Soluna Wants a Tax Break on $3.8 Billion. Willacy County's Entire Tax Base Is $1.2 Billion.
RAYMONDVILLE, Texas. The number came early in the pitch. $3.8 billion.
That is what Soluna says it is proposing to spend on Project Kati 2, an artificial intelligence data center in rural Willacy County. The company put that figure next to another one. $1.2 billion. That is the taxable value of everything in the county. Every home. Every business. Every farm.
"Literally three times over, three times what the existing tax base is," a Soluna presenter told residents, according to a recording of the company's community presentation reviewed by The 956 Report.
Then came the ask.
"What we're proposing and asking for is property tax relief for a period of time on that $3.8 billion," the presenter said.
Soluna held a community open house on the project at the Raymondville Tourist Center, according to KRGV. The company says it is now drafting an application for a Chapter 312 tax abatement agreement with Willacy County. Commissioners have not voted. No application terms have been made public.
Here is what the company told residents, and how it lines up with the public record.
THE $1.2 BILLION CHECKS OUT
Willacy County's 2026 tax rate calculation worksheet lists total taxable value on the certified roll at $1,198,608,183. Soluna's $1.2 billion figure matches. A $3.8 billion project would be about 3.2 times that roll.
That is the scale of the decision in front of four commissioners and a county judge.
For context, the same county worksheet lists a 2025 adopted county tax rate of $0.6590 per $100 of value. Applied to $3.8 billion with no abatement, that rate works out to about $25 million a year in county taxes. That is an illustration, not a forecast. Appraised value, depreciation, the rate itself and the terms of any agreement would all change the real number. But it shows what is on the table when a company asks for relief "for a period of time."
Soluna's first project offers a comparison. "Our legacy Kati 1 project already has a commitment where it has to pay to the county $160,000 a year," the presenter said. The RGV Business Journal reported in November 2025 that the Kati 1 deal abates about 63.2 percent of the project's improvement value.
Soluna said Kati 2 would include a similar fixed payment. The presenter described it as "a standard payment over several years that the county can rely on, essentially a budgeted amount." No dollar figure was given in the portions of the recording reviewed. The Rio Grande Guardian reported on Nov. 13 that CEO John Belizaire said the terms are still being negotiated and the payment is expected to be significantly larger than Kati 1's.
THE SCHOOL TAX CLAIM NEEDS AN ASTERISK
Soluna leaned on schools.
"School taxes are not abated," the presenter said. "The school taxes on that $3.8 billion investment will flow from day one."
The first sentence is accurate. Texas school districts cannot grant Chapter 312 abatements. The Lyford school district would tax the project at full value.
The second sentence is where residents should ask questions. Under the Texas school finance system, when a district's property value rises, the state generally reduces its share of that district's funding. A bigger tax base does not translate dollar for dollar into a bigger school budget. The clearest local gain is usually on the debt side, where a larger base can make bond payments lighter for other taxpayers. How much new money actually stays in Lyford classrooms is a question for the district's finance office, and nobody put a number on it in the recording.
THE FIVE STEPS
Soluna laid out its roadmap in five steps. Application. Public notice in local media. Public hearing. Commissioners court vote. Then monitoring.
"This is a chance for your voices to be heard," a presenter said of the hearing.
Asked which step matters most for residents, a presenter addressed as Mike pointed to the third. "You kind of get two bites at the apple," he said. Tonight, and the public hearing.
The company was plain about the outcome it wants. Presenters said they believe the abatement "is in the best interest of the county" and "hope for an affirmative vote."
WHO HOLDS SOLUNA ACCOUNTABLE
Soluna said the agreement itself is the leash.
"This Chapter 312 agreement is the mechanism to hold Soluna accountable," a presenter said. The company described annual reporting on its commitments, a fund to repair roads damaged by heavy equipment during construction, and language on water use.
"The county has the final say," the presenter said. "If Soluna doesn't live up to our agreement down the road, the county can cancel the abatement moving forward."
That power is only as strong as the contract. Every one of those protections has to be written into the agreement, with numbers. Job counts. Investment minimums. Deadlines. Recapture of abated taxes if the company falls short. Cancelling an abatement "moving forward" is not the same as clawing back taxes already forgiven. Which one Willacy County gets will be in the fine print.
