No Zoning District

The code proposal entering final reading would have admitted data centers only in Heavy Industrial, through a conditional-use permit approved by council. That was the path council directed in April and advanced on first reading May 5—not the city's preexisting effective code. The markup also carried setbacks, screening, a noise limit and a bar on potable water for cooling. Gonzalez's amendment did not delete that definition or those operating standards. It changed the proposed land-use matrix before final adoption.

That produces an odd-looking code: rules for a use that no zoning district admits. During the meeting, the city attorney explained that the specific prohibition in the matrix controls the broader language. The city was still preparing a consolidated code after the floor amendments at this reporting cutoff; its code-update page directs readers to the video for changes made from the dais.

The Highlander SM One applications concerned 199.49 acres west of Francis Harris Lane. The tract included land inside San Marcos and land in its extraterritorial jurisdiction. No site plan was before the commission. Planning and Zoning recommended the land-use requests 6–2 after a long January hearing.

This was an entitlement hearing, not a construction-permit or site-plan hearing. In the preliminary record, an unsigned draft covenant proposed a 75,000-gallon daily ceiling and closed-loop cooling. The packet named Crystal Clear Special Utility District for water, Pedernales Electric Cooperative for power and San Marcos for wastewater. The applicant and supporters argued the project would add construction jobs and tax base beside an existing power plant; city GIS marked the tract outside the mapped floodplain, Edwards Aquifer Recharge Zone and San Marcos River Corridor. Those were proposals and attributed benefits—not findings about an approved or operating campus.

Council ended that route on February 17 by voting 5–2 to deny the Preferred Scenario Amendment. Because that prerequisite failed, the zoning case was not heard. The June prohibition therefore did not kill an active version of the January project.

The code rewrite followed its own track. On April 21, council backed the Heavy Industrial conditional route 6–1; Amanda Rodriguez's full prohibition failed 3–4. By June, Gonzalez had changed his vote. His amendment passed 4–3, then all seven members approved the larger code package. Agreement on the code did not erase disagreement over this use.

The boundary matters. Spectrum News reported that CloudBurst had already broken ground near the San Marcos–New Braunfels border, beyond San Marcos's zoning reach; this amendment does not stop it. Hays County's June 23 resolution paused only discretionary actions within the county's existing authority—it did not create countywide zoning. The Tribune reported on June 30 that no data-center project was then proposed inside San Marcos city limits.

The water argument accumulated a number large enough to travel on its own: 75,000 gallons per day. In the January packet, that figure appeared in an unsigned preliminary covenant. It was a ceiling, contingent on zoning approval that never arrived. The applicant's projected total campus use was lower: 20,000 to 35,000 gallons per day. Separately, the applicant proposed closed-loop, non-evaporative cooling.

Multiply the ceiling by 365 and it becomes 27,375,000 gallons. Apply the same arithmetic to the projection and the range is 7,300,000 to 12,775,000. Those annual figures describe arithmetic, not an operating campus. The site was unbuilt, and no consumption was measured.

Power carried a similar risk of false precision. An earlier applicant pitch reported by the Austin Chronicle described five buildings at roughly 76 megawatts apiece—about 380 megawatts. The city packet contained no verified final load or utility design, so that number is not a final project specification. It remains an attributed early pitch.

Hughson's objection was not an endorsement of the rejected campus. She preferred the Heavy Industrial route because every application would still return to council for a public yes-or-no decision. If cooling or power technology improved, she argued, San Marcos would have preserved an option. Josh Paselk echoed her. Gonzalez answered that council could amend the code again when the facts changed.

“As long as it's still up to us, yes or no, I think we should at least allow the possibility.”

Mayor Jane Hughson · June 16, 2026

The next argument may take place outside council chambers. Texas Sen. Paul Bettencourt told The Texas Tribune that he planned to challenge San Marcos under state laws governing development moratoria and local regulation. Land-use lawyers quoted in the same report disputed whether a zoning amendment is the kind of moratorium that statute covers and pointed to San Marcos's home-rule zoning authority as a materially different posture from county moratoria. As of August 20, 2026, this reporting had identified no filed lawsuit or attorney-general opinion resolving the question.

The Tribune and Spectrum News described San Marcos as the first Texas city to prohibit data centers citywide. That is their statewide characterization, not the product of an exhaustive audit here. It also says nothing about county land beyond San Marcos's zoning reach.

The official recap and video show council adopted the matrix change; the pre-floor markup retained the data-center standards, but the city had not posted a consolidated Exhibit A by July 9. Under the adopted matrix, a new application has no listed zoning district unless the code changes. The January applicant never reached that line; four votes drew it for whoever comes next.

In the weeks after the June vote, the state took up the same question. On August 3, Gov. Greg Abbott directed the Public Utility Commission and ERCOT to audit the data-center projects moving through the grid-connection queue and to pause new approvals until that review is finished. State officials and reporting put the queue at roughly 474 gigawatts of pending requests, most of them data centers, and the Texas Tribune reported that fewer than one in ten data centers had complied with state power- and water-use reporting. Abbott, who had courted the industry, tied the pause to the same grid and water strain San Marcos council members cited in June. The audit does not override the city's zoning change, and it reaches only projects that connect to the grid, not those that supply their own power; Bettencourt has still filed no challenge. The water and power questions San Marcos answered inside its own code are now the state's to weigh.