Case File · San Marcos, Hays County, Texas
Eight hours. 130 speakers. Denied at 2:14 AM.
Highlander SM One LLC proposed a $1.5 billion data center on 199.49 acres at 904 Francis Harris Lane. After an 8-hour hearing with 130+ public comments, the San Marcos City Council voted 5-2 to deny at 2:14 AM on February 18, 2026. Water killed this project — 70,000 gallons per day during a historic drought.
Cited site read: 12/100 before Highlander filed a single document.
Francis Harris Lane, San Marcos — site of the $1.5B data center denied by city council
News coverage
$1.5B
Project Value
199.49 ac
Acreage
70K gal
Water/Day
130+
Public Comments
5-2 Deny
Council Vote
12/100
RealClear Score
San Marcos, Texas · 2025 — 2026
The complete timeline.
From drought to denial. Every date. Every speaker. Every decision point in the fight that water won.
2022 — Ongoing
Central Texas drought deepens — Edwards Aquifer hits historic lows
Hays County enters a multi-year drought that grows in severity. The Edwards Aquifer, the primary water source for the region, drops to historic lows. At least 14 Central Texas counties experience moderate to extreme drought including Hays, Travis, Williamson, Guadalupe, and Caldwell. This becomes the defining backdrop for every land use decision in the region.
Early 2025
Highlander SM One LLC proposes $1.5B data center on Francis Harris Lane
Fort Worth-based Highlander SM One LLC, led by managing partner John Maberry, files for a Preferred Scenario Map amendment on 199.49 acres at 904 Francis Harris Lane. The site sits between San Marcos and New Braunfels, adjacent to the Hays County Energy Power Station. Water would come not from the city of San Marcos but from Crystal Clear Special Utility District — a politically explosive detail.
Spring 2025
Opposition organizes — Data Center Action Coalition forms
Multiple opposition groups emerge: the Data Center Action Coalition, Save Our Springs Alliance, and the Hill Country Alliance. Shannon Hamilton, Executive Director of the Central Texas Water Coalition, warns that data centers could 'run a municipality out of water.' The opposition frames the fight around water — not jobs, not tax revenue, not noise. Water.
Mid-2025
Community meetings draw hundreds — water is the only issue
San Marcos holds multiple public meetings on the data center proposal. Residents raise concerns about the facility's proposed consumption of 70,000 gallons per day — over 25 million gallons annually. Michael Hernandez, a resident who has attended meetings for over a year: 'A lot of us are tired. We've been coming to these for over a year now.'
Late 2025
Planning and Zoning Commission reviews the application
The San Marcos Planning and Zoning Commission evaluates the Preferred Scenario Map amendment. John Maberry offers restrictive covenants aligned with a 'Data Center Community Guide.' The developer commits to cutting water usage in half, then half again from the original proposal. But the fundamental question — 70,000 gallons per day during a historic drought — remains politically unresolvable.
February 16, 2026
Hays County Judge Ruben Becerra proposes water-use moratorium
One day before the San Marcos council vote, Hays County Judge Ruben Becerra publicly proposes a moratorium on permits for large water-use developments. His statement: 'We are no longer just looking at a dry spell. We are looking at a potential catastrophe.' The moratorium proposal is not binding on San Marcos — but it signals that the county's top elected official is aligned with the opposition.
February 17, 2026 — 6:00 PM
Eight-hour marathon council hearing begins
The San Marcos City Council hearing begins at 6:00 PM. Over 130 residents sign up to speak. 125 register for citizen comment; 57 for formal public hearing testimony. Hundreds pack the chamber and overflow areas. Union construction workers in orange shirts advocate for the five-year construction job pipeline. The overwhelming majority of speakers oppose the project.
February 17, 2026 — Late Evening
Resident testimony dominates — water, drought, generational responsibility
Torrie Martin: 'You are either going to greatly harm your relationship with your community or you're going to buckle down and work with us and come up with an alternative.' Shannon Hamilton of the Central Texas Water Coalition warns of 53 data centers proposed regionally. Council members absorb five hours of citizen comment. A motion to postpone fails 3-4.