WATER, MEASURED IN HOUSES
"The most important thing for you to understand is we use water sparingly," a presenter said.
Soluna did not give gallons in the portions reviewed. It gave houses. One home's use for one year is the company's unit.
Construction: about 75 homes' worth, described as essentially one-time use. About 40 of that goes to soil compaction for the building pad. The rest goes to dust control and filling fire protection tanks.
Operations: about four homes' worth a year. "Essentially four houses worth of water year in, year out to support the 40 people that are working there," the presenter said.
That figure covers staff use. Cooling is a separate matter. Belizaire told the Rio Grande Guardian that Kati 2 will use direct liquid cooling in a closed loop of glycol-treated water that is trucked in from off-site suppliers and recirculated. Soluna's Ben Carranza, the company's director of community engagement, compared the system to a car radiator in an interview with KRGV.
Worth noting: Soluna's own FAQ for Kati 1 says that site uses no water to cool equipment because it is air-cooled. Kati 2 is a different design. How many gallons fill that loop, where the water is sourced, and how often it is topped off or replaced are not answered by a houses comparison.
THE NUMBERS THAT DO NOT MATCH YET
Soluna's public filings and its public pitch describe the same project in different sizes.
Cost. Residents heard $3.8 billion. The Rio Grande Guardian reported "nearly $4 billion." A Texas Department of Licensing and Regulation registration filed Oct. 7 lists Project Kati II Building 1 at an estimated $471.8 million, as reported by the RGV Business Journal. The gap may be the difference between one building's construction cost and a full campus loaded with computer hardware. Soluna has not broken out the $3.8 billion in public.
Power. Residents heard that the first phase "will consume about 166 megawatts." Soluna's June securities filing describes Phase I as 100 megawatts of critical IT capacity and Phase II as another 250. The state registration says about 112 megawatts of critical IT load. Critical IT load and total facility draw are different measurements, but the public has been given three numbers.
Timing. Residents heard completion in the second quarter of 2028. The state registration estimated construction from Oct. 8, 2026 to Oct. 8, 2027. A registration does not confirm that construction has started.
Ownership. Presenters said Soluna is proposing to spend the money. Soluna's securities filings say Kati 2 is being developed through a joint venture with an affiliate managed by Metrobloks, a Los Angeles data center developer. Which entity signs the abatement agreement, and which entity is on the hook if promises are missed, matters.
Future phases. "We haven't decided the size of each of the future phases," a presenter said, adding that the application will spell them out.
A $3.8 BILLION PROMISE FROM A 50-CENT STOCK
There is one more number residents did not hear in the portions of the recording reviewed. Soluna's share price.
Soluna Holdings trades on the Nasdaq under the ticker SLNH. On Friday, Nov. 13, the day after KRGV said the open house was scheduled, the stock was changing hands at about 49 cents, according to CNBC market data. CNBC listed the company's market value at about $124 million.
Put that beside the pitch. The project Soluna described in Raymondville is priced at roughly 30 times what the stock market says the entire company is worth.
The slide has been steep. CNBC lists a 52-week high of $2.36, set in May, and a 52-week low of 45 cents, set on Nov. 5. A TradingView monthly chart shows the stock down about 26 percent so far in November.
The long view is harsher. That same chart shows a 2021 peak above $400 a share. That figure needs a footnote. It is adjusted for a 1-for-25 reverse stock split Soluna carried out in October 2023, which the company said in securities filings was meant to lift the share price back above the $1.00 minimum Nasdaq requires for continued listing. Shares did not literally sell for $400. But a holder from the 2021 peak has lost nearly all of the investment.
The $1.00 line is back in play. Soluna told investors it regained compliance with Nasdaq's minimum bid rule on April 30. The stock has since fallen back under a dollar. No new Nasdaq notice appears in the filings reviewed for this story.
