Compass Red Oak data center, Red Oak, Texas

The Red Oak City Council voted 4-1 near midnight in May 2026 to rezone about 830 acres of farmland at the edge of Red Oak, in Ellis County, Texas, for a Compass Datacenters campus, over a packed and vocal council chamber. Compass already runs a data center campus in Red Oak; the newly approved site would be its second.

City staff said the buildings will use a closed-loop water-cooling system not connected to the city's utility lines, and the council's briefing said the project would bring $72 million in electric grid reinforcements. The council added lighting shields, decibel limits and a ban on cryptocurrency mining before approving the rezoning and a $2.82 million tax abatement spread over ten years, after its planning and zoning board had recommended denying the project weeks earlier.

"It allows for better funded city services without increasing taxes for residents", City Manager Todd Fuller said, arguing the zoning approach lets the city impose stricter controls than unincorporated county land would allow. In June, Compass withdrew a request for a tax abatement from Ellis County on its roughly 890-acre property, which founder Chris Crosby said came after the "noise" around the project; Compass has since given $15 million for a new Ellis County animal shelter and a $12.6 million building to Texas State Technical College. "There is no strings attached", said Ellis County Judge John Wray.

A Red Oak nonprofit, Say NO MORE Data Centers, has raised money through car shows and retained a lawyer for possible legal action; "we just know that they do not belong here, right next to established residences and farms", said Jazmin Villegas, a spokesperson for the group.

Gov. Greg Abbott ordered the Public Utility Commission of Texas and grid operator ERCOT on August 3, 2026 to audit every data center seeking to connect to the state's power grid before any new approvals proceed, a statewide review that reaches this project too. The Red Oak rezoning stands approved; any renewed county tax abatement request would go back to the Ellis County Commissioners Court.