February 18, 2026 — 2:14 AM
Council votes 5-2 to deny — Amanda Rodriguez makes the motion
After over eight hours, Amanda Rodriguez moves to deny the Preferred Scenario Map amendment. Alyssa Garza seconds. The motion passes 5-2. Voting to deny: Rodriguez, Garza, Josh Paselk, and two additional members. Voting against denial (supporting the project): Matthew Mendoza and Lorenzo Gonzalez. Mendoza argued the site next to the power station was better suited for a data center than a neighborhood.
February 18, 2026
Developer retains right to refile in six months
Under San Marcos city rules, John Maberry can refile the Preferred Scenario Map amendment application after a minimum six-month waiting period. Whether the regional water situation will have changed by August 2026 is uncertain — but the political dynamics are unlikely to shift while the drought continues.
February 26, 2026
KUT reports 5 data centers on the horizon for Hays County
A week after the denial, KUT reports that five data center projects remain under consideration in Hays County, including two in Caldwell County that would directly impact Hays County water resources. Shannon Hamilton: the fight is 'just beginning.' The San Marcos denial did not resolve the regional data center pressure — it just redirected it.
The People Who Decided This Case
Key officials and community leaders.
A county judge. A water coalition director. Council members who stayed until 2:14 AM. And 130 residents who showed up.
Amanda Rodriguez
San Marcos City Council Member
Documented Record
Made the motion to deny the Preferred Scenario Map amendment, citing generational responsibility to protect water resources.
Made the motion to deny the Preferred Scenario Map amendment. Her framing — 'generational responsibility' — connected the vote to the broader water crisis rather than the specific project. This elevated the denial from a land use decision to a values statement.
Alyssa Garza
San Marcos City Council Member
Place 3
Documented Record
Seconded the denial motion, stating insufficient information existed for a genuine conversation about data center implications.
Seconded the denial motion. Her focus on information gaps — rather than outright opposition — suggested the council might reconsider with better data. But the underlying water scarcity cannot be solved by better information.
Josh Paselk
San Marcos City Council Member
Documented Record
Voted to deny despite publicly acknowledging the project could have generated $1.5B in tax revenue for the city.
Voted to deny despite acknowledging the economic benefits. His 'golden goose egg' comment revealed genuine ambivalence — he recognized the $1.5B in tax revenue but could not vote yes during a historic drought. This is the profile of a swing vote who might flip if water conditions change.
Matthew Mendoza
San Marcos City Council Member
Place 1
Documented Record
Voted in favor, arguing industrial use adjacent to the Hays Energy power station was preferable to residential development on the site.
One of two votes supporting the project. His argument — industrial use adjacent to a power station makes more sense than residential — was logical but politically inaudible during a drought. His support suggests a potential ally if the developer refiles.
Lorenzo Gonzalez
San Marcos City Council Member
Documented Record
Cast the second supporting vote, citing jobs and economic development benefits for San Marcos.
The second vote supporting the project. Focused on economic development arguments. Together with Mendoza, their two votes suggest the developer starts any refiling attempt at 2-5 rather than 0-7.
John Maberry
Managing Partner, Highlander Real Estate Partners
Documented Record
Proposed cutting water usage in half, then half again from the original proposal. Filed restrictive covenants and a Data Center Community Guide.
Led the development effort for Highlander SM One LLC. Proposed restrictive covenants and a 'Data Center Community Guide.' His water reduction commitments were substantial but insufficient against the drought narrative. Retains the right to refile after six months.
Ruben Becerra
Hays County Judge
Documented Record
Proposed a county-wide water-use moratorium one day before the council vote, characterizing conditions as a potential catastrophe.
Proposed a water-use moratorium one day before the council vote — a devastating political signal. As the county's top elected official, his public opposition created political cover for council members to deny. His moratorium proposal, while non-binding on San Marcos, set the regional political tone.
Shannon Hamilton
Executive Director, Central Texas Water Coalition
Documented Record
Identified 53 data centers proposed regionally and provided analysis framing the cumulative water impact across Central Texas.
