A newly proposed data center that would be built on public land near Boulder City, Nevada, just hit a roadblock. On Sept. 1 a judge placed a hold on the project’s permit with the justification that the initial permit issued in 2023 was meant for a solar power plant.
The stay, granted by administrative judge David Gunter, halts data center development by Townsite Solar 2, LLC. The company originally planned to build a solar power plant with battery storage on Bureau of Land Management ground about 5 miles southwest of Boulder City. That project was federally approved in 2023 after public meetings and an environmental assessment, which is required under the National Environmental Policy Act.
The judge stated that there was evidence the BLM “acted arbitrarily or capriciously when it determined that the data center project is ‘substantially the same’ as the solar plant project for purposes of its NEPA analysis.”
In 2025, Townsite returned to BLM with an amended project requesting use of the acreage for an AI data center instead. BLM approved the amended request in July citing similar use as reason enough for not requiring another environmental assessment. Those opposing the amendment say a data center is not similar to a solar farm.
“The two are vastly different,” said Nevada Rep. Dina Titus. “I’ve said since day one that this was not only improper, but illegal.”
While they function differently, there is a connection between solar and data. Solar farms can produce the power that AI data centers need to operate. Building the two next to each other cuts grid transmission out of the mix for energy transfers. Reducing transmission distance is a plus because the increasing amount of power required for data centers puts a strain on rural utility services.
The proposed AI data center would require approximately 900,000 gallons of water during construction, according to the Nevada Current. The data center is also expected to consume more electricity annually than Boulder City itself consumes, according to an August report by Field & Stream.
“Rural communities are becoming the nexus of a national data center build-out that is moving fast and creating high pressure decisions regarding land use, fiscal policy, workforce development and resource management for local leaders and communities,” concluded researchers Anthony F. Pipa and Adam Aley in their 2026 Brookings Institution report for America’s Rural Future virtual symposium.
Townsite was also in negotiations with Boulder City for an 88.5-acre city-owned parcel adjacent to the federal public land in question. But Boulder City’s planning commission voted unanimously against constructing the data center on city land, according to the Current.
The city estimated an initial minimum lease value of $1.47 million for the data center on city-owned land before the company pulled its request and pursued the public-land project through the federal government, which is now on hold.
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“The judge ruled for transparency and public accountability in granting a stay based on BLM’s misuse of an environmental impact statement for a solar farm as justification for a data center,” Titus said.
If built, Townsite would be the first data center built on public land managed by BLM on behalf of all Americans. It could also set a precedent for public land in other Western states. The BLM has until Sept. 21 to respond to the order issued by the Interior Board of Land Appeals.
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