Key Takeaways
- • McGregor City Council approved the sale of approximately 500 acres to Galaxy Digital on June 24, 2026, enabling a $400 million private investment in data center infrastructure branded as Project Merlin.
- • Galaxy Digital plans to construct six to eight structures on the 500-acre industrial park site, positioning the facility as a significant expansion of the company's data center footprint in Texas.
- • The project will implement closed-loop cooling systems to mitigate water consumption, addressing taxpayer concerns about resource demands while allowing Galaxy to absorb infrastructure costs without municipal burden.
- • The facility is located in an undeveloped area northeast of the existing SpaceX facility in McGregor, leveraging proximity to established industrial infrastructure and power supply networks.
Summary
The McGregor City Council voted on June 24, 2026, to approve Galaxy Digital's acquisition of nearly 500 acres in the city's industrial park for development of Project Merlin, a data center investment valued at $400 million. The approval represents a significant commitment to expand computing infrastructure in central Texas and follows Galaxy's strategic positioning to capitalize on growing demand for enterprise and AI compute capacity.
Project Merlin calls for the construction of six to eight data center buildings across the 500-acre site, which occupies undeveloped land northeast of the SpaceX facility already operational in McGregor. Galaxy Digital is a global player in the data center development sector and has committed to financing the full costs of project implementation, eliminating municipal expenditure concerns for the city. The company's investment thesis reflects confidence in Texas's competitive advantages for data center operations, including power availability and industrial zoning compatibility.
Water and power consumption emerged as key taxpayer concerns during the city council deliberations. In response, Galaxy has committed to deploying closed-loop cooling systems designed to substantially reduce water usage relative to conventional data center operations. This engineering specification addresses operational sustainability while positioning the facility to minimize environmental impact on the local community. Galaxy's commitment to absorb all infrastructure costs further reduces financial risk exposure for McGregor residents.
The approval of Project Merlin reflects broader institutional investment trends toward distributed computing infrastructure and the migration of data center development to secondary markets in the South and Southwest United States, where land availability, power infrastructure, and regulatory environments favor large-scale facility construction.
Project Merlin calls for the construction of six to eight data center buildings across the 500-acre site, which occupies undeveloped land northeast of the SpaceX facility already operational in McGregor. Galaxy Digital is a global player in the data center development sector and has committed to financing the full costs of project implementation, eliminating municipal expenditure concerns for the city. The company's investment thesis reflects confidence in Texas's competitive advantages for data center operations, including power availability and industrial zoning compatibility.
Water and power consumption emerged as key taxpayer concerns during the city council deliberations. In response, Galaxy has committed to deploying closed-loop cooling systems designed to substantially reduce water usage relative to conventional data center operations. This engineering specification addresses operational sustainability while positioning the facility to minimize environmental impact on the local community. Galaxy's commitment to absorb all infrastructure costs further reduces financial risk exposure for McGregor residents.
The approval of Project Merlin reflects broader institutional investment trends toward distributed computing infrastructure and the migration of data center development to secondary markets in the South and Southwest United States, where land availability, power infrastructure, and regulatory environments favor large-scale facility construction.
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