June 2, 2026
Dear Mayor and Members of City Council,
In December 2025 I filed a public information request re: incentives and subsidies for the Skybox Data Center. It remains with the Texas Attorney General’s office.
The City has partnered with Skybox and its developer, Emergent Data Centers, since early 2025. This “exceptional municipal partnership built for speed”, Emergent’s promotional description, strangely has no documents associated with it from the city side.
Emergent CEO Chris Sumter informed the audience at the April public meeting that he has developed numerous data centers and sold them (making handsome profits). He named several private equity firms, which I will generally refer to as the Lords of Capital for the remainder of this letter. The Lords desire big profits and frequently need public subsidies for those to occur.
A data center power generation project outside of Pecos. Texas is “contingent upon several forms of economic development” to achieve the project’s “attractive returns.” It’s called a hurdle rate and the Lords don’t provide capital funding unless that is achieved.
The economic development agreement with Skybox is under negotiation. Skybox won’t go ahead with the project without ERCOT approval and a committed tenant. Financing for the project depends on those as well. That means three different hurdle rates need to be met, Skybox’s, the tenant’s and the Lords of Capital’s. Blue Owl financed a number of prior Skybox projects.
Time will reveal if there are local incentives or subsidies for Skybox on top of massive State tax breaks. Whoever is negotiating the 380 economic development agreement should have some idea as to the types and size of incentives offered by other Texas communities. The City researched data center zoning and shared that with citizens. It is yet to do so re: incentives.
The tenant gets a state sales tax break on the expensive hardware and many building systems it needs to operate their data center.
https://comptroller.texas.gov/taxes/data-centers/
The following items, if necessary and essential to the operation of a qualifying large data center project, are eligible for the exemption when purchased by a qualifying owner, operator or occupant:
•
electricity;*
•
an electrical system;
•
a cooling system;
• an emergency generator;
• hardware or a distributed mainframe computer or server;
• a data storage device;
• network connectivity equipment;
• a rack, cabinet and raised floor system;
• a peripheral component or system;
• software;
• a mechanical, electrical or plumbing system that is necessary to operate any tangible
personal property described above;
• any other item of equipment or system necessary to operate any tangible personal
property described above, including a fixture; and
• a component part of any tangible personal property described above.
Predatory TechGods will occupy this data center. Will it be Meta who allowed child sexual
predators seventeen strikes before banning them? Will it be Microsoft who plotted to make its AI more addictive?
High hurdle rate on profits, low propensity to protect children, tech offerings designed to
maximize addiction – these are the organizations you are inviting to set up in San Angelo proper.
Once the three hurdles are achieved, this project will flood forth as a fait accompli. It will come
down from Twin Mountain as a divine offering from the Lords of Capital and their TechGod
occupant. And in five years or less it will be sold or refinanced, because that is the real
business going on here, the buying and selling of companies.
It is not unheard of for the Lords of Capital to abandon their liege, to walk away, to not throw
good money after bad, to hand the keys back to creditors (who may or may not want them).
Thus, the City should be prepared to take possession of such a building.
It wouldn’t be the first time something with great promise did not pan out. Does anyone
remember MedHab, former Mayor Alvin New’s investment and future creator of some 400 San
Angelo jobs? That future never arrived.
Just as the city funds the closure of a landfill cell, it should consider setting aside money to
safely manage down the facility and its contents, should both the developer and TechGod
occupant walk away.
As an over twenty year resident of District #1, I currently reside in a community just outside
Tom Green County. It happens to be in the impact zone of the proposed Beacon Data Center in
Dove Creek. Our water and electricity will be directly impacted and air quality will depend on
the wind direction.
We have solar power with battery backup, installed after Winter Storm Uri when we went
without power for five days in bitter cold. None of the initial financial projections came true.
The State of Texas allowed electrical providers to add delivery charges and Reliant pays us half
of the amount they did just a year and half ago for power we send to the grid. There is no
competition for our solar/battery power. We take whatever the Texas electrical cartel gives, an
ever shrinking amount, while their fees to us soar.
I imagine the city will be treated likewise by Skybox/Emergent/Lords of Capital. It’s their hurdle
rate the State of Texas is subsidizing. The city may do likewise.
My prayer is the Lords of Capital lose
interest in funding these projects. No financing, no project.
Thank you for the opportunity to share these thoughts.
Note: I posted this on my other blog, StateoftheDivision, a local focused blog for San Angelo and the surrounding area in West Texas. This is evidence of the Lords of Capital, which includes private equity underwriters (PEU), discovering our area. They seek massive financial returns while citizens get burdens.
Update 6-14-26: Futurism reported:
John O’Farrell — former general partner at the mammoth investment firm Andreessen Horowitz — chastised his former colleagues in the tech industry for putting AI hype before the common good.
As the first outside general partner ever hired by Andreessen Horowitz in 2010, O’Farrell’s departure is significant, and his warning for his former colleagues is telling.
At the core of O’Farrell’s complaint is the fact that tech firms and their financial backers have invested unfathomable sums of money in an attempt to influence top US politicians who should, in a better system, be impartially regulating AI.
“I believe this attempted political infiltration by the AI industry will fail,” O’Farrell explained. “A backlash is building, and it will become fiercer when voters learn that a handful of billionaires are altogether spending nine figures, apparently in an effort to try to stop debates about regulation from further developing.”
Continuing, the former partner explained that he’d been approached by groups interested in exposing the tech industry’s effort to “buy political influence,” adding that he “may contribute my own money to these public awareness efforts.”
The Lords of Capital want your
retirement savings to fund data center expansion.
