The Daily Dig
Zone Frontier Inc. has signed a ground lease on about 4,077 acres in Potter County, Texas. The deal, announced September 29, 2026, secures the land, water and development rights for their planned West Texas AI data center campus.
Zone is developing the campus with HST Technologies, Inc., the AI infrastructure platform provider behind Cue. The campus is sized to an initial 200 megawatts, with potential to expand beyond 500 megawatts.
Under the lease, Zone can designate between 200 and 800 acres for data center facilities and related infrastructure. They can also designate at least 1,800 acres for solar generation, battery storage and supporting infrastructure.
The property surrounds an existing 345 kV substation in the Southwest Power Pool region, owned by Southwestern Public Service Company, an Xcel Energy company. Zone believes the substation gives the campus a potential path to grid interconnection, alongside planned generation on the property.
The site also sits close to two major natural gas pipelines. Zone says they consider the land well suited for a large solar and battery plant and believe it has favorable fiber access.
Rent Control
The lease runs an initial 30 years, with two extension options of 10 years each. Base rent for each site area begins only when construction starts on that area, so land costs track actual development.
Zone also holds an option to buy the data center site, subject to certain conditions. A water supply agreement draws on the water rights that come with the property and runs for the full term of the lease.
"This agreement gives Zone what matters most in AI infrastructure: land at scale, a faster path to power, and water, all secured under one long-term agreement with tremendous option value," said Tyler Hassen, Chief Executive Officer of Zone Frontier.
Help Wanted: One Tenant
Zone currently plans to begin construction after they secure a tenant, and tenant acquisition is one of their stated priorities.
"We are now focused on securing tenants, advancing permitting, and completing power and interconnection studies for the site," Hassen added. As tenant talks progress, Zone plans to weigh financing options with equity partners and project finance lenders.
Snapshot:
Project: West Texas data center campus
Developer: Zone Frontier Inc. (NYSE American: ZONE), through a subsidiary
Development Partner: HST Technologies, Inc. (provider behind Cue)
Location: Potter County, Texas (Texas Panhandle)
Sector: AI data center
Total Leased Land: Approximately 4,077 acres
Data Center Acreage: 200 to 800 acres (at Zone's designation)
Solar, Battery and Support Acreage: At least 1,800 acres (at Zone's designation)
Capacity: Initial 200 MW; potential beyond 500 MW
Potential Grid Connection: Southwestern Public Service Company's Potter County 345 kV substation, Southwest Power Pool region (interconnection studies pending)
Nearby Infrastructure: Two major natural gas pipelines; favorable fiber access (per company)
Lease Term: 30 years, plus two 10-year extension options
Rent Structure: Base rent begins per site area at start of construction
Purchase Option: Data center site, subject to conditions
Water: Supply agreement running for the full lease term, drawing on water rights tied to the property
Status: Lease signed; securing tenants
Construction Start: Currently planned after securing a tenant
Near-Term Focus: Tenant acquisition, permitting, power and interconnection studies
Financing: To be evaluated with equity partners and project finance lenders as tenant talks progress
Company-Identified Risks: Tenant acquisition, power, grid interconnection, water, project financing
Announced: September 29, 2026
Other Company Project: Minnesota data center campus, with a 10-year Colocation Services Agreement with Cerebras Systems, Inc.; revenue expected in the first half of 2027
Company Background: Transitioning business model from cleaning services to AI infrastructure (per company risk disclosures)
TheJobWalk Thoughts
Zone's stated next steps double as a procurement signal. Permitting and power and interconnection studies typically fall to environmental, civil and utility engineering firms, well before any builder mobilizes.
For GCs and trade partners, the tenant is the milestone to watch. AI tenants typically bring firm requirements for power density, cooling and layout, and those specs tend to define the scopes worth chasing.
The lease hints at pacing, too. Base rent starts one site area at a time, and capacity begins at 200 megawatts. That points to a campus built in stages, though Zone hasn't said so.
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