Threat of Data Center Construction Looms Over Dog’s Head

Could a large-scale data center be built on Dog’s Head, even though city leaders have begun the process of banning data centers inside the city limits? Critics of the controversial 2,600-acre development project east of Downtown say it’s possible.

“There’s a loophole created by the Dog’s Head annexation and development agreement passed back in May,” Rich Heyman, one of several candidates running against incumbent Council Member Zo Qadri for the District 9 seat, told the Chronicle. “It locks the development into the regulations existing at the time of the agreement, which means that any new regulations or ban on data centers does not apply to Dog’s Head. So, while the Council thinks it’s banning data centers from Austin, it actually won’t be. We may get a ban and still get data centers in Dog’s Head.”

Heyman pointed us to language in Section 3.01, paragraph A, of the development agreement that City Council voted to approve with the Endeavor Real Estate Group, the company which owns Dog’s Head, on May 21. It states that the agreement between the city and Endeavor is “subject to all City Code, uncodified ordinances, manuals, and administrative rules in effect as of the Effective Date of this Agreement.” In other words, because the city has not yet completed the changes to its zoning rules that would prohibit a data center on Dog’s Head, such a use will remain permitted there in perpetuity, barring any amendments to the development agreement.  

A city spokesperson further clarified the matter. “Exhibit B of the development agreement defines the uses available to Dog’s Head,” the spokesperson wrote to the Chronicle, “including uses that currently allow for data centers.” 

The possibility that data centers could be built on Dog’s Head has been one of the main objections for those who oppose the project. Before the annexation agreement was approved at the Council meeting in May, Endeavor’s Andy Pastor and lobbyist Richard Suttle seemed to assure the public that no data center would be constructed on the property. At a July appearance before the city’s Environmental Commission, they walked that assurance back. Shortly thereafter, Endeavor announced that Amazon would be the first tenant on Dog’s Head. Amazon is far and away the largest creator and owner of data centers in the world, both in terms of the numbers of facilities created and gigawatts consumed. 

Pastor and Suttle’s refusal to rule out data centers on Dog’s Head has stuck in the minds of opponents, but it’s just one of their concerns. In August, a group called Friends of the Dog’s Head circulated a press release with six requests of the city and Endeavor. The group asks:

• That the next steps in the process – like the approval of a regulating plan for the development – be transparent and allow the public 45 days to offer input;
• That an independent environmental assessment of the development be completed before construction begins;
• That the changes to the roadways on Dog’s Head protect existing neighborhoods; 
• That Endeavor comply with Austin’s Better Builder Program to provide workers with living wages, safety training, and workers compensation; 
• That Endeavor provide dedicated public parkland, owned and managed by Austin Parks and Recreation, with river access and specific acreage commitments; and
• That Endeavor make binding commitments to create affordable and missing-middle housing in the development.

City Hall watchers had expected the next shoe on Dog’s Head to drop on Sept. 24, with the Council’s consideration of a regulating plan to set out detailed rules for the development. The spokesperson told us city staffers are currently drafting the regulating plan but that it won’t make it to Council on Sept. 24, because the city’s Environmental Commission and Planning Commission must consider it first, which they have yet to do. The spokesperson did not offer an estimate of when the regulating plan might appear. Suttle did not respond to requests for comment on the process.

The regulating plan’s delay is welcome news for opponents of the development agreement. They believe consideration of the plan should be delayed until after the November elections, when the balance of power at Council on Dog’s Head could shift. 

That balance is already tenuous. When the Council decided in July to create a Tax Increment Reinvestment Zone that will allow Endeavor to receive hundreds of millions of dollars in taxpayer reimbursement for the infrastructure it builds on Dog’s Head, three Council members voted no – Zo Qadri, Mike Siegel, and José Velásquez. A fourth Council member, Marc Duchen, said he had come ready to vote “No” and could see himself voting against future Dog’s Head measures, though he and the rest of the Council approved the TIRZ.

Duchen’s office told us they recently kayaked around Dog’s Head with members of the Southeast Colorado River Neighborhood Association and that they are holding regular meetings with the Environmental Commission’s working group. “We’re also facilitating meetings between the commission working group and Endeavor to make sure the developer clearly understands all the concerns and addresses them in concrete, meaningful ways,” Duchen said. “Dog’s Head is a legacy project that touches everything from local finances and tax burden to water quality and the environment, and we absolutely have to get it right.”

A fifth Council member, Vanessa Fuentes, was on maternity leave during the Council’s May and July votes but expressed doubts about the approval of the development agreement at a budget town hall last month. “The Council should have demanded more and expected more of that proposal,” Fuentes told the audience. She added that the city should “demand more of the developer” in the future.

More Council members with concerns about the development could be seated after the November election, particularly now that Paige Ellis has been disqualified from running for a third term in District 8. Both of the candidates running to replace her – Selena Xie and Jeffery Bowen – told us they opposed the development agreement and the TIRZ approval.

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