Westlake approves agreement, clearing way for controversial North Texas data center

A controversial data center project in Westlake will move forward after the Town Council approved a development agreement Thursday, following a recent settlement reached by the developer, the city of Keller and nearby homeowners.

The approval clears the way for construction to begin near U.S. Highway 377 and Westport Parkway, following months of delays, legal challenges, and opposition from some residents.

According to Westlake officials, the data center will cover nearly 88 acres and is expected to generate about $5 million annually for the town during its first 10 years.

Thursday's presentation on the data center is available here.

Keller homeowners' concerns lead to additional protections

Earlier this month, Keller city leaders approved a settlement with Westlake and developer Circle T Owner LP. The agreement includes noise restrictions, environmental safeguards, and other protections for nearby residents.

The nearly $2 million settlement provides $1.5 million for noise monitoring and other programs, $300,000 for Keller Fire Rescue, and additional money to cover legal and consulting expenses.

Homeowners in Keller's Marshall Ridge neighborhood had opposed the project, saying they were blindsided by plans to build 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.

The homeowners also agreed to settle their lawsuit.

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

Under the settlement, Keller gains contractual rights to enforce certain noise, screening, and operational requirements at the site, even though the property is outside Keller city limits.

According to the City of Keller, 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 have 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 related drainage improvements.
• Legal expenses: A $76,000 payment toward Keller's attorney fees and expert consultant costs.

Data centers become a political issue in Texas

The Westlake dispute comes amid growing opposition to artificial intelligence data centers across Texas and other states, with concerns about electricity costs, water consumption and the effects on surrounding communities becoming issues in the Nov. 3 midterm elections.

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

Texas leads the nation in data centers under construction. In September, Gov. Greg Abbott directed state regulators to halt environmental permits and other regulatory approvals for data center projects pending an audit of their potential impact on the state's electric grid.

The issue also became part of the Texas governor's race. Democrat Gina Hinojosa, who campaigned against the rapid expansion of data centers, defeated Abbott in the Nov. 3 election.

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.