Power & Energy · Regulatory (SB 6) · Site & Facility · Jurisdiction & Deal · 5 Core Principles
4
Due Diligence Categories
5
Core Principles
SB 6
Texas Regulatory Context
60MW
Phase 1 Target Capacity
01
Jurisdiction Reality
Who Can Say "Yes" — and Who Can't Say "No"
In Texas, authority to govern a data center splits sharply by jurisdiction. Where a parcel sits legally is now a core value and risk driver — not a footnote.
Cities — Real Authority
Hold zoning power: can restrict siting to industrial zones and control rezoning requests. Predictable, but with entitlement risk.
Counties — Near-Powerless
Almost no zoning authority. Moratorium attempts have triggered developer lawsuits seeking $100M+. Unincorporated land avoids zoning but inherits litigation and opposition risk.
The HBCU Advantage
An institution that already controls its campus land bypasses the city/county conflict entirely. The land is owned, the mission is public, and the community benefit story is built in.
Due Diligence
The 4-Category Site Qualification Checklist
Power & Energy
Regulatory (SB 6)
Site & Facility
Jurisdiction & Deal
02
Core Principles
5 Principles for Real Estate Professionals in AI Infrastructure Deals
Qualify on the Right Criteria
Utility access and connectivity are the primary value drivers for AI data center sites — not price or acreage alone. A site that clears the infrastructure threshold is worth significantly more than one that doesn't, regardless of asking price.
Site Control Is a Regulated Instrument
Under Texas SB 6, executed site control is the prerequisite for entering the ERCOT interconnection process. This makes site control agreements a regulated step in the development timeline — not just a deal formality.
Structure for Long-Term Institutional Value
Partnership structures that preserve institutional ownership and generate recurring income protect your client's long-term position. Structures that transfer ownership outright may sacrifice the upside the opportunity exists to capture.
Incentives Are Enforceable Commitments
In Texas, development incentives and reinvestment zone agreements are the primary tools for securing enforceable commitments from infrastructure operators. A deal without a structured incentive framework leaves institutional value on the table.
Valuation Caution
A site's data center premium is partly speculative until interconnection is confirmed. Tie value to demonstrated, executed milestones — not proximity assumptions. Clients who buy on proximity alone and miss the interconnection window will be disappointed.