Federal Board Lets BLM Revisit Boulder City Data Center Approval After Finding Likely Environmental Law Violation

BOULDER CITY

There is a stretch of desert southwest of this city, out past the solar fields in the Eldorado Valley, where the federal government tried something it had never done: approve a large data center on public land. That experiment is now officially unwound. The Interior Board of Land Appeals has handed the Townsite project back to the Bureau of Land Management, granting the agency's own request to set aside the approval it issued in June, the Las Vegas Review-Journal reported.

The order, signed Thursday by Administrative Judges David Gunter and Clifford Stevens, follows the board's earlier determination that the June approval likely broke federal environmental law, according to the Review-Journal. The procedural posture is unusual: the BLM asked to lose its own decision rather than defend it, and Boulder City — which had appealed alongside the Center for Biological Diversity and the Sierra Club — opposed the handoff, preferring the board keep control. The practical effect is the same either way: the approval is void, construction stays frozen, and the next chapter gets written by the agency that wrote the flawed first one.

How a solar farm became a data center

The dispute turns on a substitution. The BLM approved the amended right-of-way for Townsite Solar 2 on June 26, 2026, converting land approved for an unbuilt 19-megawatt solar project into a 167-megawatt data center — without preparing a new environmental assessment, according to Engineering News-Record. Instead, the agency relied on its 2023 environmental review of the solar project and a 2026 Determination of NEPA Adequacy concluding the old review would do.

The neighborhood explains both the project's logic and its reception. The Eldorado Valley already hosts major solar generation — including the nearby Townsite Solar project, a $250 million facility delivered by Arevon Energy and Rosendin, according to Engineering News-Record — and the proposed data center would occupy roughly 81 acres within an 85- to 88.5-acre federal right-of-way about five miles southwest of downtown Boulder City, near that existing and proposed energy infrastructure. Developer Townsite Solar 2 LLC is majority controlled by TS2 Investments LLC, an affiliate of Houston-based Skylar Opportunities LLC, with Arevon Energy as a partner in the parent company and Houston-based Overwatch Capital joining in November 2025 to help develop the facility, ENR reported. Townsite's federal filings had scheduled construction for the first quarter of 2027, with geotechnical work and final building dimensions still unresolved and no general contractor publicly identified.

The appeal that stopped construction

Boulder City's council voted unanimously on July 14 to appeal the approval and filed on July 23; the Center for Biological Diversity and the Sierra Club filed their own appeals on July 27, according to the case record. On September 1, the Interior Board of Land Appeals granted a stay halting construction, finding the challengers likely to succeed on their argument that a data center and a solar farm are not substantially the same project.

The distinction matters because the impacts differ. "Solar projects primarily affect land disturbance, habitat and visual resources, while data centers involve additional considerations such as noise, backup power generation, water or cooling systems, and more frequent operational activity," BLM spokesperson Kirsten Manuszewski said in a statement reported by The Center Square. The Townsite developers say the facility would use closed-loop cooling rather than evaporative cooling, fund its own transmission line and buy wholesale power — claims that, critics argue, were never tested through a full public environmental review because the approval borrowed the solar project's paperwork.

"What happens here could set a precedent"

Both sides agree the case is bigger than one site outside Boulder City. "What happens here could set a precedent for how we manage public lands across the country, how we evaluate potential harms, and how projects like this get approved in the first place," Megan Ortiz, a Las Vegas-based staff attorney for the Center for Biological Diversity's Great Basin Program who helped draft the appeal, told The Center Square. The Sierra Club's Toiyabe chapter director, Olivia Tanager, said the organization does not support data center development on federal public land and wants the strictest guardrails possible.

The national stakes are heightened by the Trump administration's push to accelerate large data centers and supporting energy infrastructure on federal land, ENR reported — a push that has also drawn congressional scrutiny. On September 24, Representatives Jared Huffman and Dina Titus of Nevada and 13 other lawmakers sent Interior Secretary Doug Burgum 18 questions about data centers on public lands, including whether projects will receive full environmental reviews; as of mid-October, the lawmakers said no answers had been received.

For Boulder City — a community that controls its own growth tightly and originally pushed the project off city land onto the federal parcel, where opposition continued anyway — the board's order buys time but not victory. The BLM now reconsiders its approval; the stay remains the barrier between the current desert and any construction fence. What the agency produces on the second look, and whether it survives a second appeal, will likely become the template for every data center proposed on public land after it. More Southern Nevada land and water coverage is on the Previously news front, including today's water district bond decision on the Colorado River.

Sources: Las Vegas Review-Journal, October 19, 2026; Engineering News-Record, September 2026; The Center Square, October 2026; Interior Board of Land Appeals case record, 2026.