Skybox Data Center May Be San Angelo’s Future

SAN ANGELO, TEXAS — According to City and Chamber of Commerce officials, the proposed data center at the old city farm on Hwy 67 will put San Angelo on the leading edge of the economy of the future.

But many citizens are wary and suspicious — and not without reason.

The devil is always in the details; so, The Concho Observer started digging into the details to find answers to the public’s questions. We met with key figures involved directly in the deal, and asked them questions.

Meet Skybox Data Centers.

The company looking at buying 374 acres of City property at a reported price of $50,000-per-acre to build this project is Skybox Data Centers.

Skybox is a 15-year-old, privately held company that builds and operates “hyperscaler” data centers nationwide. It currently has data centers in Austin, Dallas, Houston, Chicago, Northern Virginia, and Santa Clara, California.

Skybox is led by co-founder and CEO Robert Morris, a graduate of the Texas A&M Mays School of business, who was announced as a finalist for the southwest “Entrepreneur of the Year” in May.

What Are Hyperscaler Data Centers?

The proposed data center has nothing to do with crypto-mining or artificial intelligence.

But what exactly is a hyperscaler data center?

Rachel Warren in her piece in The Motley Fool, “Hyperscalers: What They Are And How They Work,” describes them this way.

A hyperscaler is a large-scale cloud service provider that offers vast computing, storage, and networking resources through a distributed infrastructure of interconnected servers and software.

Hyperscalers operate at a scale far beyond traditional data centers, with multiple data centers globally and thousands of servers, offering highly reliable and widely available services. Essentially, these entities provide the robust infrastructure for massive applications and services, acting as the backbone of modern cloud computing.

You can watch a video of Skybox CEO Robert Morris discussing hyperscaler data centers here.

The proposed center will consist of six four story-buildings of 248,000 square-feet each. Inside, the infrastructure consists of rows-upon-rows of server racks that serve the cloud. Large scale data users lease space on these racks to host their servers.

Customers would include companies like Google, Amazon and other large companies that rely on and provide all the servers that make up “the cloud.”

(When I pay my .99 cents each month for extra iCloud storage for my iPhone, that is where my money is going. All my photos, music and files are stored in a hyperscaler server somewhere, just like the one they may build here in San Angelo.)

The proposed data center will not be used for crypto-mining or AI, both of which present problems with more noise, water use, cooling and electrical use than modern hyperscaler data centers.

Where Will It Be Located?

Officials said the proposed site is to the Northeast of the City, north of the Tom Green County Detention Center at the intersection of U.S. Highway 67 and City Farm Road. It will be situated on 348 acres of property Skybox will purchase from the city at $50,000 per acre–total $17.4 Million.

When will this happen?

The project is still going through the due-diligence phase for both Skybox and the City.

The City recently annexed the property into the city limits, so the location is part of a larger area now incuded in the city, and in the process of being zoned for light commercial.

The Planning Commission has approved that zoning change, and it is set to be considered by the City Council for its second reading at the Jan.13, 2026, meeting.

Assuming everything falls into place, the earliest the sale of the land to Skybox can be closed is probably sometime in February of 2026.

Assistant City Manager Michael Dane said he would not be surprised if the deadline to close under the agreement with Skybox does not have to be extended.

Part of the reason for a potential delay is that Skybox is in the process of securing commitments from customers who would lease the racks in the facility.

Without those commitments in hand, the center will not be built.

Once all the due diligence is completed, and they close on the purchase of the property, the construction would take up to three years. The center is not just one building but a campus and will be constructed and brought online in phases.

How much water will it use?

It’s not as much as you might think.

Cooling technology for data centers has vastly improved over the evaporative chiller systems of the first-generation data centers.

This proposed center would be cooled by a closed-loop chiller system that uses a combination of water and propylene glycol.

That sound similar to what your automobile cooling system uses, but ethylene glycol is chosen because it is a safe and non-toxic alternative, making it acceptable for use in cosmetic, food and pharmaceutical chiller applications, for instance.

The Closed Loop.

Within each of the six buildings, a separate closed-loop chiller system will be charged up with an initial supply of water, and then shut-in, where the fluid will recirculate indefinitely

According to developers, the fluid continues to circulate in the system for around five or six years before the system has to be flushed and recharged as part of regular maintenance.

Each system will require 1.5 million gallons of water to charge, for a grand total of about 9-million gallons, but the construction will be staggered in phases and will not need to be charged all at once.

To put this into perspective, San Angelo Water Department officials report an intake of around 12 -13 million-gallons per day during the winter months, noting that the 1.5-million gallons is around 12.5 percent of the city’s average-daily-water-use per system charge.

The developers said the system can be charged using regular municipal water or wastewater, and whether it would be charged with wastewater depends on testing criteria and the time of year during which the chillers would be charged.

City officials said water will be sold to Skybox at the regular rate all other commercial businesses pay.

Closed loop systems can lose water during operation from leaks or other causes. This may require small makeup amounts of water to keep the system functioning. But if the system’s seal is tight and maintained properly, in theory it would not lose water during ordinary operation.

Why San Angelo?

City and Chamber officials said they did not solicit Skybox to build a data center in San Angelo.

San Angelo was identified by Skybox as a potential site before it ever approached the Chamber’s Economic Development Team.

Why is San Angelo attractive as a data center?

The answer is available land close to AEP’s Red Creek Substation. The Red Creek Substation can serve 345 Kilo Volts of power. Most the substations current use is for pass through transmission of electricity generated in West Texas sent to Austin and Houston. The actual use of electricity by San Angelo from this substation is minor as San Angelo is served by two other substations in addition to Red Creek.

Currently San Angelo uses around 10 percent of the Red Creek Substation’s capacity.

In other words, Red Creek is an underused substation that has much more carrying capacity.

The location of available land just a short distance away from the substation makes San Angelo very attractive for data center developers.

In fact, it is a surprise to observers in the industry that a data center has not already been built here.

The wind and solar generation facilities located all over the area also make it attractive.

Chamber and City officials report that adding the data center on the Red Creek Substation will not negatively impact the city’s electricity availability. The facilities will also have back up electrical capacity with diesel generators in the event of a major outage. Restoring power to the data center would be a lower priority in the event of an outage caused by a major winter storm, tornado or other extreme weather events.

Economic Impact.

Up to this point Skybox has not asked for any sort of financial incentive from the City.

While it is possible they may, the reason for this project coming to San Angelo is not based on financial incentives. San Angelo is a prime location to build a data center and that is what makes it attractive to developers.

Once the center is fully operational, the developer estimates it will employ around 100 people, most of those being techs to operate and maintain the facility around the clock. The salary range for these positions is projected to be $84,000, up to $126,000 per year.

When complete, the center would add around $7 billion (with a B) of value to the City’s property tax roll. To put that into perspective, the current value in the entire city is around $7.9 Billion according to City Finance Director Tina Dierschke.

So, the project has the potential to double taxable property values in the City. One of the reasons San Angelo property taxes are so high is the low value of industrial and commercial property.

Finance Director Tina Dierschke said that in San Angelo, 70 percent of property taxes comes from residential property, and 30 percent from commercial. Other cities have a higher percentage of property taxes being paid by commercial properties than does San Angelo.

The current estimate of the economic impact of the Skybox Data Center is $27 Million per year. Franchise fees related to the electrical use of the facility has the potential to be even higher, according to Michael Dane.

The Concho Observer will continue following this story as more details become available.