The most influential opposition voice. Her organization provided the data and framing that connected the San Marcos project to the regional water crisis. Identified 53 data centers proposed regionally — making this fight about the cumulative impact, not just one project.
Torrie Martin
San Marcos Resident
Documented Record
Delivered public testimony framing the vote as a choice between the developer relationship and the community relationship.
Her testimony framed the vote as a choice between the developer and the community — not a technical zoning question. This emotional framing was more effective than any engineering argument.
Michael Hernandez
San Marcos Resident
Documented Record
Attended council meetings for over a year, representing sustained organized community opposition to the project.
His comment captured the exhaustion of sustained civic engagement. The community had been attending meetings for over a year — the opposition was not spontaneous but deeply organized and personally committed.
Opposition Record
Three organizations. One message: water.
The opposition unified around a single, devastating argument: you cannot build a water-intensive facility during a historic drought.
Central Texas Water Coalition
Executive Director: Shannon Hamilton · centraltexaswatercoalition.org
Focus
Water Resources
DC Projects Tracked
53 regional
Impact
Defined the narrative
“Data centers could run a municipality out of water.”
Data Center Action Coalition
Grassroots activist group · Focused on San Marcos fight
A grassroots activist group that organized community members to attend council meetings, prepare testimony, and coordinate with Save Our Springs Alliance and the Hill Country Alliance. Their sustained engagement — over a year of meeting attendance — demonstrated the depth of community opposition.
Save Our Springs Alliance & Hill Country Alliance
Established environmental organizations · Regional credibility
Two established Central Texas environmental organizations that brought institutional credibility and legal expertise to the opposition. Their involvement elevated the fight from a local zoning dispute to a regional environmental policy question. Their decades of advocacy around the Edwards Aquifer provided the scientific framing that council members needed to justify denial.
The Key Differentiator
Source records that existed before Highlander filed.
Every one of these source-record factors was visible in public data before the first application was submitted.
Edwards Aquifer at Historic Lows
The Edwards Aquifer — the primary water source for the entire region — was at historic lows before the project was proposed. At least 14 Central Texas counties were experiencing moderate to extreme drought. Any water-intensive project in Hays County was entering a political environment where water was the defining issue. This was visible in USGS data, Edwards Aquifer Authority reports, and local news coverage.
Crystal Clear CCN — External Water Dependency
The data center's water would come from Crystal Clear Special Utility District, not the city of San Marcos. This created a political problem: the city was being asked to approve a land use change for a project whose water supply was controlled by a separate utility district. The council could not impose water conditions on a non-city water provider.
County Judge Aligned with Opposition
Hays County Judge Ruben Becerra had been publicly vocal about water conservation before the data center was proposed. His moratorium proposal one day before the vote reflected that pre-existing position. The cited pre-filing record identified him as a likely opponent.
53 Data Centers Proposed Regionally
Shannon Hamilton's Central Texas Water Coalition was already tracking 53 data center proposals across the region before the San Marcos filing. The advocacy infrastructure — mailing lists, media contacts, scientific data — was already deployed. The San Marcos project walked into a pre-organized opposition ecosystem.
Year-Long Community Engagement Pattern
San Marcos residents had been attending data center-related meetings for over a year before the February 2026 vote. Michael Hernandez: 'A lot of us are tired. We've been coming to these for over a year now.' The opposition was deeply entrenched and personally invested — this was not a community that could be persuaded by a single town hall.
Peak Energy Consumption = 2.5x City Peak
The proposed data center's peak day energy usage would equal 2.5 times the entire city of San Marcos's peak consumption. This statistic — visible in the developer's own filings — was politically devastating. No community wants to learn that a single facility will use more electricity than the entire city.
The Pre-Filing Research
What RealClear finds at 904 Francis Harris Lane.
Before the first filing. Before the eight-hour hearing. Before 130 residents showed up to say no.
