TUCSON — The Tucson City Council voted in August 2025 against acquiring land or providing water and power for Beale Infrastructure's Project Blue data center development near Tucson.

Beale Infrastructure, a San Francisco-based company owned by New York investment management company Blue Owl, had requested the city of Tucson to acquire 290 acres of land outside city limits for Project Blue. Project Blue consists of a $3.6 billion data center development on the southeast edge of Tucson and a separate $5 billion project in the town of Marana. The Marana site spans 600 acres, including land owned by the Mormon church and a family trust associated with city council member Herb Kai.

Lisa Shipek, co-executive director of the Watershed Management Group, noted the region's climate. "We are in the middle of a 30-year drought, which is now an extreme drought," Shipek said. The Colorado River, which supplies much of Tucson's water via the Central Arizona Project canal system, has experienced a 20% drop in flows since 2000 compared to 20th-century levels. Tucson also recorded its warmest weather in 125 years during July and August of the previous year.

Lee Ziesche, an activist with the Democratic Socialists of America, also commented on potential effects. "Project Blue could lead to higher temperatures and higher rates because of the heat island effect of the air conditioners and higher rates for power," Ziesche said. In 2023, Tucson Electric Power (TEP) increased rates by 10%, and in June 2025, TEP proposed a 14% rate hike for grid upgrades from the previous year. A study published in May found that temperatures rose by up to 2.2 degrees Fahrenheit (1.22 degrees Celsius) downwind from data centers in the Phoenix area.

After being denied access to Tucson's water supply, Beale Infrastructure decided to cool Project Blue servers with air conditioners and implement a closed-loop water system. Beale executives had projected that Project Blue would create several thousand construction jobs and hundreds of permanent positions, along with generating nearly $250 million in taxes for the city, county, and state over the first decade. Despite the Tucson City Council's decision, Project Blue, specifically the development in an unincorporated part of Pima County, was approved for construction in December 2025.