Zydeco Pivots From Apartments to Data Center Project in Hutto

An Austin developer is looking to trade rooftops for server racks in one of the metro’s fastest-growing suburbs.

Zydeco Development Corporation, the firm for Southeast Austin’s sprawling MetCenter business park, is seeking approvals to build a roughly 225,000-square-foot data center in Hutto, about 25 miles northeast of downtown. The proposal, slated for review by the city’s Planning and Zoning Commission and first reported by the Austin Business Journal, would transform a 41-acre site at 450 Ed Schmidt Boulevard from planned multifamily use into light industrial.

The shift scraps earlier plans for a 173-unit apartment project and commercial space, replacing it with a mid-scale data facility and adjacent mechanical yard. Final approval would rest with the Hutto City Council, with a final vote expected in May. If greenlit, infrastructure work could begin in 2027.

The proposal for the data center ties heavily to Zydeco’s track record at MetCenter, a 550-acre campus that has landed tenants like AMD and CyrusOne. The developer is framing the Hutto project as a lower-impact alternative to housing, pointing to reduced traffic, large setbacks and limited water usage via a closed-loop cooling system. Plans call for 300-foot buffers, 5 acres of green space and sound mitigation measures, including acoustic barriers and enclosed equipment, according to the publication.

Not everyone is buying it. More than 30 nearby residents have submitted opposition letters, raising concerns about power demand, water consumption and potential hits to home values, according to the publication. Those worries echo broader tensions tied to the data center boom, where tax base gains often collide with infrastructure strain.

Zydeco argues the site is uniquely suited for the use, sitting next to an Oncor substation and transmission lines — critical infrastructure for power-hungry facilities. Like other operators, the project would need to secure grid capacity and fund system upgrades before moving forward.

The proposal comes as data centers continue to flood the Austin region, particularly north of the city where land is cheaper and utilities more accessible. Nearly 30 projects have been developed or proposed in recent years, according to the outlet, representing at least $25 billion in investment.

Hutto has emerged as a key target, with firms like Colovore and Iron Mountain also circling the market.

— Eric Weilbacher