Skybox wins rezoning approval in Hutto, Texas, but data-center power supply remains unclear.

Dallas-based Skybox Datacenters has secured rezoning for its 140-acre Project Sequel in Hutto, an Austin suburb, with plans to close on the property in February. The company is partnering with Prologis, the world's largest industrial landlord, to market the site as a build-to-suit industrial development. According to Chief Development Officer Haynes Strader, Skybox will pursue enough power for two data centers that would occupy approximately half the land, while keeping the option to develop data centers on the property in the future.

The project's path forward has been complicated by state policy. Over the summer, Governor Greg Abbott directed ERCOT to effectively freeze potential data center connections to the Texas grid. ERCOT, which supplies about 90 percent of Texas, had not finished reviewing its first batch of connection requests when the directive came. Under current rules, Skybox will not know how much power capacity it can secure until 2028, pushing approval of the data center portion to an uncertain timeline.

The freeze represents a significant shift in Texas's approach to data center development. While land, zoning, and tenant demand once guaranteed a project's viability, power allocation has become the critical constraint, with timelines now dictated by state regulators. For Skybox, the industrial partnership with Prologis has become the likelier near-term path for the site, with data center development contingent on resolution of the grid capacity question. This mirrors Skybox's earlier success in the region: its 150-acre PowerCampus Austin project, which leased its four planned buildings to tenants including Google, demonstrates the company's ability to develop the site even if the data center component is delayed.