Data Centers & Digital Infrastructure
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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 is 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 provide guidance on zoning classifications for data centers, entitlements, platting, subdivision matters, local government incentives, and the negotiation of critical infrastructure agreements, including impact fees and development agreements for roadways, water, and sanitary sewer services.

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 access 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 manage environmental risks effectively throughout the project lifecycle.

Tax
Winstead led the advocacy effort to successfully pass House Bill 1223 (effective September 1, 2013), establishing an exemption from Texas sales and use tax for large qualifying data center projects. Our attorneys advise data center clients in qualifying for the exemption and 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 in reducing project risk in sports, transportation, airport, hospital, industrial, and multifamily projects. Its transactional concentration is complemented 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 Texas's largest and most prominent data center developments, 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 in 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's 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.

Insurance Advice and Insurance Recovery
Winstead’s insurance coverage practice is exclusively dedicated to representing corporate policyholders in all aspects of their insurance and risk management needs from a legal standpoint. This covers the entire insurance lifecycle, from advice concerning policy placement and the claim process through litigation or arbitration of any coverage disputes that arise. Winstead’s expertise catered specifically to our data center clients involves assisting with coverage issues during the construction phase through operational and decommissioning phases, including coverage for first-party losses as well as third-party liabilities. We also help our clients with insurance procurement and indemnity provisions in a wide range of contracts concerning data centers.

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.

Experience

  • Represented Databank Holdings in undertaking a significant project to develop a hyperscale data center on approximately 230 acres in Red Oak, Texas, in Ellis County. This project represented an anticipated investment of over $5B and features a data center with 400 MW capacity and 3 million square feet of infrastructure. The legal representation for the project involved zoning and entitlement processes, negotiating tax abatements with the City of Red Oak and Ellis County, and handling land acquisition agreements with Oncor.
  • Representation of a multinational technology company in the site selection, planning, due diligence, entitlement, and incentive procurement, acquisition, and development of a $1B mission-critical, hyperscale data center in AllianceTexas Industrial Park, Fort Worth, Tarrant County, Texas.
  • Representation of a major university system in preparation for a ground lease for the development of a proposed gigawatt hyperscale data center. 
  • Represented a multinational Bitcoin mining operator in the acquisition, development, and operation of a 400 MW data center in Pyote, Texas. 
  • Representation of a multinational technology company in the site selection, planning, due diligence, entitlement, and incentive procurement, acquisition, and development of a $800 million mission-critical data center located in Temple, Texas.
  • Representation of a pediatric hospital system in the negotiation of data center leases in Texas.
  • Representation of a commercial real estate services organization in the preparation and negotiation of a construction contract for a data center.
  • Represented one of the world’s largest Bitcoin mining operators in securing complex ground sublease and ultimate multiphase development (and associated international joint venture and construction financing) of a 600 MW capacity data center complex in North Texas. 
  • Represented a Tokyo-based, global top 10 IT and data company in the acquisition and development (including a local government incentives package) of an award-winning, multiphase colocation data center in Garland, Texas.
  • Represented multiple syndicated credit facilities for the acquisition of infrastructure assets, including cell towers, roof antennae, and data centers. ($1B)
  • Represented a syndicated credit facility to finance the acquisition of data center properties. ($475M)
  • Negotiated city and county incentive agreements, including a Chapter 380 grant agreement, and multiple tax abatement agreements for a roughly 1 million-square-foot data center campus with an aggregate investment of over $1B for a global social networking website.
  • Asset management for an approximately 150-acre data center campus, representing one of the largest concentrations of computing power in the state, including negotiation of easements and infrastructure agreements with governmental entities, adjacent landowners, gas and utility companies.
  • Negotiated multimillion-gallon municipal supply contract for data center in central Texas.

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