Cameron County is negotiating a $20M Fluidstack data center donation after Harlingen waffles on the same offer

The $20 million donation offered to Harlingen leaders by a data center company with ties to New York City may be redirected to Cameron County as a deal between the county and Fluidstack is underway. 

Cameron County Judge Eddie Treviño Jr. confirmed to the Rio Grande Valley Business Journal on Friday that the county is actively negotiating with Fluidstack for a community benefits agreement after administrative approval of the company’s permit was solidified this week. 

“We are in discussions with Fluidstack; there’s been no agreement on a community benefits agreement, but we have had some initial preliminary discussion with them,” Treviño Jr. said on Friday. 

In Texas, most counties have no zoning authority for most properties. An obscure law in Cameron County makes select parcels on unincorporated South Padre Island subject to the zoning board, but it doesn’t apply county-wide. 

Officials said the Fluidstack permit wasn’t voted on at a regular or special commissioners court meeting; it was handled internally, as usual. 

“This was done administratively. When an applicant submits an application for a site permit, whether it be for a home or a residential or commercial building, our permitting and engineering department reviews the application to make sure it meets all of their requirements,” Treviño Jr.

The Fluidstack data center, a $4 billion project spanning more than 1,000 acres in the county between Harlingen and Rio Hondo, just outside Valley International Airport, submitted a stormwater drainage application to the city of Harlingen. 

On a typical day, that process in Harlingen would have been purely administrative too. But Harlingen city commissioners changed the law after the data center application was submitted, requiring commission approval for such stormwater applications. 

That’s how Harlingen commissioners were able to delay the data center application vote and table the issue – asking for a town hall first – while the majority of commissioners indicated that they would still vote against such a proposal. 

“The city engineer of Harlingen indicated that he had no questions or concerns about the application and the request to tie [the data center] into the Harlingen drainage system. But for whatever reason, the city did not allow the engineer who had the administrative responsibility to approve let him act on the application. I think that’s going to create some major issues for the city of Harlingen down the road in regards to development that’s going to make it much harder and probably take longer,” he said. “I think Fluidstack utilized restraint because the city of Harlingen changed the rules mid-stream, and you’re not allowed to do that in Texas; the application was pending under the applicable statute and requirements.” 

Treviño Jr. added that many organizations, including municipal entities and some water providers, cannot deny legitimate businesses access to site permits or water connection requests under state law. 

Both Harlingen and Brownsville city commissions have passed data center moratoriums, a temporary measure to allow further review of the industry. 

Treviño Jr. felt confident the data center would invest without tax incentives or property tax abatements, using a closed-loop water system that would not significantly draw down the daily water supply and would pay its own energy bills and infrastructure such as substations and transmission lines. 

“Fluidstack looked at other options [for drainage and site improvements] and got permission from the Department of Transportation to drain into their system,” he said. “We want to protect our [natural] resources, but at the same time we need to be mindful that economic development along with investment in our education is what’s going to benefit us in the long term, and we have to think like that.” 

Treviño Jr., who has served as county judge for the past decade, said his advice to public officials who are facing these massive economic development deals is to “continue to have a positive frame of mind working with these investment and development companies that are looking to invest and build in the Rio Grande Valley.” 

And one way to address the water situation is the proposed saltwater desalination plant on South Padre Island, for example, he said. 

“Whoever wants to build still has to meet the requirements that our county engineer has with regard to that particular building, making sure that there’s drainage, that everything meets their guidelines. Just because I may not want a particular industry if they meet the requirements under the application of the site permit, we’re bound to approve that,” he said. “Our hands are tied.” 

As to how Cameron County may spend $20 million if that deal is approved? 

“We’ve got a lot of good ideas. We’ve got a lot of projects that need the resources in order to get them done,” he said.