Site Analysis
Highlander SM One LLC — Francis Harris Lane
San Marcos, Hays County, TX — 199.49 acres, $1.5B
Material Constraints
- Edwards Aquifer at historic lows — Hays County drought since 2022
- Crystal Clear CCN water supply = politically toxic external dependency
- 70,000 gal/day during regional drought = automatic community opposition
- Hays County Judge publicly advocating water-use moratorium
- 53 data centers proposed regionally — anti-DC sentiment already saturated
Approval Pathway
PSA Map Amendment → P&Z → City Council VETO POINT
Community Risk
Water Risk
Political Signal
Comparable Flag
No water-intensive industrial project has survived organized opposition during a regional drought in Central Texas. 130+ residents spoke against this project in an 8-hour hearing. The community was mobilized before the developer filed.
Recommendation
EXTREME DENIAL RISK. Water-intensive project in a multi-year drought with historic aquifer lows. County judge publicly advocating moratorium. Four or more organized opposition groups. Do not proceed at this site without secured municipal water rights and community benefit agreement.
The Pre-Flight Checklist
Six source-record factors. All publicly available.
Every risk that killed this project was visible in public records before a single document was filed.
Edwards Aquifer historic lows visible in USGS data
Aquifer DataThe Edwards Aquifer Authority publishes real-time aquifer level data. Historic lows were documented months before the project was proposed. Any water-intensive industrial project in Hays County during 2025-2026 was entering a political minefield — and the data was publicly available.
Central Texas Water Coalition already tracking 53 data centers
Advocacy recordShannon Hamilton's organization was already monitoring data center proposals across Central Texas before Highlander filed. Their advocacy infrastructure — scientific data, media relationships, political connections — was ready to deploy. A cited community-risk review surfaces this organization as a near-certain participant.
County judge's water conservation posture = political signal
Political AnalysisHays County Judge Becerra's public statements on water conservation predated the data center proposal. His moratorium call was predictable from his existing political positions. A pre-filing source review identifies the county's top elected official as hostile to water-intensive development.
Crystal Clear CCN water supply = regulatory gap
Utility AnalysisThe decision to source water from Crystal Clear Special Utility District rather than the city of San Marcos created a regulatory gap the council could not bridge. The city was being asked to approve land use for a facility whose water supply was beyond their regulatory control. This structural mismatch was visible in the utility service area maps.
Community exhaustion from year-long engagement
Community risk reviewSan Marcos residents had been attending data center meetings for over a year. This level of sustained engagement signals deep opposition that cannot be neutralized by a single town hall or community benefit offer. The community was personally invested — they had reorganized their lives around this fight.
PSA Map Amendment pathway = full council political vote
Approval path reviewThe Preferred Scenario Map amendment process requires a full council vote — making the decision political rather than administrative. In a drought, with a county judge calling for a moratorium, and 130+ residents organized to testify, the political dynamics were overwhelmingly against approval.
The total cost of this entitlement failure:
Over a year of development team time. Legal fees for the PSA map amendment process. Community engagement costs. And the opportunity cost of pursuing a 12/100 site while competitors secured water-secure locations elsewhere.
A RealClear analysis costs less than one hour of attorney time.
What Happened Next
The aftermath.
San Marcos said no. But the regional data center pressure didn't disappear — it just moved.
Refiling Window
Six-Month Clock Ticking
John Maberry retains the right to refile the PSA map amendment after August 2026. Whether the drought improves, whether the political dynamics shift, and whether the developer restructures the water supply remain open questions.
Regional Pressure
Five More Data Centers in Hays County
KUT reported five data center projects on the horizon for Hays County just one week after the denial. Two in Caldwell County would directly impact Hays County water resources. Shannon Hamilton: the fight is “just beginning.”
Statewide Context
Nearly 400 AI Data Centers in Texas
Texas already hosts nearly 400 AI data centers with 53 more under consideration regionally. Public Citizen documented grassroots resistance growing across the state. San Marcos is not an outlier — it's the template for water-scarcity opposition in Central Texas.
