PLANNING & LAND USE REFERENCE

Permitted & Prohibited Uses

Development Agreement Exhibit D - Land Use Matrix
First Amended & Restated SMART Terminal DA (2023)

Source: Res. 2023-20R / PDA-22-07, Exhibit D. Uses are defined by Subpart B of the San Marcos Development Code unless the agreement provides its own definition.
Section 3 of the Development Agreement states: "Notwithstanding any restrictions, rights or privileges under applicable laws or the City's Development Code and other ordinances, the Permitted Uses shall be allowed on the Property and the Prohibited Uses are expressly prohibited on the Property."

The agreement also provides (§1.04.A): "In the event of a conflict between this Agreement and the SMDC or the City's Codes and Ordinances, this Agreement shall control." The initial term runs 45 years from January 2023, with options to extend through 2083.

Coverage note: The development agreement covers the approximately 2,017 acres held by Franklin Mountain San Marcos I, LP. A separate ~75-acre parcel (CAD ID 28052, acquired April 2024) is held by a distinct entity - Franklin Mountain San Marcos 75, LP - and is not a party to this development agreement. The permitted and prohibited uses on this page do not apply to that parcel.
Source: Res. 2023-20R - PDA-22-07 Final Draft Agreement, §§1.04, 3; Exhibit D.
Note - Data Centers & the June 16, 2026 City Ordinance
On June 16, 2026, the City of San Marcos passed Ordinance 2026-08(b) - a broader Development Code overhaul whose second reading defined data centers and made them ineligible in all zoning districts citywide. Because data centers are an explicitly named Permitted Use in Exhibit D (item 45) - and because the development agreement constitutes a vested-rights permit under Texas Local Government Code Chapter 245 and controls over subsequent city ordinances - the owner would have a strong legal argument that traditional data centers remain permitted on this property notwithstanding the new ordinance.

However, the SMDC's updated data center definition (§5.1.7.10, effective 2025) explicitly includes cryptocurrency mining, while the development agreement's custom definition does not. The status of crypto mining facilities on this site is legally ambiguous.

Backup diesel storage conflict: Most real-world data centers rely on bulk on-site diesel storage for backup generators. That runs into two Prohibited Uses below - "Manufacturing or storage of hazardous materials or explosives" (item 5) and "Refining or retail sale or bulk storage of fuel, liquified petroleum and flammable liquids" (item 23) - neither of which carves out an exception for generator fuel tanks (the only fuel exception covers fuel "contained in vehicles, locomotives, or railcars"). A developer could argue generator tanks are an accessory use incidental to the permitted Data Center use rather than a standalone prohibited use, but Exhibit D's absolute language ("expressly prohibited... regardless of what would otherwise be permitted") makes that a contestable argument, not a clear one.

Read the full analysis of the data center exemption →

Permitted Uses - Entire Property (51 uses)

Permitted All parcels - property-wide

The following uses are permitted by right under Exhibit D across the entire ~2,017-acre site, regardless of any subsequent city ordinance changes during the agreement term.

* Data Center - custom definition in the agreement: "A facility of networked computer systems and associated components, such as telecommunications and storage systems, that businesses or other organizations use to organize, process, store and disseminate large amounts of data." This definition was added because the term was not defined in the SMDC at the time of execution. The SMDC's subsequently adopted definition (§5.1.7.10) is broader and explicitly includes cryptocurrency mining; the agreement's narrower definition controls on this property.

Additional Permitted Uses - West of Loop 110 Only

Geographic Restriction Parcels west of Loop 110 only

These service and retail uses are permitted only on portions of the property located west of Loop 110.

Confirmed Enforcement - 2026 Prospective Tenant Rejections
Three 2026 RFI responses show these prohibited-use provisions being actively applied to turn away prospective tenants (see the full RFI tracker):

Prohibited Uses

Prohibited Expressly forbidden - entire property

The following uses are expressly prohibited on the property regardless of what would otherwise be permitted under the SMDC or city zoning.