training necessary for the fire department to deal with the sensitive processors. The training represents a substantial cost to the city.