Tucson City Council Abrogates Blue Data Center Venture
The ambitious Project Blue Data Center, planned for Tucson, Arizona, has been canceled due to public concerns over water usage. Despite the project developers’ commitments to be water positive and invest in new water sources, strong public opposition fearing unsustainable water consumption led to the project's demise.
The project, led by Humphrey's Peak Properties, LLC and developed by Beale Infrastructure, promised to bring significant economic benefits. With a planned investment of $3.6 billion, Project Blue was set to create over 3,000 direct construction jobs and hundreds of millions in infrastructure expansion, including a reclaimed water system. The project was also expected to generate 180 permanent jobs by 2029, with an average salary of $64,000.
However, local residents voiced strong fears about the data center’s water demands, leading to public protests and calls for greater community input, including chants demanding a public vote. The Mayor and City Council ultimately decided to halt annexation efforts and negotiations related to Project Blue due to these concerns and the public pressure.
The planned Project Blue would have spanned 2.5 million sq. ft. across 10 buildings and become one of the largest electricity consumers on the Tucson Electric Power (TEP) grid. It also had a long-term energy agreement with TEP, supporting the utility company's clean energy goals, including solar and battery storage integration.
The Pima County Board of Supervisors had approved the Project Blue data center, and the timeline for construction to begin was late 2025 or early 2026, with the first data halls going live by 2027. These timelines are now defunct following the cancellation.
The developers of Project Blue did not seek local economic incentives. The cancellation of Project Blue highlights the challenge of balancing large-scale digital infrastructure development with local environmental and resource considerations.
This case is reminiscent of the recent cancellation of the Becker Minnesota data center project due to legislative changes. It underscores the critical importance of water issues for development projects in the region, emphasizing the need for developers to address community concerns and engage in meaningful dialogue with local residents.
[1] Tucson News Now. (2025, August 3). Tucson City Council votes to halt Project Blue data center. Retrieved from https://www.tucsonnewsnow.com/news/local-news/tucson-city-council-votes-to-halt-project-blue-data-center/
[2] Arizona Daily Star. (2025, August 3). Tucson City Council votes unanimously to halt Project Blue data center. Retrieved from https://tucson.com/news/local/tucson-city-council-votes-unanimously-to-halt-project-blue-data-center/article_c21f464c-888d-5c6a-8c6e-d92454f4a82e.html
[3] KGUN 9. (2025, August 3). Tucson City Council votes to halt Project Blue data center. Retrieved from https://www.kgun9.com/news/local-news/tucson-city-council-votes-to-halt-project-blue-data-center/
[4] Tucson Sentinel. (2025, August 3). Tucson City Council votes to halt Project Blue data center. Retrieved from https://tucsonsentinel.com/local-news/2025/08/03/tucson-city-council-votes-to-halt-project-blue-data-center/
- Despite the promised economic benefits, including the creation of thousands of construction jobs and infrastructure expansion, Project Blue's ambitious plans for water usage led to its cancellation due to public concerns and vocal opposition.
- The developers of Project Blue, Humphrey's Peak Properties, LLC, and Beale Infrastructure, opted not to seek local economic incentives, thereby missing an opportunity to potentially alleviate some public concerns about the project's potential impact.
- The cancellation of Project Blue serves as a stark reminder of the need for developers to address community concerns proactively, especially when it comes to sensitive environmental issues such as water consumption.
- In light of the recent cancellation of Project Blue, along with the previous cancellation of the Becker Minnesota data center project, it is evident that balancing large-scale digital infrastructure development with local environmental and resource considerations is a critical challenge for the technology industry and the financial sector.
