Red Oak, Lancaster and Wilmer face surge in data center construction

A cluster of new data center projects is rising in the communities of Red Oak, Lancaster, and Wilmer, located just south of downtown Dallas. Mapping data reveals a concentration of construction along Interstate 35 and extending east toward Interstate 45. The development is part of a wider trend in the Dallas-Fort Worth region that industry experts say is driven by reliable power supplies and fiber connections.

In the Lancaster, Red Oak, and Wilmer area, ten data centers are currently operating. Almost four times that number are in various stages of planning or construction. In Red Oak alone, nine facilities are active, while 14 more are either under construction or in the planning phase. Lancaster has three centers under construction and 11 more in the pipeline. Wilmer has one existing center and 11 new ones planned.

John McWilliams, a data center development researcher at Cushman & Wakefield, noted that developers are drawn to these corridors because the market has already proven successful. "Everybody wants to be where everybody already is, right? The market has proven to be successful for data center developers and operators. And so that attracts more as well," McWilliams said. He added that Dallas is serving as the anchor for a Texas market that is on track to become the largest data center location in the nation, potentially overtaking Virginia.

McWilliams’ recent study ranked the Dallas area as the number one primary data center market globally. The report evaluated factors such as power availability, land access, and the current construction pipeline. He stated that the Dallas market is on pace to nearly double in size within three to five years based on projects currently under construction. The pipeline of future proposed projects is even larger, though not all are guaranteed to be built.

Haynes Strader, chief development officer at Skybox, a Dallas-based data center company, said the region’s position at a major electric power intersection between West Texas and North Texas is a key factor. "A lot of that power connectivity sits in south Dallas, and so there was a lot of excess capacity for many, many years in south Dallas," Strader said. Skybox is building a 100-acre campus in Lancaster and aims to situate its facilities in industrial areas rather than near residential homes.

Residents in Red Oak are adjusting to the rapid changes in their community. Chris Villegas, a Red Oak resident, said he learned about a proposed data center on social media only to find it located just across the fence line from his home. He moved to the area seeking a country lifestyle, noting that he previously saw tractors and farmland on the streets. "We saw tractors driving down the street, lots of just farmland," Villegas said. He and his wife have launched a local group calling for a pause in new data center construction.

Lacey Hammel, a neighbor of Villegas, expressed concern that increased construction would drive up land values and lead to unchecked growth. "I feel like if they add all of this, then the land is going to be even more valuable in that regard. So, the growth would seem to just continue unchecked," Hammel said. She and other residents are worried about construction traffic, noise, new electric lines, and the impact on their home values. They described their area as a potential "sacrifice zone" for the infrastructure boom.

Red Oak Mayor Mark Stanfill addressed the resident concerns in a statement. He acknowledged that no one wants development next to their homes but argued that the benefits outweigh the drawbacks. "People have been asking us for years to build parks, fix roads, lower taxes, and data centers are how we get there. A data center is actually a better deal for a city than a giant new neighborhood," Stanfill wrote. Compass Data Centers, the company planning the project near Villegas’ home, did not respond to requests for comment.

State regulators are currently reviewing the pace of this expansion. Texas Governor Greg Abbott has temporarily halted all state permits for data centers until regulators finish an audit of projects connecting to the state’s electric grid. The Texas Legislature is expected to consider new data center regulations starting in January. These political discussions may influence the speed and location of future construction in the region.