Data centers are taking center stage in our public discourse and for good reason: they offer no long-term benefit to the communities they displace.
As local governments and economic development corporations weigh the tradeoffs between tax abatement and short-term job creation, we should be skeptical of any deals that occur without community input.
Residents in Hood County, Texas, have learned the hard way the type of impact data centers can have. The roughly 60,000 computers running day and night in MARA Holdings’ data center rely on a mix of liquid cooling and fan cooling to remain efficient, leading not only to water strain for the county but also noise pollution. For Hood County residents, this round-the-clock operation means having the noise equivalent of a kitchen blender on at all times.
County and city officials in the Rio Grande Valley have already begun entertaining data center proposals, and it's no accident. More than ten years ago, Texas legislators approved House Bill 1223 (83R), a juicy package that gave sizable tax breaks for data center projects. At its smallest, this bill created tax breaks in the amount of $5 million. Now, in 2026, this tax loss will amount to $1.6 billion in lost revenue for the state. Unfortunately, these proposals aren’t stopping. ERCOT, which manages Texas’s electric grid, has received more than 500 large project proposals in the last two years, 90% of which are from data centers. If all these projects are approved, we, Texas, would be on the hook for providing roughly one-third of all power generation in America.
The Rio Grande Valley must ask whether data centers are worth it. As of now, there are at least three data centers operating locally, two in McAllen and one in Harlingen. Data centers like the one currently under construction in Willacy County, Kati 1, are marketed by the Soluna Computing company as quiet by design. Interestingly, the computers in this facility will also be cooled by mechanical fans, just like those operated in Hood County. The computers in Willacy, as part of Kati 1, will be mining Bitcoin.
Noise pollution, water usage (in an already water-starved region), energy demand, lost tax revenue, and abysmally low permanent-job creation seem significant compared to the poor returns that come with a data center. The false promises of job creation last maybe a year or two, mostly in the form of construction, but it takes very few people to keep a data center running afterward. What little tax revenue is dangled in front of us is also questionable, given the sizable tax abatements these companies are asking for. Unsurprisingly, there seems to be concern from local leaders that by refusing data centers, we are in essence refusing to be on the forefront of AI and Digital Mining, forever locking ourselves out of this profitable enterprise. In this vein of thinking, I wonder whether the workers mining diamonds in the Democratic Republic of the Congo are also considered to be at the forefront of the mineral trade. To be clear, the bitcoin mined in Willacy is not owned by Willacy, and any data services or technology offered by these data centers is not made available to our communities by the mere fact that they are close by. Data centers are lucrative, sure, but for whom?
Those negotiating directly with data center companies must do right by their communities and ensure that no agreements are made without real input or consent from the people who live here. RGV municipalities give local Economic Development Corporations (EDCs) ample discretion in their backend negotiations with data center companies. Because of this, many elected officials are kept in the dark until proposals materialize, and the public, even more so, is left not knowing what deals are being made with these companies. Residents must push our EDCs to have as transparent a process as possible in the consideration of any data center projects. Impact studies must be required, publicized, and scrutinized. Water consumption, land acquisition, noise pollution, economic extraction, and waste creation all must be considered, and every opportunity should be realized so that RGV communities can decide what future they want to inherit. The Valley is not a dumping ground for digital waste.
Work is already being done to mitigate the consequences of a data center-first economy. The RGV Broadband coalition, through public workshops, has informed residents about the benefits and costs of a data center. They’ve also assigned “homework” for workshop attendees to help craft what they call Community Benefit Agreements (CBAs). These agreements are designed by community members and list specific requirements that can help make data centers more beneficial for locals. Ideas like offshoot funding for data-related projects (such as fiber optic cable in residential areas) and profit-sharing are just some of the things that could be potentially added to a CBA, all of which would be required if the EDCs and local governments are pressured to, in order for the data center company to actually set up shop. As it stands, these companies have much more to gain from us than we from them. Tax abatements at this stage of the negotiations are laughable, to say the least.
A special thank you to the Texas Tribune, Houston Public Media, The Dallas Morning News, and The Harvard Gazette for their reporting on Data Centers, much of which was used to inform this op-ed.
Editor’s Note: The above guest column was penned by Michael Mireles, director of civic engagement for La Unión del Pueblo Entero. Son of migrant farm workers and raised in Alton, Texas, Mireles manages issue-based campaigns in the Rio Grande Valley. The coumn appears in the Rio Grande Guardian with the permission of the author.
