Westlake data center bordering Keller neighborhood moves forward after months of litigation

The 88-acre data center project at the border of Keller and Westlake is moving forward after a monthslong legal battle between the two cities. 

Westlake Town Council members voted 5-1 Nov. 12 to approve a development agreement with PowerHouse Data Centers, the developer leading the Circle T project located off U.S. 377, within the town’s boundaries but only about 500 feet from the backyards of Keller residents. The deal was initially set for approval in August, but a temporary restraining order barred the council from moving forward. 

Council members also unanimously approved a settlement agreement between Westlake, the city of Keller, the data center developer and residents of the homes adjacent to the project site. The settlement, which Keller City Council members unanimously approved last week, set standards designed to protect the quality of life for Keller residents: noise limits, site screening requirements and $1.8 million to support monitoring the project. 

“I want to thank PowerHouse for being an outstanding partner throughout this process. Their team listened to the homeowners and to Keller’s leadership, stayed at the table and worked towards a resolution,” Westlake Mayor Kim Greaves said. “Westlake continues to lead in responsible data center development by listening and putting protections into an agreement the town can enforce.”

The Circle T data center project is expected to contribute about $5 million in annual tax revenue during its first 10 years of operation, followed by $7 million annually after that, according to town estimates. Westlake officials said the 14% increase in revenue to the town’s budget will support essential services, infrastructure improvements and long-term property tax stability. 

Council member Michael Yackira was the dissenting vote. He said he understood the data center would be a “financial boon” for Westlake, but after reflecting over the past three months, he could not in good conscience vote yes on the development agreement. 

“Data centers are going to be important. I just don’t think they’re important for our town,” Yackira said.

The former CEO of an electric company, Yackira said he worries that the booming data center industry will drive up electricity rates across Texas. Tri-County Electric Cooperative has exclusive rights to serve the town of Westlake, so residents don’t have the luxury of finding a cheaper provider, Yackira noted. 

The council member proposed that PowerHouse contribute dollars to a reserve fund that would cover the difference if Westlake residents’ electric rates increase. 

“I apologize,” said Jeff Parsons, an executive with PowerHouse who attended the meeting. “I’m not in a position where we could afford a fund like what you described. I have no idea what interplays in what the retail costs in the future.”

On the town’s website, Westlake officials maintain that the data center’s presence will not increase electric rates. The developer paid Oncor to build a 350-megawatt substation on the west side of the town that will power the data center. 

Last week, Greaves lauded PowerHouse as “the right development partner,” sharing online that the developer paid all costs associated with litigation over its project. 

The settlement gives Keller enforceable rights to monitor and address noise, screening and operational conditions. It establishes daytime and nighttime noise limits at residential property lines and requires an independent baseline noise study and quarterly noise monitoring for three years after the data center begins operating. 

The data center must be separated from Keller homes by a 10-foot landscaping berm, with the settlement requiring the replacement of trees that get damaged or die along the screening line. 

Of the settlement funds, $1.5 million is to support noise monitoring and evaluating environmental impact, while the other $300,000 goes toward Keller Fire-Rescue’s training, equipment, decontamination and other costs associated with the data center’s operation, according to a Keller news release. 

Under the development agreement approved Thursday, PowerHouse must pay Westlake $914,000 to fund renovations of the town’s pump station, adjacent to the project site, that manages water distribution.

The agreement mandates aesthetic standards for Circle T, including using stone materials on accessory buildings and screening walls that are to be used to hide mechanical equipment from public view. 

The project site is on privately owned Westlake land that has been zoned for commercial and industrial use since 1998, according to the town. The adjacent Keller neighborhood was also zoned for such use until 2006, when the city council changed the zoning to allow for residential properties. 

“While Keller’s zoning for their property changed, Westlake’s vision of the adjacent land within our town limits has not,” states a page on Westlake’s town website explaining the project. “An industrial or commercial project like a data center, a large distribution center, or something similar was always expected, hence why our zoning hasn’t changed in 28 years.” 

In early August, several Keller residents said they felt blindsided after learning about the data center project through social media when Westlake officials announced the project online July 29. The site’s proximity to Keller homes quickly became a point of contention, as Westlake officials promised the data center would be located at least 1,200 yards away from Westlake homes. 

With a median household income of $250,000, Westlake is ranked among Texas’ wealthiest cities. The town estimated its population at about 1,900 residents in 2023. 

The Westlake council planned to approve the development agreement with PowerHouse in August. A Fort Worth district judge blocked the project from moving forward, with a temporary restraining order requested by the Lakes at Marshall Ridge Homeowners Association, which represents the Keller neighborhood adjacent to the project site. 

The city of Keller quickly joined the HOA’s lawsuit, with officials vowing to pursue every legal option available to “protect” residents. 

“Keller’s first responsibility has been, and will always be, to protect our residents. Throughout this process, we have fiercely advocated for our residents — especially those living closest to the proposed data center site,” Keller Mayor Ross McMullin said in a statement last week sharing news of the settlement. 

Cecilia Lenzen is a government accountability reporter for the Fort Worth Report. Contact her at [email protected]. 

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