Hutto gets first taste of what big data center campus may bring to town

Nov 28, 2022
Justin Sayers/Austin Business Journal

Hutto is known for its hippo mascot and proximity to railroad tracks. But the burgeoning city northeast of Austin could soon be known for hosting some of the digital infrastructure used by corporate giants around the globe.

Skybox Datacenters LLC and Prologis Inc. are developing a 221-acre data center campus east of downtown Hutto and south of U.S. Route 79. Rob Morris, CEO of Dallas-based Skybox, discussed the project at a Nov. 17 Hutto City Council meeting — and showcased how the project fits into the growing high-tech corridor along U.S. 79.

Morris said the Central Texas campus will be the largest in his company's portfolio, which currently stretches across six markets, including a 560,000-square-foot complex under construction in Santa Clara, California, according to the Skybox website.

Without naming any of his company's data center tenants, he said such facilities typically attract some of the "world's best companies," from cloud computing giants to all manner of Fortune 500 businesses.

"We build these buildings to attract the world's best companies," Morris said. "The investment that is made by these companies can be many times even the investment we make in the buildings and the infrastructure. We work very hard with the cities that we partner with in order to attract those businesses into the facilities to make sure they are successful."

Data centers are sometimes criticized because they create fewer permanent jobs than something like a factory — perhaps one or two dozen.

But Morris said data centers are good for local economies because they bring both direct and indirect investment. The direct investment involves the construction of large industrial buildings, while the indirect investment includes high-paying jobs in emerging industries.

"This is a truly world-class campus in a world-class location for infrastructure, employment and access to some of the largest technology firms on the planet," Morris said.

Mike Arismendez, chair of the Hutto Economic Development Corp., said his organization has been working on the project for a year and leaders are glad they've finally inked deals. Earlier this month, both the EDC and Council approved roughly $150,000 in funding for infrastructure at the site. He said it fits into the EDC's goal of bringing in technology companies.

"With Skybox now coming in, that's going to provide us the opportunity to impact on the positive side for the city of Hutto, for the individuals we'll be able to have here," he said. "Not to mention the fact that it will be a big boon in the property tax base, which will be beneficial to everyone here, especially those residents."

Mega development for megasite

Austin Business Journal first reported in August that Skybox and San Francisco-based Prologis purchased the land for the data centers in what's known as Hutto's "megasite," a huge but undeveloped tract where big businesses could land.

An entity called Hutto Data Center Campus LLC on Aug. 9 purchased three tracts totaling 159 acres, according to county records. That entity is tied to a Denver address that is associated with Prologis (NYSE: PLD), a logistics-focused real estate investment trust. Prologis Logistics Services Inc. itself acquired an adjacent 62 acres on the same day.

While last week's discussion revealed few concrete details about the project, it was the first public acknowledgment of what could be coming to Hutto. The city — about 30 miles northeast of downtown Austin, with a population of around 31,000 — has taken steps to entice development along U.S. 79. Some site selection experts put this stretch of road among the most-desirable in the country. Just east of Hutto, Samsung is developing its $17 billion computer chip factory.

A lot of that allure is tied to the 450 acres owned by the Hutto Economic Development Corp. Combined with 1,000 acres that the city of Hutto has options to purchase, this area has commonly been referred to as a megasite, capable of handling huge commercial projects.

Albuquerque, New Mexico-based Titan Development Ltd. — which has an office in Austin and large industrial parks in Hutto and Georgetown that have attracted high-tech manufacturers — acquired 188 acres in the area and aims to break ground by the end of the year on what will be known as the Mega TechCenter. Initial plans call for upward of 2 million square feet of speculative high-tech industrial space.

Applied Materials Inc., a global supplier to the semiconductor industry, and an unnamed electric vehicle company operating under the codename “Project D12” have also reportedly looked at the megasite.

Completing the Texas Triangle

Skybox and Prologis have already teamed to start work on a $548 million data center on roughly 20 acres in nearby Pflugerville. The land in Hutto is roughly 10 times larger than what they own in Pflugerville, signifying potentially billions of dollars of investment there.

Skybox and Prologis in June broke ground on "Skybox Austin 1" in Pflugerville. The 141,000-square foot, 30-megawatt data center is slated to open in January at the northeast corner of New Meister and Meister lanes. It is expected to create 10 full-time primary jobs.

The Pflugerville Community Development Corp. provided Skybox a 10-year incentives agreement that will provide an expansion grant of up to $1.575 million, capped at $225,000 annually.

Morris told ABJ in April that he had been looking for a while to expand into the Austin area to complete the "Texas triangle" along with sites in Houston and Dallas.

Share this Article