Council makes move to block future data centers
The Kerrville City Council unanimously approved extensive updates to its zoning code, making it nearly impossible to build data centers within city limits through layered development requirements rather than an outright ban. This move aims to avoid property rights litigation, a common issue as communities in Texas grapple with an influx of data center proposals. The article highlights a recent federal lawsuit filed by RCM Hill, LLC against Hill County after it enacted a yearlong moratorium on data center construction.
The Kerrville City Council has enacted sweeping updates to the city's zoning code, effectively preventing the construction of data centers and battery energy storage systems within city limits without explicitly banning them. Councilmember Jeff Harris explained that this strategy, outlined in Ordinance 2026-07, legally calculates that an outright ban could lead to property rights litigation, a growing concern across Texas.
The new regulations include a 500-foot prohibition zone around public parks, schools, hospitals, churches, and residential areas. Additionally, any developer would face a 300-foot setback from major roads, an 8-foot solid masonry wall requirement, and a mandatory water capacity analysis. Director of Planning and Development Drew Paxton confirmed that these overlapping restrictions would make development practically impossible in Kerrville.
The council's decision comes amidst rising legal tensions in Texas, as communities confront data center and battery storage proposals. The article cites the recent $100 million federal lawsuit filed by developer RCM Hill, LLC against Hill County and three of its officials. This lawsuit followed Hill County's 3-2 vote on May 12 to implement a yearlong moratorium on data center and power plant construction in unincorporated areas, responding to eight proposed developments. Hill County Judge Shane Brassell acknowledged the legal risks, stating he received lawsuit threats shortly after the vote.
Kerrville's approach, which imposes strict but not absolute development standards, aims to avoid regulatory taking claims, a legal theory that government restrictions can effectively strip property of economic value. The city hopes to maintain its authority by regulating rather than outright prohibiting land use, distinguishing its strategy from more direct bans that have faced legal challenges, such as the City of Dallas v. Trinity East Energy case.