Subscribe to The Y’all — a weekly dispatch about the people, places and policies defining Texas, produced by Texas Tribune journalists living in communities across the state.

McALLEN — SpaceX is planning to build a $24 billion data center and power plant just outside of Brownsville on property that the city had just de-annexed earlier this year at the company’s request, circumventing Brownsville’s data center moratorium that went into effect last week.

On Monday, the city of Starbase, which later annexed land where the project will be built into their city limits, notified the public that SpaceX is building a $24 billion “gas-fired power plant and super-compute facility.”

The $24 billion investment is expected to cover the initial phases of the project which could include future expansions, according to the Monday notice which stated that the Starbase city commissioners are scheduled to hold a public hearing in December in which they will consider tax breaks for the project.

The 444.45 acres of land where the project will be located was the subject of local scrutiny over the summer, when SpaceX asked the city of Brownsville to de-annex that land. In exchange, the company offered to fund $220 million for city water and wastewater projects.

A SpaceX representative didn’t provide details as to why the company wanted the land, located near the Port of Brownsville out of Brownsville’s city limits, but the company pressured the city to approve the de-annexation quickly or else the $220 million would be off the table. The city agreed, but the move drew widespread condemnation from residents and environmental activists who believed the city was allowing SpaceX to further take over land in the area.

Soon after the city approved the deal, speculation circulated online that SpaceX planned to build a data center on the property and wished to circumvent a data center moratorium that was advancing within Brownsville.

That speculation appears to have been correct all along.

In response to the news, the South Texas Environmental Justice Network, announced a protest against the project, arguing that the new facilities would pollute the air, use up water and increase energy bills for residents.

Other residents responded positively, seeing the project as a source for more jobs.

“There’s a lot of people that need jobs in our community and SpaceX has contributed to those jobs,” said Janie Melendez, a Brownsville resident and school teacher.

She previously served on the Texas Republican Party’s executive committee but said her politics don’t influence her view on data centers and SpaceX.

“Since SpaceX moved in, my home has tripled in value,” she said. “But I’m one of those [people] that tries to find a balance in everything.”

SpaceX did not respond to questions regarding the project.

What the future holds for data centers in Texas

However, a majority of Texans oppose data center construction, which has received a wave of pushback across the state due to concerns over how much power and water they require to operate at a time when utility bills remain high and water scarcity fears mount. In response to public backlash, several communities have issued temporary moratoriums on data centers.

As criticisms of these facilities grew, Gov. Greg Abbott directed operators of the electric grid in August to pause requests for data center connections to the grid until the data centers could be audited. However, not all data centers rely on the state’s power grid and therefore could still move forward by supplying their own electricity.

The gas-fired power plant that SpaceX plans to build could provide power to its data center to avoid connecting to the state’s power grid.

Abbott also ordered the Texas Commission on Environmental Quality to stop issuing permits for data centers, though critics say that some permits have continued to advance through the permitting process.

Data center developers could face stronger headwinds under Governor-elect Gina Hinojosa, who said she would issue a ban on all data center approvals until state legislators can pass laws “to protect Texans,” she said in a video posted on X.

Brownsville approved its own 90-day moratorium which went into effect last week, temporarily hitting pause on data center applications within the city and its extraterritorial jurisdiction. Had the 444.45-acre tract of land remained within Brownsville’s city limits, the SpaceX project likely would have had to find a different location.

The city of Brownsville said it stood by its decision to de-annex the property, which was based on “information and circumstances presented at the time,” the city said in a statement. That included the property’s location, municipal service considerations and potential long-term benefits to Brownsville.

The city further noted that the land was privately owned and its sale to SpaceX was a transaction between private parties.

The $220 million that the city received for the de-annexation will fund critical water infrastructure which the city said would help ensure their water supply keeps up with their future growth.

“The City recognizes the concerns raised about data center development and takes those concerns seriously,” the city said. “It remains committed to evaluating those concerns and protecting water resources, evaluating infrastructure impacts and ensuring responsible growth that serves Brownsville’s long-term interests.”

Further, the city assured that any future de-annexation requests will be evaluated independently under state law and the city commission will take the circumstances and legal requirements into consideration before taking action.

“Residents should have confidence that their concerns about data center development, water resources, energy consumption and responsible growth are being taken seriously,” the city said. “Our responsibility is to ensure that Brownsville’s growth is intentional, that residents’ interests remain a priority, and that decisions involving our community’s future are made with transparency, accountability and careful consideration.”

Reporting in the Rio Grande Valley is supported in part by the Methodist Healthcare Ministries of South Texas, Inc.