Federal Judge Halts Boulder City Data Center Construction on BLM Land

A Department of Interior administrative judge has ordered a stay on the construction of a data center on Bureau of Land Management (BLM) land near Boulder City, Nevada, following appeals from the city and environmental groups. The decision pauses all work on the project until the legal challenges are resolved, a process that could take years.

The ruling comes after the BLM approved the project in June, a decision that drew immediate opposition from Boulder City officials and conservation organizations, including the Sierra Club and the Center for Biological Diversity. Both parties filed appeals, arguing that the approval process violated federal environmental review requirements and that the project's scope was fundamentally misrepresented.

The data center, originally planned for city-owned land, was redesigned and relocated to BLM property outside Boulder City after the developers, Townsite Solar 2, withdrew their city application. The project, which was initially approved as a solar field farm in 2023, was later repurposed as a data center—a change that became a central point of contention in the judge's review.

In his written decision, Administrative Judge David Gunter rejected the developer's argument that a solar field and a data center are "substantially the same" land use. He noted that the two facilities have opposite relationships to the power grid: a solar field contributes energy, while a data center consumes it. Gunter also cited Boulder City's objection that "the installation of solar panels and modular battery storage units" is "vastly different from a high security data center complex consisting of four data center buildings totaling 300,000 square feet."

The judge further stated that while data center infrastructure is of "significant practical and economic importance" to the country, neither the developers nor the BLM had demonstrated that this particular project was essential to the national push for artificial intelligence infrastructure. He found that halting the project would not constitute a "major setback" to broader federal technology goals.

The proposed facility was designed to include 167 megawatts (MW) of data center capacity alongside 70 MW of battery storage. Townsite Solar 2 is owned by Skylar Capital Management, a Houston-based hedge fund management firm.

Olivia Tanager, president of the Sierra Club Toiyabe Chapter, called the pause a "huge win" for environmentalists and a significant setback for the developers. "We're thrilled," Tanager said. "Particularly given the precedent that this project could have set for how data centers could be constructed on public land."

The BLM declined to comment, citing the ongoing legal proceedings. In a statement to The Nevada Independent, Gaby Rodriguez, a representative for Townsite Solar 2, said the company was aware of the stay order and "respects" the administrative process. "The company will continue coordinating with the BLM, Boulder City, regional partners, and community members as the project advances," Rodriguez said. "TS2 believes that responsible development and environmental stewardship can work together to support long-term community benefits."

Boulder City spokesperson Lisa LaPlante said the city's appeal was based on multiple legal concerns, including the BLM's failure to follow the National Environmental Policy Act (NEPA) process and a lack of meaningful consultation with the city or adequate public input. "The City contends that the BLM did not consult with the City or provide adequate opportunity for public input on the approved data center, as required by federal law," LaPlante said.

The stay marks a notable legal precedent for data center development on public lands, a growing area of interest as technology companies seek large tracts of land for AI-related infrastructure. The case underscores the tension between federal efforts to accelerate digital infrastructure and local and environmental concerns over land use, grid impacts, and community oversight. The outcome of the appeals could shape how future data center projects on BLM land are reviewed and approved.