Guadalupe County sued over data center agreements; plaintiffs allege judge's conflict of interest
The Data Center Action Coalition has sued Guadalupe County over alleged Texas Open Meetings Act violations concerning development and tax abatement agreements for two data centers, Palomino Alpha and Cloudburst. The lawsuit also claims a conflict of interest involving County Judge Kyle Kutscher, who has a financial stake in the Palomino Alpha project. An upcoming Crystal Clear Special Utility District meeting will vote on a water agreement for Palomino Alpha.
The Data Center Action Coalition (DCAC), represented by attorney Bobby Levinski of Save Our Springs Alliance, and local resident Abigail Lindsey, has filed a lawsuit against Guadalupe County, Texas. The suit alleges violations of the Texas Open Meetings Act by the Guadalupe County Commissioners Court, including County Judge Kyle Kutscher and commissioners Jacqueline Ott, Drew Engelke, Jim Wolverton, and Stephen Germann. The lawsuit seeks to invalidate development agreements and tax abatements granted to two proposed data center projects, Palomino Alpha and Cloudburst, arguing they were approved through unlawful actions and private negotiations.
Furthermore, the plaintiffs allege a significant conflict of interest involving County Judge Kyle Kutscher, who reportedly has a financial interest in the Palomino Alpha data center project and was involved in reviewing its water feasibility study. Kutscher previously spoke in favor of the project at a Crystal Clear Special Utility District (CCSUD) meeting as a "landowner that has a piece of property in this transaction," advocating for property rights and the project's tax revenue benefits for Navarro ISD. Public Information Act requests revealed email communications showing Kutscher's involvement in the project's water discussions despite his lack of professional expertise in such studies and his land sale contract with Palomino Alpha.
The lawsuit and ongoing opposition come as the Crystal Clear Special Utility District prepares to vote on a nonstandard water agreement for the Palomino Alpha data center at its August 27 meeting. The proposed agreement would allocate a minimum of 500,000 gallons of water per day, with potential scaling up to 2.3 million gallons daily. Residents and CCSUD board members expressed concerns about the environmental impact, water availability, and the potential for increased drought restrictions for existing customers, as the data center's cooling needs would be exempt from curtailment. Palomino Alpha's representative, Tom Dubel, stated they were assured of water availability and had met all district and state water laws.