Houston-based Zone Frontier Inc. (NYSE American: ZONE) announced on Sept. 29, 2026, that a subsidiary has entered into a long-term ground lease covering approximately 4,077 acres in Potter County, Texas.

The lease secures the land, water, and development rights for the company's previously announced West Texas data center campus, which is being developed in partnership with HST Technologies, Inc., the AI infrastructure platform provider behind Cue®

Lease secures land, water, and development rights

Under the lease agreement, Zone may designate between 200 and 800 acres for data center facilities and related infrastructure, and at least 1,800 acres for solar generation, battery storage, and supporting infrastructure. The property surrounds Southwestern Public Service Company's existing Potter County 345 kV substation in the Southwest Power Pool region.

Southwestern Public Service Company is an Xcel Energy company, and Zone believes the location provides the campus with a potential path to grid interconnection alongside the dedicated on-site generation.

Lease structure and purchase option

The lease has an initial term of 30 years with two 10-year extension options. Base rent for each site area begins only upon the start of construction on that area, an arrangement the company said aligns land costs with development milestones. The agreement also grants Zone an option to purchase the data center site, subject to the satisfaction of certain conditions.

In addition, the lease includes a long-term water supply agreement, co-terminous with the lease, drawing on the water rights appurtenant to the property.

Site characteristics

The site is located in close proximity to two major natural gas pipelines, and the company believes it is well suited for a large-scale solar and battery plant that could add significant power capacity to the region. Zone also believes the site has favorable access to fiber services.

Management commentary

"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. "The attractive lease structure allows us to advance tenant acquisition, power and permitting work in a disciplined sequence, without committing any significant capital before the key pieces are in place."

Hassen added that the company appreciates working with the landowner and local community, and looks forward to building a flagship campus in the Texas Panhandle. "With this campus, we'll continue to invest in the local tax base, hiring, and the community more broadly," he said.

"We are now focused on securing tenants, advancing permitting, and completing power and interconnection studies for the site," Hassen continued. "As tenant discussions progress, we will concurrently evaluate financing options with both co-investment equity partners and project finance lenders. We are also focused on ensuring this project delivers lasting benefits for the local community."

Campus scale and pipeline

The Texas campus is sized to an initial 200 megawatts with potential to expand beyond 500 megawatts. It forms part of Zone's active and growing pipeline of AI infrastructure projects intended to support the rapidly increasing demand for compute power.

The company said it continues to actively evaluate additional development opportunities across rural and industrial areas of the United States.

Minnesota campus update

Zone's portfolio also includes its Minnesota data center campus, which operates under an initial 10-year Colocation Services Agreement with Cerebras Systems, Inc. (NASDAQ: CBRS), with two 10-year potential extension options.

The company said that campus is making material construction progress and that it expects to generate revenue beginning in the first half of 2027, consistent with previous guidance.

Project finance discussions for the Minnesota campus are also progressing concurrently, consistent with previous guidance.

About the company

Zone Frontier Inc. describes itself as helping to build the critical infrastructure that powers the AI economy. Through a growing pipeline of projects, the company aims to help meet the increasing demand for compute capacity, power, and digital infrastructure required by the world's leading AI companies.

The announcement was made in a press release and distributed through the company's investor relations newsroom. The release notes that forward-looking statements are subject to significant risks and uncertainties, including the company's ability to secure tenants for its Texas data center campus and to obtain sufficient power and grid interconnection.

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