(This story was updated to add new information.)
A large-scale data center may be on its way to Nueces County, according to local economic development and company officials.
A press release issued by the Corpus Christi Regional Economic Development Corp. announced the news May 6, stating that the company, Hut 8, had picked Nueces County “as the preferred location for Beacon Point, a $9.8B multi-phase, multi-tenant landmark AI data center project.”
If the proposal reached fruition, the project would be “positioned to become one of the largest data center campuses in the state,” according to the CCREDC’s message.
It’s a project that would be “a catalyst for growth in the tech sector for our region,” wrote Aaron Bowman, CCREDC president and CEO.
“With approximately 200 full time jobs with an average annual salary of $118,000 and thousands of construction jobs specializing in electricians and other skilled trades, this kind of investment brings opportunity to local families and growth to our local economic base,” he wrote.
It’s not a done deal at this point.
Key components, such as decision-making on potential economic development agreements, are still pending, and the company is also considering other sites, according to local officials.
The prospective site, purchased in December, is 525 acres of farmland located across from the Lon C. Hill power substation, Bowman said.
Under plans, Hut 8 would build the facility, then lease it as a data center to “with someone who meets the capability,” he said.
Where would the water come from?
Data centers are well known for high water consumption — a particular interest, given the region’s crippling drought — but local officials have expressed confidence that the data center would not have measurable impact on supply.
That’s because municipal water would be used exclusively for traditional facility needs, such as restrooms, according to CCREDC’s news release. That need is estimated to total about “10,000 gallons per day, comparable to the daily water use of a small commercial facility such as a restaurant,” it states.
Municipal water will not “be used for cooling at any point during the life of the facility,” the CCREDC’s message continues.
“The cooling system uses a closed loop design that circulates water through sealed piping, filled once with water sourced from outside Nueces County and expected to remain in use for approximately four to seven years, requiring no ongoing consumption and no draw from local sources,” it stated.
It was not immediately clear where the water for cooling would be sourced from, other than from outside the county.
Company representatives responded to a May 6 Caller-Times message that included a series of questions, but stated they would be in contact May 7.
There hasn’t been a formal request for more minor water services, such as for restrooms, but the facility could be what is considered an out-of-city-limits customer, according to City Manager Peter Zanoni.
“Their site engineer and company representatives have had preliminary discussions for [Corpus Christi Water] water service for emergency fire [suppression], and water service for their offices,” he wrote in a May 6 message to the Caller-Times. “The meter size would be a 2 inch meter, similar to a meter size of a fast food restaurant.”
Providing water for the cooling processes wouldn’t be possible, according to Zanoni.
“With our current water supply/demand challenges, CCW would not be able to supply a multi million a day water need for a new data center,” he wrote.
In a May 6 message to the Caller-Times, Chloe Torres, Texas Campaign for the Environment’s Coastal Bend regional coordinator, expressed doubt about Hut 8’s proposal to use a closed-loop system.
“There is legitimate skepticism about the viability of closed-loop water systems for data centers like the one being proposed by this project, not to mention the other negative environmental and social concerns associated with data centers,” she wrote.
The county’s role
The company had wanted abatements, said Nueces County Commissioner Mike Pusley, but had been told that would likely not be considered.
The county, though, may consider other types of agreements, such as a payment in lieu of taxes program — also known as a PILOT — depending on the numbers, he said.
It’s expected that an item will be on the May 13 Commissioners Court agenda for executive session, Pusley said, but there won’t likely be public discussion until the May 27 meeting at earliest.
The county won’t make any decisions that would negatively impact the water supply, he added.
Pusley said he intended to drive out to the area, but that he didn’t believe the property was immediately next to neighborhoods.
“Data centers … aren’t exactly the most popular thing across the country,” he said. “You hear lots of stories about their impact on communities, and we are as concerned as anybody else about that. We have a lot of questions to ask and they have a lot to answer.”
One of those matters is power, he said.
“That’s one of the things they’re going have to address with us before we would move forward on this,” Pusley said. “I’m not going to do anything that has a negative impact on people that live in and around that area.”
Who is Hut 8?
Hut 8 on its website is described as an “energy infrastructure platform integrating power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive technologies.”
The tenant for the potential Nueces County site is confidential, the company’s press release states, but it is referred to as a “a high-investment-grade company” that will “deploy dedicated compute infrastructure at the campus to support AI training and inference workloads at hyperscale.”
It’s expected the first two phases of the project will amount to a $17 billion capital investment, according to Hut 8’s site.
The project would bring “a new chapter into the region, the Coastal Bend area, on high-tech work,” Bowman said — employment that “brings in a whole other skill set and opportunities for people that live here and grew up and go to school here.”
“That’s why we’re so excited about it,” he said.
This article originally appeared on Corpus Christi Caller Times: A data center may be on its way to Nueces County
Reporting by Kirsten Crow, Corpus Christi Caller Times / Corpus Christi Caller Times
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