Updated September 7, 2026 at 9:51 am ET
A federal appeals board halted a 167 MW data center approved for construction on U.S. Bureau of Land Management property on Sept. 1 after finding the agency likely violated environmental law by relying on a review prepared for a previously approved but materially different project to authorize the development.
BLM approved the Townsite data center near Boulder City, Nev., in June without preparing a new or revised environmental assessment, instead relying on its 2023 review of an unbuilt 19 MW solar project proposed for the same site. Boulder City, the Center for Biological Diversity and the Sierra Club appealed the decision.
The stay comes as the Trump administration pushes federal agencies to speed up construction of large data centers and support energy infrastructure on federal land.
Townsite’s May federal filing scheduled construction for the first quarter of 2027 while still outlining the geotechnical investigation needed before construction and leaving the building’s final dimensions and other key details unresolved. No general contractor or EPC contractor has been publicly identified for the project.
Developer Townsite Solar 2 LLC is majority-controlled by TS2 Investments LLC, a subsidiary of Houston-based Skylar Opportunities LLC. Federal documents identify Arevon Energy as a partner in the parent company of Townsite Solar 2. In an email to ENR, Arevon said Skylar controls the company, leads its development and permitting strategy and has pursued the conversion of solar power to a data center. Houston-based Overwatch Capital joined the effort in November 2025 to help develop the facility and secure rights, power and water.
ENR previously reported that Arevon and Rosendin delivered the upcoming $250 million Townsite Solar project.
Federal documents describe the data center as representing about $3 billion in planned capital investment, including buildings, computer equipment and supporting infrastructure. The municipality has not identified a separate construction cost.
BLM documents show four planned data center buildings, a 70 MW battery energy storage system, a power substation and 167 MW of standby generation connected to 230 kV transmission infrastructure.
Townsite had advanced a long-standing power purchase before seeking approval for the federal site. In a March filing for a related data center proposal on adjacent land owned by the city of Boulder, the developer said a main transformer and high-voltage circuit breakers had been ordered. The May federal plan called for commissioning and testing in late 2027 and commercial operation in the second quarter of 2028.
Repurposed solar project review
The federal development originated with BLM’s 2023 right-of-way authorization for a 19 MW solar PV installation and up to 35 MW battery storage system that was never built. Townsite later moved into data centers “in part because the market for solar projects has deteriorated,” according to its argument summarized by the appeals board.
Townsite Solar’s $250 million solar project completed near Boulder City combines a 180 MW solar array with 90 MW of battery storage. It is separate from the unbuilt solar project whose environmental review BLM reused for the planned data center.
Image courtesy of Arevon Energy
BLM responded to the replacement proposal with a NEPA adequacy determination, or ADN, and concluded that the previous analysis met the review requirements of the National Environmental Policy Act. The agency called the developments “essentially similar,” noting they would occupy “exactly the same location, floor area and perimeter,” and described both as industrial uses involving technologies “predominantly electrical in nature and solid state.”
BLM also cited the same utility corridor, access roads and construction footprints, saying both would involve “12 to 18 months of construction time with similar equipment and vehicles.”
The Interior Land Appeals Board found that the challengers would likely succeed in their NEPA claim. Administrative Judge David Gunter said no cases cited had upheld the use of a DNA for projects “as different as a data center and a solar plant.” Courts had rejected the approach even when the projects shared more similarities, he wrote.
BLM’s own analysis exposed another problem. The agency analyzed data center-specific cooling emissions, visual impacts and potential effects on wildlife to demonstrate that the previous solar review was sufficient. Gunter said he “gets the analysis backwards.”
Construction differences were also blurred. The solar assessment estimated about 12 months of construction. BLM estimated up to 18 months for the data center, then grouped them into “12-18 month construction times.”
That wording “masks the potential for a 50 percent increase in the duration of construction impacts,” including noise, dust, emissions and traffic, Gunter wrote. He later narrowed the dispute down to a simpler point: “Enforcement of NEPA requires ‘common sense.'” A 300,000-square-meter data center, he wrote, “is a different project than a 19 MW solar power generation facility.”
Federal Push Meets NEPA Review
The proposed Townsite Solar 2 site, highlighted in red, is on BLM-managed land north of the completed Townsite Solar project. BLM later approved the same federal site for the city’s 167 MW data center.
Courtesy Bureau of Land Management
President Donald Trump’s July 2025 executive order directs agencies to expedite permitting for data centers and supporting energy infrastructure and make federal land available for development. Defines qualifying projects to include data centers with more than 100 MW of incremental electrical load.
BLM invoked the policy to approve Townsite, saying the development “supports federal efforts to expedite permitting for data center infrastructure.” The board found that any financial damage from delay could be limited through an expedited appeal, while construction could permanently alter the site.
Townsite said it will participate in the appeal and “conduct a comprehensive environmental review” of construction impacts, water use, biological resources and operating systems.
ENR sought clarification on whether the stay prevents all work authorized by its June decision and whether the agency will defend that decision on appeal, but did not receive a response from BLM by press time.
The stay does not cancel the approval. BLM must submit the administrative file by September 21, with an expedited merits briefing to follow.
This story has been updated to clarify Arevon Energy’s role in Townsite Solar 2 after the company provided additional information about the company’s ownership and development responsibilities.
