Texas is in the middle of a data center gold rush. Billions of dollars in infrastructure are being planned, permitted and built across the state, and the legal complexity is just beginning. Data center development is not a single-practice matter. A project that starts as a land acquisition quickly involves water rights, construction contracts, power agreements, tax incentives and, increasingly, regulatory and legislative strategy.
Gray Reed's GRIDS Initiative brings each of those disciplines together under one coordinated team. GRIDS stands for Government Relations, Real Estate, Infrastructure, Development and Security (Cyber & Data), and reflects the full range of capabilities the initiative delivers. Our team brings together Gray Reed attorneys, the legislative and regulatory expertise of GRPR, and the cybersecurity and data privacy capabilities of Gray Reed Advisory.
Our Data Center Experience
- Represent landowners in joint venture and co-investment planning for data center development.
- Represent data center developer in negotiating equity funding by private equity sponsor to fund data center project development.
- Represent data center investors, developers and landowners in complex tax planning, special allocations of depreciation, and project exit planning.
- Secure local tax incentives for data center developer.
- Represent data center developer in complex payment dispute involving the general contractor constructing a large-scale data center.
- Negotiate construction contracts on behalf of subcontractors and suppliers for data centers.
- Represent capital provider in funding of natural gas pipeline development to supply natural gas to co-located power plant within large data center project.
- Represent large landowner in negotiating land use and potential co-investment with data center project developer seeking to develop natural gas pipeline and power generation and transmission infrastructure facilities on site co-located with data center facility.
Our Practices
G — Government Relations
Texas legislators and regulators are making decisions right now on water use, permitting, tax incentives and power infrastructure that will shape the data center industry for decades. GRPR, Gray Reed Advisory’s government relations division, helps clients have a seat at that table. We build tailored advocacy strategies, get clients in front of the right decision makers and monitor the thousands of bills and amendments filed each session so clients are never caught off guard.
GRPR’s government relations team is led by Adam Leggett, recognized in Capitol Inside’s 2025 Texas Lobby Power Rankings among the top lobbyists in Texas. He has a proven record on issues directly relevant to data center development including infrastructure, technology, natural resources and utilities, in addition to the relationships in Austin to get things done.
R — Real Estate
Land Acquisition & Leaseholds
Our real estate team, which includes three attorneys board-certified in commercial real estate law and is recognized in the Chambers USA 2025 guide, handles every aspect of data center site work: land acquisition and options, title, easements, land use, entitlements, financing and disposition. We also represent clients in real estate disputes.
Water Law
Water supply and water resources are key issues for Texas data centers. Our water law practice can advise on the full range of issues that arise in data center development, including:
- Groundwater ownership, the Rule of Capture and Groundwater Conservation District regulation
- Severed groundwater estates, Surface Use Agreements and title due diligence
- Surface water rights and TCEQ permitting
- Brackish groundwater and produced water as alternative industrial supplies
- Water rights reservations in deeds and acquisition documents
- Water supply, transport, recycling and disposal agreements.
I — Infrastructure
Energy & Power Transactions
For landowners, our attorneys help position property to be as attractive as possible to data center developers before a deal is ever struck. That includes negotiating surface use waivers from mineral owners, assessing and documenting natural gas availability on or near the property, structuring access and easement arrangements, and addressing any title or encumbrance issues that could complicate the site selection, option, sale or lease of a desired project site to an industrial user. Getting these pieces in place early can meaningfully increase the value and marketability of a site and development schedule of a fast-track project.
For data center developers and operators, we advise on the full range of power-related legal work that large-scale facilities require, including:
- ERCOT large-load interconnection requirements and the Large Load Interconnection Process (LLIP)
- Power purchase agreements and direct energy contracts with utilities and independent generators
- Engineering, procurement, and construction agreements for the purchase of power generation facilities and related operation and maintenance agreements
- Transmission and distribution agreements, and grid interconnection matters
- Natural gas supply and transportation agreements for onsite generation
- Surface use and facilities agreements
- Regulatory compliance and reporting obligations
Our team has deep experience in complex power transactions, including the development, construction and financing of large-scale power plants, power purchase agreements with major utilities, acquisition, and restructuring of power generation assets and procurement of non-recourse project financing.
Construction Law
Our construction team handles the full lifecycle of complex industrial builds, from contract negotiation through project closeout. We represent owners, contractors, subcontractors and suppliers on projects of all sizes, covering contracts, claims, liens, scheduling and delays, defective work, and OSHA matters. The construction team has represented project participants in both litigation and transactions related to data centers, water infrastructure and pipeline construction. We include a board-certified construction law specialist, an attorney on the AAA’s national roster of construction neutrals and a sitting Texas legislator. Our practice received national and metropolitan recognition in Best Lawyers’ 2026 “Best Law Firms” ranking.
D — Development
Corporate/Mergers & Acquisitions
Our M&A team, which is recognized by Chambers USA, Best Lawyers and ranked sixth in deal volume by The Texas Lawbook, advises buyers, sellers, investors and private equity sponsors on data center development, middle market project financing, joint ventures, recapitalizations and divestitures, with full coordination across our real estate, energy, tax, construction and water law practices.
Tax Planning
Our tax team, which includes several former Big Four accounting professionals, advises on the full range of federal and state tax issues in data center development, including economic development agreements, ad valorem exemptions, entity structuring, sale-leaseback arrangements, opportunity zones and federal energy tax credits.
S — Security (Cyber & Data)
Cybersecurity and data privacy planning begin well before the first shovel hits the dirt. From site selection and contract drafting through construction, commissioning and ongoing operations, our cybersecurity and data privacy team at Gray Reed Advisory helps clients build and operate data centers that consistently meet the security and compliance standards required by customers, counterparties and regulators. We support certification planning, regulatory compliance with Texas, U.S., and international data privacy laws, NERC audit preparedness, data breach prevention and response, and vendor and cloud agreement management throughout every stage of the project.
What Sets Us Apart
Power at Scale. Our energy team has structured and closed some of the most complex power transactions in the Americas from development and financing of large-scale generation facilities to power purchase agreements with major utilities to acquisition of regulated distribution companies. That experience is directly relevant as data center developers increasingly pursue dedicated power arrangements outside the traditional grid.
Texas-specific depth. Our attorneys have spent careers building expertise in Texas water law and other real estate matters, energy law, construction law and regulatory politics, the legal frameworks that govern the land, water and energy every data center project depends on.
Early-lifecycle focus. We work with landowners, developers and investors at the earliest stages of a data center project before sites are under contract, before permits are pulled and before power agreements are signed to enhance a project site for development.
Legislative reach. Through GRPR, we give clients a voice in the policy conversations shaping this industry. GRPR’s Managing Director of Government Affairs, Adam Leggett, previously served as chief of staff in the Texas Senate, in the Office of the Governor under Rick Perry and as a congressional aide in Washington.
Built for what’s coming. Water regulation, power interconnection rules and tax incentive programs are all in flux. The Texas Supreme Court has ruled on a number of consequential water cases the last 15 years. The State Water Plan does not yet account for data center demand. We track these developments in real time.