Giant $3.6B Data Center Initiative Given Green Light in Tucson, Arizona
In the heart of Tucson, Arizona, the proposed Project Blue Data Center, a $3.6 billion investment, was met with a unanimous rejection by the city council in August 2025. The rejection came after a series of deliberations surrounding the project's potential environmental impact, particularly its water and energy consumption.
Located at Tucson's Southeast Employment and Logistics Center near the Pima County Fairgrounds, Project Blue was poised to become one of the largest electricity consumers in the Tucson Electric Power grid, spanning 290 acres. The developers, San Francisco-based Humphrey's Peak Properties, LLC, and Beale Infrastructure, had committed to using 100% renewable reclaimed water and funding an 18-mile reclaimed water pipeline and a 30-acre aquifer recharge facility.
Despite these commitments, the project faced strong public opposition. Concerns about high water and electricity use in a desert environment, as well as distrust towards tech companies and questions about sustainability, were at the forefront of the debate. The project required the City of Tucson's annexation for water access, and the sale of the land was contingent on annexation at $20.8 million.
The project was expected to generate more than $3.6 billion in economic development, with approximately 3,000 construction jobs anticipated during the 2025–2028 multi-year build phase. Once operational, it aimed to create between 75 and 180 permanent full-time jobs by 2029, with average salaries around $64,000 per year. The data center would also contribute significant tax revenue to Tucson and Arizona over a 10-year period.
However, the city council prioritized environmental sustainability and community concerns over the projected economic benefits. The council voted unanimously to reject the project, ordering city staff to cease working with the developers and to develop new regulations for future data centers. The decision reflects a commitment to sustainable development, as Project Blue had pledged to be net water positive, matching 100% of its water consumption with investments in water conservation and replenishment projects.
In summary, while Project Blue promised substantial economic benefits, concerns about water consumption, energy demands, and long-term environmental impact led the Tucson City Council to block the project, emphasizing the city’s commitment to sustainable development. The initial investment includes $1.2 billion in construction and $2.4 billion in new equipment. Upon full buildout, Project Blue will consist of up to 10 buildings totaling 2.5 million square feet. The developers, Humphrey's Peak Properties, LLC, and Beale Infrastructure, will need to find alternative solutions to secure water access and continue their commitment to sustainable practices.
[1] Tucson Sentinel. (2025). Tucson City Council Rejects Project Blue Data Center. Retrieved from https://tucsonsentinel.com/news/local/tucson-city-council-rejects-project-blue-data-center/
[2] Arizona Daily Star. (2025). Tucson City Council Rejects Project Blue Data Center Proposal. Retrieved from https://tucson.com/news/local/tucson-city-council-rejects-project-blue-data-center-proposal/article_d3c8749c-9eb9-5113-80a4-6b44e2a2e2f0.html
[3] KGUN9. (2025). Tucson City Council Vote to Reject Project Blue Data Center. Retrieved from https://www.kgun9.com/news/local-news/tucson-city-council-vote-to-reject-project-blue-data-center/
[4] Tucson Business News. (2025). Project Blue Data Center: Economic and Environmental Impacts. Retrieved from https://tucsonbusinessnews.com/2025/08/project-blue-data-center-economic-and-environmental-impacts/
[5] Environmental Defense Fund. (2025). Tucson City Council Rejects Project Blue Data Center: A Step Towards Sustainable Development. Retrieved from https://www.edf.org/news/tucson-city-council-rejects-project-blue-data-center-step-towards-sustainable-development
[1] With an estimated $1.2 billion for construction and $2.4 billion for new equipment, the proposed Project Blue Data Center in Tucson, Arizona, showcased a significant infrastructure investment in technology.
[2] Despite commitments to use 100% renewable reclaimed water and sustainable practices, public opposition toward Project Blue highlighted concerns about its environmental impact, particularly its data-and-cloud-computing footprint and energy demands in a desert environment.
