They may call Dallas “Big D,” but a smaller city 18 miles to the south is making a big name for itself in economic development.
Welcome to Red Oak, a 15-square-mile town of 21,846 people in Ellis County and one of the 10 fastest-growing cities in America.
Located on Interstate 35 — the highway that runs from Mexico to Canada and cuts through the heart of Texas — Red Oak is garnering a lot of attention, and not just from the 106,000 motorists who drive through it every day.
After serving for decades as a bedroom community sending workers to jobs in Dallas and other places in the Dallas-Fort Worth Metroplex, Red Oak now is building a business destination of its own.
Photo courtesy of City of Red Oak
“Citizens were trained to go to other communities for their needs,” says John Knight, assistant director of economic development for the Red Oak Economic Development Corp. (ROEDC). “We have concentrated on retail and lifestyle. Leaders here bought substantial acreage for a business park. That brought in new industrial development. A large manufacturing plant was built and later Embraer came in. Now it is occupied by a large defense contractor.”
The biggest change came when data centers discovered Red Oak. With investors like Compass Datacenters and Google coming to town to erect multiple data center buildings, Red Oak has a taxable property value of $2.9 billion today and is on pace to reach $11 billion in taxable value upon buildout of all facilities. Google announced its $600 million data center investment in Red Oak on a 375-acre tract off Ovilla Road in 2023.
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Knight says the future for Red Oak is even brighter. “We have an additional $30 billion of capital investment in the pipeline,” he says. “From an intentionality standpoint, Red Oak has assembled large portions of land. When a data center comes in, they know who they are negotiating with, and they get a fair price. It shows the desire of the city to work with them. I love our citizens, and I love what the data centers will allow us to do for our citizens while reducing our tax rate. They’ll provide more taxes than we’ve ever collected before.”
“TxEDC is a great vehicle for introductions and collaboration. They bring the best of private industry, cities and public interest together.”
— John Knight, Assistant Director of Economic Development, Red Oak Economic Development Corp.
Asked what turned the tide for Red Oak, Knight says that “for a long time, the hyperscalers needed to be within 30 kilometers of data center gravity. For us, that is downtown Dallas. We were within that distance for the highest-quality fiber. We had raw land available. We have high-voltage lines running through our city. All the buildings in Red Oak except one are either air-cooled or closed-loop systems. They’re building water infrastructure that otherwise our citizens would have to pay for. We have redundance with our power lines. We don’t have the outages that other communities do. And our planning and development team is very intentional.”
Knight says the ripple effect from the data centers has been huge. “Compass brought in a Schneider Electric plant with over 100 workers paying over $80,000 per year on average. They would not be here without the Compass data center here.”
Workforce development efforts benefited too.
“Compass recognized they needed labor. They worked with Texas State Technical College to set up our new MEI [mechanical, electrical and IT] program,” says Knight. “It costs $13,000 per student. They go through a 13-week program at TSTC. Last semester, the program placed 11 of the 12 students in good jobs. Compass awarded scholarships for the whole class last semester, and Schneider provided scholarships to the whole class this semester.”
How TxEDC Helps Red Oak Grow
A desire to support economic development attracted city leadership to the Texas Economic Development Corp. (TxEDC), says Knight. “We got involved with TxEDC because we wanted to be the ones telling the true positive story about data centers and busting the myths surrounding them. We also wanted to work with other cities to further the Texas miracle.”
Knight adds that “TxEDC is a great vehicle for introductions and collaboration. They have been excellent partners. They bring the best of private industry, cities and public interest together. They bring a reliable and credible voice to the lawmaking process in Austin. They intentionally seek out the experts.”
Because of that, “we became an investor late last year,” Knight says. “As we got engaged, we saw the value, and then we increased our support to the highest-level investor. The ROI has been fantastic in just a six-week period. We received access to resources and people that we could not get without them.”
