Federal appeals board halts first data center approved on public land

A federal appeals board has temporarily halted construction of what is believed to be the first data center ever approved on land managed by the Bureau of Land Management, ruling that the agency likely violated federal environmental law when it approved the project without a new environmental review.

In a September 1 order, the Interior Board of Land Appeals granted a stay in a consolidated case brought by Boulder City, Nevada, the Center for Biological Diversity and the Sierra Club. The board found that appellants “made a persuasive showing that BLM violated NEPA and acted arbitrarily or capriciously” when it determined that a proposed data center was “substantially the same” as a solar power plant the agency had already reviewed on the same site, southwest of downtown Boulder City.

The BLM granted a right-of-way for the site’s original developer, Townsite Solar 2 LLC, to build an 80-acre solar plant and battery storage system on the parcel in September 2023, following a standard environmental review. In a June 26, 2026 decision, the agency allowed the developer, Skylar Energy Resources, operating through the same Townsite Solar 2 subsidiary, to convert the project into a 167-megawatt data center, without a new environmental review or public comment period, on the grounds that the two projects would have similar impacts.

The board rejected that reasoning, ruling that a data center is not “substantially the same” as a solar plant simply because both are industrial uses with similar construction timelines. The underlying environmental review for the original solar project had assessed impacts on the desert tortoise, a species protected under the Endangered Species Act, among other concerns tied specifically to a solar and battery facility rather than a data center’s continuous power draw and cooling needs.

“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. Olivia Tanager, director of the Sierra Club’s Toiyabe Chapter, called the ruling “a victory for democracy, public participation and the principle that our public lands should serve the public.” Boulder City resident Brynn deLorimier, who joined the appeal, said, “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 is temporary. The board’s order directs BLM to file the administrative record and propose a merits briefing schedule by September 21, and construction remains paused while the case proceeds.

Boulder City officials say the BLM gave them no chance to weigh in before approving the conversion. “We’ve had no conversations, there’s been no chance for the community or for the city to provide any input to the federal government,” Boulder City spokesperson Lisa LaPlante told E&E News. City council member Steve Walton called the BLM’s decision “ridiculous” at a public meeting before the council voted to appeal. The dispute follows a 2025 executive order from President Trump directing federal agencies to speed the construction of artificial intelligence infrastructure on federal land; the administration is separately working to place more data centers on federal property, including Department of Energy sites and military installations, according to E&E News.