The other half of the story is share count. Soluna funds its growth largely by selling new stock. Its quarterly report shows 102.5 million shares outstanding at the end of 2025 and 225.8 million by June 30. It reported raising about $113.5 million through at-the-market stock sales in the first half of the year. On Oct. 16, stockholders approved raising the authorized share limit from 375 million to 1 billion, according to a company securities filing. CryptoSlate reported the vote was tied to a standby equity arrangement of up to $250 million.
None of this means Kati 2 cannot be built. Fairness requires the other side of the ledger. Soluna reported $113.4 million in cash at June 30 against $33.1 million in debt. Second quarter revenue was $15.1 million, up 145 percent from a year earlier, alongside a net loss of $22.6 million. Projects of this size are usually financed at the project level, with partners, lenders and tenant contracts, not out of the parent company's stock price. That is the role of the Metrobloks joint venture.
But that is exactly why the stock matters to Willacy County. A company worth about $124 million is not writing a $3.8 billion check. Someone else is. Who that is, on what terms, and what happens to the county's agreement if the financing, the tenant or the partner changes, are questions the abatement contract has to answer in writing.
40 JOBS
Soluna promised 40 permanent jobs once construction ends, along with community training programs and a scholarship fund so that residents "can stay and live and work in this community."
On $3.8 billion, 40 jobs comes to $95 million of investment per permanent position. That is typical of data centers, which are heavy on equipment and light on staff. It is also why the abatement terms, the fixed payment and the school finance math carry more weight for Willacy County than the payroll does.
NOT JUST WILLACY
Kati 2 is one piece of a larger South Texas plan.
In April 2025, Soluna announced a signed term sheet for power for Project Hedy, a 120 megawatt data center to be built in two 60 megawatt phases next to a 200 megawatt wind farm in Cameron County. The company described the wind farm's owner only as a multinational conglomerate. "We're excited to partner with and leverage the exceptional wind resources of Cameron County," Belizaire said in that release.
A term sheet is not a final deal. Soluna said at the time it still needed definitive power purchase agreements, land agreements and ERCOT planning. Its annual report filed this year still lists Hedy as in development, alongside a second Cameron County site, the 100 megawatt Project Ellen. The RGV Business Journal reported in January that Soluna had not disclosed which Cameron County wind farms would host them.
So the terms Willacy County sets on Kati 2 will not stay in Willacy County. They become the reference point for the next ask, one county south.
SOURCES
Recording and transcript of Soluna's Project Kati 2 community presentation in Raymondville, reviewed by The 956 Report.
Willacy County 2026 Tax Rate Calculation Worksheet (certified taxable value $1,198,608,183; 2025 adopted rate $0.6590 per $100):
KRGV, Nov. 11, 2026, open house venue and time, Ben Carranza comments, prior 15-year abatement:
Rio Grande Guardian, Nov. 13, 2026, Belizaire interview:
RGV Business Journal, Oct. 7, 2026, TDLR registration, $471.8 million, 112 MW:
RGV Business Journal, Nov. 15, 2025, Kati 1 abatement terms:
Soluna Form 8-K summary, joint venture with DC Kati Venture LLC, 100 MW Phase I and 250 MW Phase II:
Soluna Project Kati FAQ, Kati 1 air cooling:
Soluna press release, April 8, 2025, Project Hedy term sheet (provided by Josh).
Soluna Form 10-K summary, Hedy and Ellen listed in development:
RGV Business Journal, Jan. 15, 2026, Cameron County projects and Metrobloks:
CNBC quote page, SLNH price, market cap, 52-week range (as of Nov. 13, 2026):
TradingView monthly chart, SLNH, captured Nov. 14, 2026 (provided by Josh).
Soluna Form 8-K, Oct. 2023, 1-for-25 reverse stock split:
Soluna Form 10-Q, 2024, stated purpose of the reverse split:
Soluna Form 8-K summary, Nasdaq bid price compliance regained April 30, 2026:
Soluna Form 10-Q summary, quarter ended June 30, 2026 (shares, ATM proceeds, cash, debt, net loss):
Soluna Form 8-K, Oct. 16, 2026 annual meeting, authorized shares raised to 1 billion:
CryptoSlate, share proposal and standby equity facility:
Texas House bill analysis, Chapter 312 abatements may not be granted by school districts:
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