Texas Residents Sue City Over Rezoning of 2,100 Acres for Data Center Project
April 15, 2026
A lawsuit filed by residents of Granbury, Texas, highlights the growing tensions between local communities and the rapid expansion of data center infrastructure. The case underscores critical questions about transparency in municipal planning as demand for computing power, driven by artificial intelligence and high-performance computing, fuels a land rush in power-rich regions.
The legal challenge was initiated after the Granbury City Council voted on April 7 to approve the rezoning of a 2,100-acre parcel of land, known as Knox Ranch, for a potential data center development. The rezoning request was backed by Bilateral Energy, a power infrastructure provider specializing in data centers and AI. The lawsuit alleges that the city's earlier annexation of this land in January was procedurally flawed, primarily for failing to properly disclose its connection to the potential data center, referred to internally as 'Project Patriot.'
Central to the plaintiffs' claim is an alleged violation of the Texas Open Meetings Act. The suit contends that city officials conducted a "walking quorum" by touring a Bilateral Energy data center facility in Dallas prior to the annexation vote while deliberately staggering their arrival times to avoid forming a public quorum. Shea Hopkins, Granbury's director of economic development, acknowledged that if all officials had visited simultaneously, "there would be a quorum," which would have required public notice and open proceedings. The lawsuit seeks to halt further action on the data center project, revoke the annexation, and award damages.
The City of Granbury has declined to comment, citing the ongoing litigation. The case unfolds in Hood County, a region southeast of the Dallas-Fort Worth metro area that is becoming a focal point for large-scale energy and digital infrastructure. The area's appeal is partly due to its proximity to power sources like the Comanche Peak nuclear plant. Other major projects in the county include a planned development by Sailfish Real Estate spanning over 2,000 acres with a potential power capacity of 5 gigawatts, a cryptocurrency mining operation run by Mara, and an off-grid gas project by Pacifico Energy aimed at supporting data centers.
The lawsuit represents a significant local pushback against the data center boom, reflecting a broader national trend where community concerns over transparency, land use, and environmental impact clash with economic development ambitions. This legal action follows Hood County's narrow vote against a moratorium on data centers just last February, indicating a deeply divided local stance on the industry's growth.
Source: datacenterdynamics