The Lesson
Water Scarcity Trumps Economics
$1.5 billion in investment, thousands of jobs, and significant tax revenue could not overcome 70,000 gallons per day during a historic drought. In water-scarce regions, no amount of economic argument can overcome the fundamental question: where does the water come from?
Primary Source Documents
19 DocumentsEvery finding cited to the source. Click any document to preview it directly. Source-record patterns visible to experienced entitlement analysts months before the hearing.
Cited Brief
How RealClear built this assessment.
This source review is backed by a traceable source trail — real articles, real officials, real patterns.
News records reviewed
Officials identified
Comparable approvals reviewed
Opposition groups in record
Event Timeline
Key milestones in the entitlement journey
2024
Highlander Real Estate Partners files $1.5B data center rezoning
Late 2024
P&Z denies, cites Edwards Aquifer water constraints
Feb 2026
Hays County judge proposes building permit moratorium for large water users
Feb 2026
City Council denies 5-2, supermajority threshold not met
2024
Highlander Real Estate Partners files $1.5B data center rezoning
Late 2024
P&Z denies, cites Edwards Aquifer water constraints
Feb 2026
Hays County judge proposes building permit moratorium for large water users
Feb 2026
City Council denies 5-2, supermajority threshold not met
Key Actors
Decision-makers and their positions
City Council Majority (5-2 Denial)
San Marcos City Council
Voted 5-2 to deny — supermajority (6 of 7) required to override P&Z, making approval mathematically impossible
P&Z Commission
Planning & Zoning Commission
Initial denial triggered supermajority requirement at council, effectively killing the project
Hays County Judge
County Judge
Proposed building permit moratorium for large water users the day before council vote
San Marcos Utilities
City Water Department
Edwards Aquifer constraints make water allocation for data centers a non-starter at current capacity
Opposition Record
Organized opposition groups
San Marcos Neighborhood Groups
Hours of public testimony at both hearings
Tactics
Water scarcity framing, aquifer protection, environmental advocacy
Track Record
Successfully opposed all large water-use rezonings in San Marcos since 2024
Engagement Strategy
Water offset agreement before filing. Edwards Aquifer Authority consultation. Community water conservation fund.
Edwards Aquifer Advocates
Regional environmental coalition
Tactics
Aquifer recharge zone protection, scientific data presentation, media campaigns
Track Record
Repeated intervenor in Edwards Aquifer recharge-zone rezoning fights
Risk Triggers
What activates opposition
- Water consumption >10M gallons/year in drought-prone area
- Supermajority vote requirement (6 of 7 needed)
- Agricultural/conservation land conversion
- Power grid strain >100MW
Potential Allies
Groups that may support the project
San Marcos Economic Development
City economic development
Tax revenue and job creation
Highlander SM One LLC
Developer
Committed to resubmission
Jurisdiction Pattern
What history tells us about this jurisdiction
Approval history
Low approval rate reported for data center rezonings in Edwards Aquifer zone (2023-2026) — specific comparable cases not independently verified
Recent Shifts
Water scarcity and aquifer-recharge concerns are now a recurring basis for data-center rezoning denials in the region
Source read
The Edwards Aquifer is a non-negotiable constraint. San Marcos has denied all large water-use rezoning requests since 2024. The supermajority threshold (6 of 7 votes) makes P&Z denial effectively final.
Cited research compiled from 5 news articles, 3 government documents, and comparable data from 4 Edwards Aquifer zone projects
The Edwards Aquifer is a non-negotiable constraint
The Edwards Aquifer is a non-negotiable constraint. San Marcos has denied all large water-use rezoning requests since 2024. The supermajority threshold (6 of 7 votes) makes P&Z denial effectively final. Cited research compiled from 5 news articles, 3 government documents, and comparable data from 4 Edwards Aquifer zone projects
Theme distribution
How this was assembled: Every source record ties to a public source you can verify yourself — news coverage, hearing records, court filings, public testimony. No scraped gated platforms, no invented engagement numbers, no attributions that aren’t on the page. RealClear surfaces source records; your team decides. See our methodology for the full sourcing standard.
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Cited research summary · Not legal advice · Verify independently before making investment decisions