MCALLEN, Texas - Willacy County Judge Aurelio Guerra is excited about a foreign trade zone being extended into his county, says McAllen Foreign Trade Zone’s president and CEO.
Mark E. Garcia spoke about his FTZ being expanded into Willacy County when he gave an in-depth presentation to McAllen Economic Development Corporation’s stakeholders group. He said Port Mansfield would benefit from MFTZ and so would Soluna Holdings, when it develops is second data center in Willacy County, Project Kati 2.
Garcia explained the MFTZ-Willacy County tie-up with the help of a power-point presentation.
“This is Willacy County. This is what we're working on right now,” Garcia said, pointing to a slide in his presentation.
“We’re looking at expanding into Willacy County and bringing that county into our service area. Right now, we have an application with the (FTZ) board up in Washington. It’s been delayed because of all the furloughs and stuff. But we’re hoping to get a final approval in May sometime.”
Garcia continued: “I don't know if you all seen the (media) coverage, but Judge (Aurelio) Guerra is really excited about bringing his county into our umbrella of services.”
Garcia then explained what is happening at Port Mansfield.
“Port Mansfield just hired her new port director. There is a lot going on at Port Mansfield and I'll show you some of that,” Guerra said, pointing to a slide in his presentation.
“This is the port. That's the sea wall. That’s the area where they are doing construction for barge traffic. It's been in process for probably a little over a year now. It's kind of moving slow, but the (Willacy County) Navigation District does want it to happen. Of course, there's some pushback from some of the residents. I'd say most of the residents. They don't want any any type of operation there, but it's going to happen regardless.”
Garcia then showed a slide featuring a pad site where they plan to bring in barge traffic. “They have a 17 foot draught. You need about 12 feet to get the barges in. So, it (the ship channel) had to re-dredged and now there is more than enough depth to get the barges in.”
Garcia then discussed the Soluna Holdings data center project that is happening in the southeast corner of Willacy County. Soluna is a developer of green data centers for intensive computing applications, including Bitcoin mining and AI,
“That's Project Kati, a nice project. It will bring a lot of a lot of money and tax revenue to Willacy County,” Garcia said, pointing to a slide in his presentation.
“These data centers are going to start to happen more and more. I'm sure you all are aware, there is a lot of activity right now and I guess people are talking more and more about data centers. A lot of people don't want them but I don't know that there's a whole lot of negative to them. Yes, they do require water and power, but, as you know, Governor Abbott just passed legislation that requires new data centers to bring their own power. So that's going to make a big difference going forward.
Guerra added: “It's really a boon for anybody, whether it's the municipality, the city, or the county that gets these data centers. They bring a lot of extra money to the tax base, especially for a rural county like Willacy. We’re hoping to get the application done quickly so Soluna can bring some of their components in from overseas. And that's where they can benefit. The equipment that they're bringing in is worth millions and millions of dollars. They can bring it in and defer duties until they actually put the equipment into production. That is a big benefit (of having a foreign trade zone).”
Meanwhile, there has been a new development with regard to Soluna’s Kati 2 project. Here is a recent press release the company issued:
Soluna Holdings, Inc., a developer of green data centers for intensive computing applications, including Bitcoin mining and AI, has signed a Memorandum of Understanding (MOU) with Metrobloks, LLC, a data center developer and operator focused on AI-ready infrastructure, to enter into a co-development partnership to build Project Kati 2.
The initial development will be a 100+ MW Critical IT (CIT) AI and high-performance compute (HPC) data center at Soluna’s Project Kati 2 campus in Willacy County, Texas. This is expected to be the first phase of a larger campus, with an expansion roadmap supporting more than 300 MW of total CIT capacity.
By combining Soluna’s renewable-powered campus and experience working with ERCOT’s reliable grid with Metrobloks’ AI-ready data center design, development, leasing, and operations platform, the venture aims to shorten time-to-market for customers who need dense, GPU-ready capacity and have struggled to find locations with both power and interconnection. Metrobloks specializes in high-density, sustainable data centers for AI and low-latency applications, with a leadership team that has enabled more than 12 gigawatts of global data center capacity. Located in South Texas near McAllen, Project Kati adds geographic diversity as a southern U.S. deployment option, supporting alternative siting strategies beyond Central and West Texas.
“Project Kati is our blueprint for Renewable Computing at scale, and this site reflects the kind of infrastructure AI now demands,” said John Belizaire, CEO of Soluna. “This site offers what AI and HPC deployments need most right now: available power, strong renewable resources, and a regulatory and grid environment that supports speed. Our team spent years securing the right location and power position at Kati. By partnering with Metrobloks to lead design, operations, and customer engagement for Kati 2, we can accelerate AI and HPC deployment while staying focused on what we do best, turning constrained renewable energy into productive compute.”
Soluna and Metrobloks intend to form a project company to own and operate Project Kati 2. Metrobloks will lead design, development, leasing, and day-to-day operations, including securing pre-lease commitments and managing customer engagement. Soluna will contribute site control, power entitlements, electrical equipment, and development expertise, while both parties will jointly source and structure third-party capital for the project. The site is currently under a (non-binding) letter of intent from a potential neocloud tenant. Looking ahead, the parties are working with EDF Power Solutions to source additional power from the Las Majadas wind farm to expand the project.
“Customers are telling us the same thing in every market. They need power and capacity now, not years from now,” said Ernest Popescu, CEO, Metrobloks. “Project Kati stands out because the power is both available and scalable. Soluna has already done the hard work to secure a renewable-powered site with room to grow. We’re building on that foundation with AI-ready design and a clear path for customers to scale high-density AI and HPC workloads beyond the initial 100 MW.”
Soluna broke ground on Project Kati in September 2025. The 166+ MW Texas wind-powered campus in Willacy County is being developed in two phases. The second phase, Kati 2, is designed to expand the campus with a dedicated 100 MW+ AI and HPC infrastructure in phase one, establishing Project Kati as a renewable-powered, dual-purpose facility that can serve both digital assets and AI or HPC customers as demand evolves.
