Data Centers

Winstead actively represents clients in the development and operation of various types of data centers, along with the necessary on- and off-site power infrastructure, including electrical transmission and substation systems, gas pipelines, on-site generation systems, and solar and battery systems.

Data centers are essential for a rapidly growing number of companies seeking to harness their capabilities in support of their business goals. Data center site selection is often analogized to a healthy human body: real estate is the skeleton, energy/electricity is the muscle, water is the blood, state/local incentives are the fat, and the absence/mitigation of natural hazards is the prevention of disease.

Winstead’s diverse team of skilled attorneys are experienced and uniquely qualified to guide our clients through all aspects of data center site selection, acquisition, development, financing, operation, leasing, joint venture investment and sale of data centers and bitcoin mining operations.

Our Expertise

Real Estate

We advise on site selection, land acquisition, planning, financing, construction, development, leasing and disposition. Among other things, our services include fee simple acquisitions, long-term ground leases, temporary and permanent entitlements to ensure power availability, and assessing potential operational liabilities.

Land Use/Zoning

Our land use experts advise on zoning classification for data centers, entitlements, platting and subdivision matters, local government incentives, and negotiation of critical infrastructure agreements including impact fees, roadway, water and sanitary sewer development agreement.

Water Law

Our attorneys have significant experience and expertise in securing water supply through municipal utility contracts, water rights permits or purchase contracts, and groundwater production, and regularly accesses a deep network of water engineers and technical experts to evaluate regulatory needs.

Environmental Law

Our team includes environmental transactional attorneys and regulatory permitting expertise to assist in all facets of data center development and operations. We advise on environmental due diligence, water and waste compliance, and permitting strategies, including air permits for generator use to effectively manage environmental risks throughout the project lifecycle.

Tax

Winstead led the advocacy effort to successfully pass into law House Bill 1223 (effective September 1, 2013), establishing for large qualifying data center projects an exemption from Texas sales and use tax.  Our attorneys advise data center clients in qualifying for the exemption, as well as evaluating and obtaining state and local incentives including property tax abatements.

Construction

Winstead construction attorneys have extensive experience drafting and negotiating contracts for use in the construction process. From design/engineering/consulting agreements to construction contracts to close-out documentation, Winstead understands the importance of contractually defining rights, responsibilities, and expectations to reduce risk throughout any project. The substantial experience of Winstead’s Construction Practice assists public and private owners, developers and large contractors to reduce project risk in sports, transportation, airport, hospital, industrial and multifamily projects. Its transactional concentration is complimented with a well-seasoned group of construction litigators whose knowledge and experience are highly regarded for producing positive outcomes for Winstead clients when arbitration or litigation is necessary.

Energy/Electricity

Winstead utility regulatory attorneys advise on mission-critical matters specific to the deregulated Texas electricity market and ERCOT. Our team features expertise with the Public Utility Commission of Texas and handles the negotiation of power purchase agreements, facilities extension and interconnection agreements, “behind the meter” power arrangements, regulations around power generating facilities and Texas’ demand response programs.

Leasing & Asset Management

Winstead boasts one of the most sophisticated commercial leasing teams in the country.  Our commercial real estate attorneys have worked on some of the largest and most prominent data center developments in Texas, including multiple projects structured as ground leases with enterprise data center “triple net” subleases.  Winstead attorneys also regularly represent both landowners and operators on ground leases for bitcoin mining sites. The depth and breadth of our group allows us to draw upon our experience whether representing land owners, developers, investors, or operators.   

Data Privacy & Security

Our team includes top data privacy and cybersecurity lawyers who handle sensitive security issues to protect valuable information assets, as well as expertise on hardware purchase and various user agreements. Drawing on our in-depth market knowledge enables us to efficiently negotiate data center development and operation agreements, while providing up-to-date guidance on industry-specific terms and conditions.

Risk Mitigation

The depth of our team expertise allows us to provide solutions to the unique issues that may cause data center downtime, including conflicts between the mineral estate and surface development in Texas, noise nuisance, earthquake probability, wind/hailstorm threats, water rights and many other factors that must be considered in the data center site selection process. 

A Strong Record of Success

Multinational technology companies, developers, users and investors trust Winstead to guide them through all aspects of data center site selection, development, ownership and operation.