Lacy Lakeview’s city council on Tuesday is set to approve a preliminary agreement with Infrakey to build a $10 billion data center complex that company officials say could generate $50 million a year for the small town.
That plan depends on Lacy Lakeview annexing the 520-acre site nearly 2 miles north of the city – a power that the city does not yet have but could gain through a new state law.
At its 6 p.m. meeting the council will consider approving a nonbinding memorandum of understanding in which Lacy Lakeview, population 7,300, would annex the property and provide water and sewer to the site. Infrakey representatives will be present at the council meeting at Lacy Lakeview City Hall, 501 E. Craven Ave.
“We’re being asked to annex them and bring in quite a substantial increase in our tax base,” Lacy Lakeview Mayor Charles Wilson told The Waco Bridge on Wednesday. “And I don’t know how the city of Lacy Lakeview says no to that. … It’s municipal taxation that covers streets, water, sewer, etc.
McLennan County officials are also involved in negotiations on the site, but the county has not yet committed to incentives.
But a growing chorus of area residents is urging local governments to say no to data centers.
Since The Waco Bridge first reported the news of the project on Nov. 21, an online petition opposing Infrakey’s project has gathered more than 1,500 signatures.
Opponents plan to gather at 6 p.m. Sunday, at the Ross Volunteer Fire Department, 1557 Ross Road, for an information and strategy session.
Opponents have also organized through Instagram and Facebook accounts. Petition organizer Mary Beechner was among several opponents who brought their concerns to the Waco City Council’s meeting on Tuesday.
“I speak on behalf of thousands of local residents when I say this,” Beechner told the council. “We do not consent to the Infrakey data center consuming over 500 acres of land to build their water guzzling, air and sound polluting, nature destroying and community offending AI data collection center.”
Annexation into Lacy Lakeview’s city limits would allow the city to gather taxes on the property, provide tax abatements, and finance road and infrastructure works sought by the company in return for its investment.
In exchange, tax revenue from Infrakey’s data campus could be spent on urgent needs, Mayor Wilson said.
Annexing the land would involve several steps. The property belongs in Waco’s extraterritorial jurisdiction – the zone outside city limits where cities historically have had the right to annex and approve subdivisions. Waco’s ETJ generally extends 5 miles from the city limits.
In the past, Lacy Lakeview would have had to negotiate an ETJ swap with Waco in order to annex the site, effectively giving Waco a veto.
But Senate Bill 2038, passed by the Texas Legislature in 2023, gives landowners in a city’s ETJ a way to remove themselves from the zone. Lacy Lakeview officials expect Infrakey to do just that, clearing the way for their city to annex the site without needing Waco’s permission.
In a statement Thursday to The Waco Bridge, the city of Waco said its officials have had no discussions about the project with Lacy Lakeview or Infrakey and was “not in a position to comment on the specifics of the plans being considered.”
The statement noted that the property is not only within Waco’s ETJ but within its state-mandated water service area, called a “Certificate of Convenience and Necessity.”
“Based on the information reported publicly, recent changes to State law regarding removal from a municipality’s ETJ may be relevant, as may other statutes governing CCNs and municipal annexation,” the statement reads. “The City will be able to provide additional clarity once we have had the opportunity to review the proposed project in detail and engage with the parties involved.”
Wilson said annexation is the best option for residents of Lacy Lakeview.
“They could just stay outside of a city, which to me, is the worst possible outcome of all, because then there’s no municipal taxation on all of that tax base,” Wilson said.
On a Thursday call with the Bridge, Infrakey spokesman Sujeeth Draksharam said he understood concerns about the project and promised to answer neighbors’ questions at a series of public hearings in the future.
“They’ve been residents there for a long time,” he said, acknowledging concerns over noise pollution. “(You can’t) come here and say, ‘You know what? I know better, I want to blow my horn right there. That’s not how this is supposed to be.”
Draksharam argued that the Lacy Lakeview annexation and partnership would have the lowest impact on local resources of all options
A city-county collaboration would make it possible for Infrakey to leverage the advanced water recycling system it intends to install within the campus, he said.
Without annexation, “you can go and drill wells and try to make a mess out of the entire area, but here you have an option of reusing the water, which I think, in our view, differentiate us with the rest of the world right there, because our primary (water) source” would be recycled, Draksharam said.
