First commercial data center on federal land loses approval
First commercial data center on federal land loses approval
By Zachery Schmidt Tue, November 3, 2026 at 1:30 AM UTC
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Server racks in a data center. Photo: Brett Sayles / Pexels
(The Center Square) - America’s first commercial data center approved on federal public land has hit a major stumbling block.
In October, the Interior Board of Land Appeals removed the Townsite Data Center’s federal approval and returned it back to the Bureau of Land Management for further environmental review. The appeals board temporarily halted construction in September.
BLM is now reconsidering the data center’s application and reassessing its environmental impact.
Townsite Solar 2 LLC is trying to build the data center on 88.5 acres of public land outside Boulder City, Nevada, about 30 minutes from Las Vegas.
The company said it expects the center to generate more than $1.3 billion in tax revenue over 20 years for the city, Clark County and Nevada. Boulder City would receive $82.6 million, nearly 7% of the projected tax revenue.
The company projects the data center will create 3,131 jobs and have a $1.6 billion impact on the region's economy.
The BLM approved the data center in June. However, it relied on a 2023 environmental review prepared for a potential solar project on the same site rather than reviewing how a data center would affect the area. After BLM signed off on the data center, Boulder City and environmental groups filed a legal challenge in July, questioning the agency’s environmental review.
Townsite Solar 2 LLC originally planned to build a solar project.
The company received federal approval for it in 2023, but filed a federal right-of-way authorization in 2025 to build a data center instead.
The Center Square reached out to Townsite Solar 2 LLC and the BLM, but they did not respond before publication time.
Lisa LaPlante, Boulder City’s communications manager, said the city welcomed the board’s decision to vacate the “BLM’s decision to approve a data center.”
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“It remains the city’s position that the BLM must follow federal law in approving of such a use and provide the city and the public with meaningful opportunity to be involved in if, how, when, where and why these facilities are authorized,” she told The Center Square by email.
Patrick Donnelly, the Great Basin director for the environmental nonprofit Center for Biological Diversity, said data centers are a “dangerous new use of public lands.”
The Center for Biological Diversity joined the legal challenge to the BLM’s Townsite Data Center environmental review.
According to Donnelly, America has “never done something like this with public lands before.”
He said public land development tends to focus on natural resources contained on the land, such as timber or mining.
“Data centers are completely different. It’s taking the space of public lands and putting a warehouse full of computers on it. It’s a very different conception of what public lands are for,” he noted.
“This is not a precedent [the Center for Biological Diversity] want[s] to see with our public lands,” he said.
Donnelly said any environmental review the BLM conducts needs to address potential harms from data centers, such as noise, air pollution, habitat loss, cultural resource damage and nighttime lighting.
During construction, “large amounts of dust” would be released, along with heavy water consumption, he noted, adding that noise would be audible from miles away if the data center is built.
Building the data center would cause habitat loss for the Mojave Desert tortoise, a federally protected species, he noted.
He also said if the data center is ever completed, its backup diesel generators will cause air pollution.
According to Donnelly, it is too early to tell if the Center for Biological Diversity would take more legal action against the BLM if it approves the Townsite Data Center. He noted the environmental nonprofit is here “to ensure that the law is followed.”
Source: “AOL Money”
