Cloudburst Secures Tax Breaks For Central Texas Data Center

Cloudburst Data Centers secured a hefty tax abatement deal for a $14.5 billion project it’s planning to develop in Central Texas.

Guadalupe County commissioners greenlit an incentives package for a proposed data center campus that would straddle Guadalupe and Hays counties, located centrally within the Austin-San Antonio corridor, clearing a key hurdle for one of the region’s largest planned industrial projects.

The commissioners court approved an estimated $500 million tax abatement and a 10-year development agreement with CloudBurst Texas on April 21 for a 220-acre development, according to county documents and first reported by the San Antonio Business Journal.

Denver-based Cloudburst Data Centers is planning 10 to 12 buildings on roughly 142 acres in Guadalupe County, each ranging from about 70,000 to 250,000 square feet. County records peg the total investment at $14.5 billion.

The campus is set to be delivered in phases, with the first four buildings targeted for 2027, CloudBurst said in presentation materials. The project is expected to add 480 jobs over the next six years, per county documents.

The development agreement establishes a regulatory roadmap for permitting and construction and can be extended beyond its initial term. It also allows the developer to proceed under current county rules even if regulations change later, a provision that can reduce entitlement risk for large, multi-phase sites, the outlet reported.

The deal faced opposition from critics of the project’s water and power use. CloudBurst’s projected water use was estimated at 24,000 gallons per day, according to its presentation materials. Supporters emphasized the long-term tax base, particularly for schools.

The incentive package marked a major win for the applicant at the courthouse. A previous version failed in February, with commissioners requesting more information before reconsidering it, according to the publication.

Communities around the state have pushed back on new data center developments in recent months, and the opposition efforts have produced mixed results. Neighboring Hays County tabled a proposed moratorium on data center development earlier this year, and that county’s seat — the city of San Marcos — denied a $1.5 billion data center development on 200 acres within its city limits in February, citing water supply concerns.Over in Brazoria County, commissioners rejected a tax abatement sought by Nightpeak Energy for its proposed $3.5 billion Old Ocean Data Center campus. Nightpeak will likely still build its data center, according to prior reports.

— Eric Weilbacher