Upsides to the Winchester Data Center
To the editor:
There are strong reasons to embrace a data center and a Battery Energy Storage System (BESS) in Fayette County. Currently a data center is hypothesized for Precinct 1 just north of Winchester on FM 448. Let’s tackle the data center first and batteries another time.
According to Clearview, there are 1,379 data centers operating in the USA with an average size of 46 MW. There are 2,794 planned with an average size of 146 MW.
There is no data center proposal to examine at this time, but we can make a general analysis of the financial benefits to Fayette County and the La Grange Independent School District (LGISD).
The property taxes are huge. The particular site surmised is just north of Winchester with plenty of land for a large data center with space to spare. But let’s postulate a medium- sized 50 MW data center, and the numbers can be extrapolated upwards for a larger size as desired. It requires about 30 acres of land out of the 400+ acre site in question. The initial tax basis is about $500 million, with completion possible in 3 to 4 years if the design were to start today. The taxes for the first year:
• La Grange ISD: $4,018,000
• Fayette County: $2,059,000
• Total Year 1: $6,077,000
(Note: The cost range in Texas for design and construction is $450 to 600 million for a standard cloud enterprise data center of this size, but over $750 million for an AI Optimized High Density facility. A large data center is an investment greater than $1 Billion, which would more than double the numbers.)
The typical breakdown is 55% for Real Property (land & buildings) and 45% for Tangible Personal Property (machinery, servers, coolers, UPS, generators, switchgear, HVAC). Taxes are determined by our Fayette County Appraisal District in accordance with depreciation schedules, with 10% residual value maintained after full depreciation. The appraised value is brought back up periodically when the data center refreshes with new servers (less than every 5 years) and other hardware are replaced at end of life or due to obsolescence.
Over the first five years the total taxes collected are roughly:
• La Grange ISD: $17,300,000
• Fayette County: $8,900,000
• Total Years 1-5: $26,200,000
Such a data center might be at the level of investment and number of employees to be exempt from county sales tax for 20 years as controlled by the state, but the county 0.5% sales tax is collected after that.
And yes there are ways to get around the State of Texas Robin Hood recovery of school funds that might hit if LGISD tax collections go over the threshold. The best strategy to keep the money in that case is to vote in a school bond. This is because there are two categories of school district expenditures: (1) Maintenance & Operations (M&O); and (2) Interest & Sinking (I&S).
I&S is NOT subject to Robin Hood. A school district can issue bonds with voter approval and then let the “free” data center taxes pay them off without increasing taxes on households. Note the cruelty towards our schools if a data center is rejected.
Perhaps, if our schools were in the top tier in performance and capital investment, we could refuse a large tax windfall without shame. But this is not the case. In scores from the Texas Tribune Schools Explorer, LGISD ranks down the list at 761 out of 1,019 total districts in the state, 30th out of 50 districts in its region, 47th out of 53 districts in its peer group, and in spending 24th of 53 in its peer group. Also, 55% of LGISD students are economically disadvantaged and more jobs are a good idea.
If all the roads in Precinct 1 were paved instead of a high percentage of rough gravel roads, maybe we could justify turning down the county’s money. We could put down high-quality asphalt roads instead of chip seal and empty the recycling trailers more frequently to match the usage.
The Winchester location is an excellent location because it already has a natural gas processing facility, the Union Pacific mainline close to the west, it sits between a large LCRA substation and the Winchester Power Park, a 200 MW LCRA gas turbine electrical generating station, is to the south, and also south are tall communication towers. This area is a de facto industrial park.
Fayette County is a nice part of the earth, but it is not a National Park. A well-designed high-tech facility would improve the quality of life in, particularly for our children, without imposing a significant burden on county residents. (As well as enabling nice field trips for budding high-tech software and hardware engineers and technicians.)
Noise and water are the two main objections heard. Modern data centers with closed loop cooling are designed to use little to no water because they operate at high temperatures. The current Nvidia product lines, the Blackwell GB200 for example, operates with direct primary loop water inlet temperatures up to 45°C (113°F) allowing outdoor dry coolers to reject heat to the atmosphere without mechanical chillers or evaporative cooling towers. (A backup atomizer to spray micro droplets of water that instantaneously evaporate into the inlet of the dry coolers is insurance to protect against extreme hot weather. Such atomizers reduce the inlet air temperature more than 20°F and are used only when the outdoor air temperatures reaches maybe 103°F to knock down just the peak heat.)
Nvidia specifies a cooling fluid of 75% water and 25% propylene glycol for its anti-freeze characteristics. Propylene glycol is non-toxic and used in other applications such as food products, food plant refrigeration systems, cosmetics and medicines. Examples of specific products containing it are Excedrin Migraine Tablets, Betty Crocker and Duncan Hines cake mixes, McDonald’s Big Mac Sauce, and soft drinks (incorporated in the “flavors” ingredient without spelling it out in particular). It breaks down in less than a week if leaked into surface water or soil.
A noise limit of 55 dBA at the property line for a residential zone was enacted in Loudoun County VA, which is in “data center alley” and the leader on this subject. This is equivalent to a quiet residential street. The north property line of the Winchester property adjoins a large LCRA electrical substation, meaning that low noise levels are not required in that direction. Due to the large 400+ acre size of the property, and the few residential houses nearby that are set way back from the property line, these large distances and intervening foliage provide substantial additional attenuation. (Noise levels may be higher infrequently during the day when performing monthly or quarterly tests for things such as emergency power equipment.)
In comparison, the horn on a Union Pacific locomotive on the tracks just across FM 448 from this property must sound 96 to 110 dBA at a distance of 100 feet from the locomotive by federal regulations. Sound pressure measurement in decibels is logarithmic and used because the response of the human ear is also logarithmic. A typical rock band is 94 to 100 dBA at 30 feet away, a toilet flushing is 75 dBA, normal conversation is about 60 dBA and a whisper is 20 to 30 dBA. (Zero dBA is the onset of human hearing at a sound pressure of 20 micro-Pascals.)
If an opportunity should arise for a high-tech data center to improve our tax base for the LGISD and our county government, it would be foolish to turn it down.