Federal panel halts first data center planned for US public land

The Interior Board of Land Appeals granted a stay on September 1 halting construction of what would have been the first data center built on U.S. public land, after environmental groups and Boulder City, Nevada, residents argued federal regulators approved the project without a required site-specific environmental review.

The board found that the Center for Biological Diversity and the Sierra Club’s Toiyabe Chapter were “likely to succeed on the merits” of their appeal, which argued the Bureau of Land Management unlawfully approved the Townsite data center by relying on an environmental review conducted years earlier for a solar power plant proposed for the same site, according to the board’s written order.

The project, proposed by Townsite Solar 2, LLC, was originally reviewed under the National Environmental Policy Act as a solar facility. When the developer later amended its application to build a data center instead, the BLM determined the 2023 solar review could be carried over without a new, project-specific environmental assessment, according to Common Dreams.

“We’re thrilled that this data center has been stopped dead in its tracks,” said Patrick Donnelly, Great Basin director at the Center for Biological Diversity, in a press release.

Olivia Tanager, director of the Sierra Club’s Toiyabe Chapter, said the ruling “is a victory for democracy, public participation and the principle that our public lands should serve the public.”

Boulder City resident Brynn deLorimier said in the same press release, “We love our community and our desert, and we’re so grateful to our friends and neighbors for working hard to protect both.”

The stay pauses construction while an expedited appeal proceeds before the board, an appellate body within the Department of the Interior. The appeal was filed by the Center for Biological Diversity and Sierra Club Toiyabe Chapter along with Boulder City residents, according to the Center for Biological Diversity.

The Townsite project was proposed on Bureau of Land Management land near Boulder City as part of the Trump administration’s 2025 “AI Action Plan,” which directs federal agencies to identify public land for data center development. Common Dreams reported that four additional sites have already been identified for potential development under the same plan.

Opponents of the Townsite project raised concerns about the facility’s projected electricity and water demand, and about habitat loss for the Mojave desert tortoise, a species listed under the Endangered Species Act, in the area surrounding Boulder City, according to Common Dreams.

The case is being watched as a test of whether federal land managers can approve data centers on public land using environmental reviews conducted for different types of projects, according to the Las Vegas Review-Journal.

Interior Department Administrative Judge David Gunter, who issued the stay, wrote that a solar farm and a data center are not “substantially the same” use of the land, rejecting Townsite Solar 2’s argument that the 2023 solar review could stand in for a data center review, according to The Nevada Independent.

A Townsite Solar 2 representative said the company is “aware of the stay order” and “respects” the administrative process, and that it will “continue coordinating with the BLM, Boulder City, regional partners, and community members as the project advances,” The Nevada Independent reported. Townsite Solar 2 is backed by Skylar Capital Management, a Houston-based investment firm, according to the same report.

The Bureau of Land Management had not issued a public response to the stay as of September 1.