SpaceX asks its company town for a tax break on a $24 billion gas plant and data center
Starbase's three-member commission, two of whom work for SpaceX, votes December 9 on the property tax abatement for the plant that would power the company's fast-growing compute business. The notice never prices the giveaway, and the governor-elect who campaigned against data centers takes office in January.
Vincent Jiangfour-minute read
SpaceX+1.27% — SpaceX, up 1.27 percent today has asked Starbase, Texas, the city it built around its launch range, for a property tax break on a gas-fired power plant and super-compute facility it proposes to construct, own and operate, at an estimated $24 billion for the initial phases 1. The one-page hearing notice is dated November 6; by Monday's close SpaceX (SPCX) had risen 5.8% to $142.07, above its June IPO price of $135, before easing back on Tuesday 23.
The site is a 444-acre tract just east of Brownsville, between Boca Chica Boulevard and the Port of Brownsville 3.
The land left Brownsville in August
Starbase incorporated as a city in 2025 and is home to several hundred SpaceX employees and their families 3. In August, Brownsville commissioners voted the 444 acres out of their city and approved up to $220 million from SpaceX for water projects 4.
In September the company proposed a Florida pipeline to feed Starship and began hiring its own gas traders in Starbase and Cape Canaveral 35. On November 3, Gina Hinojosa won the Texas governor's office on a pledge to stop data-center development until state protections exist; the notice is dated three days later 6.
Building past the queue
The plant's job is to decouple the compute's start date from the grid. A pending state air filing for the Boca Chica site, per a local filing report, covers 35 temporary gas turbines of about 748 megawatts, later to be replaced by eight permanent turbines of about 708; a SpaceX affiliate has filed plans for an eight-mile gas pipeline, Starpipe, to enter service by January 2027 2.
The plant would feed the company's largest business: the Super Intelligence segment booked $7.56 billion of third-quarter revenue against $813 million a year earlier, ahead of Starlink's $5.2 billion 72. The capital behind it runs ahead of the sales 8.
Capital spending has outrun revenue in five of SpaceX's last six reported quarters
Starbase phase one would add $24 billion of planned spend on top of the ramp
- Revenue
- Capital spending
Data
| Revenue | Capital spending | |
|---|---|---|
| Q1 '25 | $4.07B | $4.14B |
| Q2 '25 | $4.07B | $2.83B |
| Q3 '25 | $5.58B | $6.88B |
| Q1 '26 | $4.69B | $10.11B |
| Q2 '26 | $7.81B | $18.37B |
| Q3 '26 | $14.58B | $19.59B |
The vote belongs to three people
The commission takes up a Chapter 312 tax abatement and a related economic development agreement at 7 p.m. on December 9 at Starbase City Hall, and the public may speak 42. Two of its three members work for SpaceX: the mayor, who is the company's vice president of Texas test and launch, and its senior director of environmental health and safety; the third works for a pharmaceutical company 9.
The notice omits the break's size and length, the plant's generating capacity and who would use the compute; Texas law requires the final agreement to list the improvements and recapture the lost taxes if they are not built 2. No public document prices what a city of about 500 would give up 9. The ask echoes the Louisiana abatement won in September, the largest in that state's history 10.
Austin is the bigger risk
"It is not that I hate data centers. I hate the way they are taking advantage of Texas, and that stops when I'm governor," Hinojosa said on November 5 6. Elon Musk spent about $225 million on Texas elections and lost 9.
His companies already have one turbine fight in court: a federal judge let the NAACP's Clean Air Act suit over 35 unpermitted turbines at the Colossus data center near Memphis proceed on October 31 11. A city vote cannot shield the project from a state ban or a state air permit 2.
Two dates tell the two paths apart
Anthropic$350B — Anthropic, private, latest valuation $350B, whose contracts fund the chip purchases, could begin trading as early as November 19 or 20 after pulling its $70 to $80 share range on Monday 12; it has committed up to $120.5 billion to SpaceX compute through 2029, about $3.1 billion a month from December, and either side can walk on 90 days' notice after early 2027 13.
Lenders are already inside: Goldman Sachs is syndicating $40 billion of chip debt secured against the Texas buildout, at rent owed unconditionally 14. The December 9 terms answer the tax question; Austin answers the permit one 7. A stock at roughly 70 times trailing sales 7 now waits on a vote of three. The plant is the asset. The contracts are the cash. December 9 is the gate 7.
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