June 16, 2026 - TRA Newswire -

An agreement that would bring a major SpaceX chip manufacturing facility to rural Grimes County hinges on a clause that prohibits the company supporting a high-speed rail project that would pass through the area. 

Earlier this month Grimes County Commissioners approved a long term tax-abatement agreement with Space X. The company's TeraFab AI LLC would invest at least $5 billion, creating an estimated 1,800 jobs. Grimes County is located northwest of Houston with a population of 34,000. 

The hitch: if you want to build in Grimes County SpaceX can not support a proposed high-speed rail line from Dallas to Houston. The Texas Central project has a planned stop at Roans Prairie, about ten miles from the SpaceX facility.

The provision was non-negotiable, according to Grimes County Judge Joe Fauth.

In a report on KBTX-TV June 11th, Fauth was quoted as saying SpaceX outside counsel told the commissioners it's someone else's business and it should not be part of the agreement. The County Judge told them "If you can't put that in there, we're not going to be a part of the project". 

In a tax abatement agreement, Section 2.18, language specifies that SpaceX does not intent to support or participate in the proposed Texas High Speed Rail project. 

As of last week there are no indications that SpaceX has signed the agreement with Grimes County.

According to the report, Fauth said that they didn't want labor being shipped in from outside Grimes County on the railroad. He was quoted that Brazos Valley residents should be able to fill the project's needs. "We do not need to train them in from Houston or train them in from up in the Dallas area." 

SpaceX would receive a significant 35-year tax break and would be the recipient of a reinvestment zone that would be around the planned Terafab facility at Gibbons Creek Reservior. SpaceX would pay a set annual amount to the county instead of paying property taxes. If the company lives up to it's investment agreement, after 35 years the county would expect to receive around $700 million.

A spokesperson for the Terafab indicated that the project is intended to manufacture semiconductors which will support advanced AI computing, space-based computing systems and orbital data centers, satellite infrastructure and next-generation aerospace technologies. 

Photo credit: Texas Central