Data Center Boom Takes Shape South of Dallas, With Lancaster, Red Oak and Wilmer at the Center

Dallas-Fort Worth may be on its way to anchoring the largest data center market in the country. A mapping project by NBC 5 Investigates, built on data from the tracking groups Cleanview and Datacenter Map, shows where facilities are operating, under construction or still in the planning pipeline across the region.

The maps reveal a heavy concentration in three communities south of downtown Dallas, stretching along Interstate 35 and then east toward Interstate 45. In Lancaster, Red Oak and Wilmer combined, the data shows 10 centers now operating and nearly four times that number on the way. Some are being built, while others are proposed sites or planned additions to existing campuses.

Red Oak has nine operating data centers and 14 more either planned or under construction. Lancaster has three under construction and 11 more in the pipeline. Wilmer has one center in place and 11 new ones planned.

Analysts say the draw is easy to explain. Power availability, major fiber connections and the momentum of an established market all play a role. "Everybody wants to be where everybody already is, right?" said John McWilliams, who studies data center development for Cushman & Wakefield. He said Dallas is leading a Texas market that is on track to overtake Virginia as the nation's biggest data center location, and that the Dallas market could nearly double in power consumption within three to five years based on projects already under construction. The pipeline of proposed projects is larger still, though not all of them are certain to be built. A recent study by McWilliams ranked Dallas as the top primary data center market in the world.

Haynes Strader, chief development officer at Dallas-based Skybox, said the region has long been central to fiber connectivity between the West Coast and the East Coast. He added that south Dallas sits at a major electric power crossroads between West Texas and North Texas, with excess capacity available for many years. Skybox is building a 100-acre campus in Lancaster, where the city council has welcomed data center construction. The company said it aims to build in industrial areas rather than near homes and that its facilities provide millions in tax revenue to cities like Lancaster. Strader expects the boom to continue for five to 10 years.

Some residents are uneasy. Red Oak resident Chris Villegas said he learned through social media that a data center was planned just beyond the fence line of his family's home, after moving there for a country lifestyle near the city. He said he is not against all data centers but does not think Red Oak needs more, especially close to homes. He and his wife helped start a local group calling for "no more data centers."

Neighbor Lacey Hammel worries that more development will make the land more valuable and let growth continue unchecked. She and Villegas fear years of construction traffic, noise, new electric lines and effects on home values. "A lot of our neighbors' farms, a lot of our neighbors' homes, they're going to be right in the sacrifice zone," Hammel said. NBC 5 Investigates contacted Compass Data Centers, the company planning to build near Villegas' home, but did not hear back.

Red Oak Mayor Mark Stanfill said in a statement that he understands no one wants development next to them, but argued the benefits outweigh the concerns. He wrote that residents have long asked for parks, road repairs and lower taxes, and that data centers are how the city gets there. In his view, a data center is a better deal for a city than a giant new neighborhood.

State policy could change the picture. Gov. Greg Abbott (R) recently paused all state permits for data centers until regulators finish an audit of the large projects seeking to connect to the state's electric grid, and the Texas Legislature is expected to consider new data center rules starting in January. Some industry analysts believe the debate will focus on managing growth rather than stopping it. "So much, so fast, is really what worries me because there's so much unknowns right now," Hammel said.