Keller reaches settlement over Westlake data center, secures protections for nearby residents, city says

Keller city leaders have approved a settlement regarding a proposed Westlake data center that includes nearly $1.9 million in payments and new protections for nearby residents, such as noise restrictions and environmental safeguards.

The agreement does not stop the project from being built.

The Keller City Council unanimously approved settlement terms with Circle T Owner LP and the town of Westlake. Keller's city manager finalized the agreement on the city's behalf Thursday, the city said.

The Westlake Town Council must still review and approve the settlement at an upcoming meeting.

"Keller's first responsibility has been, and will always be, to protect our residents," Keller Mayor Ross McMullin said in a news release. "Throughout this process, we have fiercely advocated for our residents - especially those living closest to the proposed data center site.

"For that reason, I'm pleased to announce that we have secured the ability to enforce meaningful protections for our residents that span even beyond our own City borders related to Westlake's data center. We will always stand up for Keller and our residents."

The full settlement terms have been made available on the city's website.

The agreement comes after homeowners in Keller's Marshall Ridge neighborhood said they were blindsided by plans for the massive data center just a few hundred feet from their properties.

Concerns about noise, environmental impacts, and the approval process led to lawsuits and a temporary court order blocking Westlake from advancing the project's development agreement. The order was later dissolved.

Residents have also agreed to settle their lawsuit.

"Per legal counsel, we have agreed to terminate our lawsuit regarding the proposed Circle T Data Center in Westlake," the Lakes at Marshall Ridge HOA Board said in an email Thursday night.   

"We appreciate the City of Keller and City Council for showing up when we asked. Not only did they listen to the concerns of our community, they took action on our behalf," said Rodney Eiland, Marshall Ridge HOA board member, in the release. "Knowing our city leaders were willing to roll up their sleeves and jump in and fight means a great deal."

"Residents living near the proposed data center site have had understandable concerns about how it could impact our neighborhoods," said Mark Mathews, Lakes of Marshall Ridge HOA member. "We're grateful to Mayor McMullin and the City Council for taking those concerns seriously and working to secure meaningful protections for our community."

The dispute also strained relations between Keller and Westlake, with Westlake voting against renewing its police services contract with Keller. The existing contract runs through October 2028.

What does the settlement include?

Under the agreement, Keller would gain contractual rights to enforce certain noise, screening, and operational requirements at the site, despite its location outside Keller city limits.

According to the city, the settlement includes:

• Noise restrictions: Daytime and nighttime noise limits at residential property lines, an independent baseline noise study, and quarterly monitoring for three years after operations begin.
• Landscaping: A 10-foot landscaping berm to help screen the facility from nearby neighborhoods. Trees that die or sustain significant damage affecting their screening function must be replaced.
• Community funding: A $1.5 million contribution for noise monitoring, environmental mitigation, and other municipal programs and services benefiting Keller residents.
• Fire protection: A $300,000 contribution toward Keller Fire Rescue training, equipment, decontamination and other emergency response costs associated with the project.
• Generator restrictions: Diesel-powered backup generators must incorporate EPA Tier 4 emissions controls, with generator testing limited to daytime hours.
• Grading and drainage: Circle T must provide the project's grading plan, including the proposed berm and associated drainage improvements.
• Legal expenses: A $76,000 payment toward Keller's attorney fees and expert consultant costs.

"The city also remains invested in continued statewide discussions and both Gov. Greg Abbott and Governor-elect Gina Hinojosa's directives regarding the demands data centers place on Texas's electric grid and water resources, including the importance of ensuring those facilities bear the costs associated with their operations," Keller city officials said in the news release.

Data centers become a political issue in Texas

The rapid expansion of AI data centers became a political challenge for Republicans ahead of the Nov. 3 midterm elections, amid growing opposition to electricity costs, water consumption, and the impact on nearby communities.

According to Cleanview Research, 75% of data centers under construction in the U.S. and 80% of planned projects are in predominantly Republican states.

Texas leads the nation in data centers under construction. Earlier this year, Abbott directed state agencies to pause the issuance of environmental permits and new grid connections for data center projects.

The issue also became part of the Texas governor's race, in which Democrat Gina Hinojosa defeated Abbott on Tuesday.
President Donald Trump has supported data center development, citing its importance to economic growth and national security. But public opposition has grown, with some Republican leaders, including Abbott, taking steps to restrict new projects.

CBS News Texas will provide updates as more information becomes available.