Project Blue is back: Plans to build a controversial data center near Tucson move ahead

Beale Infrastructure confirmed Tuesday it is pushing ahead to build a massive data center in Pima County — even after Tucson blocked water access and hundreds of residents rallied against the controversial project.

The company and Tucson Electric Power have filed a special agreement request with state regulators to lock in energy for the first phase of the project, while questions about water and community opposition remain unresolved. 

The application, filed Aug. 25 with the Arizona Corporation Commission, outlines plans for Tucson Electric Power to begin supplying energy to the center in May 2027. 

“Beale is developing a data center campus on a 290-acre parcel located in Pima County,” the agreement request reads.

Beale confirmed to Arizona Luminaria on Aug. 26 that the company remains committed to building on the land purchased from Pima County in June, but did not respond to a question about how it would access water for the data center. 

“Beale is actively pursuing community partnerships, advancing clean energy strategies, and evaluating digital infrastructure investment opportunities nationwide,” according to a statement from Beale sent to Arizona Luminaria. “In Southern Arizona, where demand is rising, Beale Infrastructure remains committed to meeting that need responsibly and sustainably. As part of that process we have engaged with TEP to provide clean energy supply for the project.” 

The proposed massive data center was one of the largest development projects ever to be considered by the city or county, which, critics warned, would have been an unprecedented drain on Tucson’s water, energy and natural environment. Hundreds of residents attended informational meetings, carrying signs and voicing opposition to the project 

The Pima County Board of Supervisors voted in June to sell 290-acres of land near Houghton Road to the developer, but the project depended on the city of Tucson to annex the property to supply the massive amounts of water needed to run the proposed data center. 

A crowd attended a community meeting about a proposed data center at the Tucson Convention Center on Monday, Aug. 4, 2025.

After fierce public opposition, the Tucson city council voted to end negotiations over the annexation in August. A large crowd cheered in the city council chambers when the vote to reject annexation was taken. And yet, according to the recent application, Beale is moving ahead with a data center just outside Tucson city limits. 

One of the key questions was water access. Project Blue said it would need several years of potable water, but then promised to build a reclaimed water pipeline to the land. Since Tucson ended its negotiations on the data center in August, the city council has passed an ordinance that would require large water users like data centers to submit a special application, which includes a city council review, to access Tucson water resources.

Another major concern was how TEP would meet the center’s significant energy demand without shifting costs to residential consumers. Earlier this year, the company asked for a 14% rate hike.

The application to the Arizona Corporation Commission says TEP will provide 286 megawatts of capacity by 2028. The agreement is in the public interest, the application argues, because it protects other local power users from cost or reliability impacts. That includes a 10-year agreement with minimum monthly billing requirements, a provision that requires multiple years of notice before the agreement is terminated and a gradual increase in energy load over 18 months.   

“Importantly, TEP plans to provide service under the ESA with existing and planned resources,” the application says. “The Customer's revenue contributions towards TEP's fixed system costs provides rate affordability benefits to all customers.” 

TEP was required to meet the needs of businesses in the area, including the new data center, said spokesperson Joseph Barrios in a statement to Arizona Luminaria. “TEP has an obligation to serve new customers within our service territory,” he said. 

Pima County supervisor Andrés Cano posted on Instagram about the application on Aug. 25, sharing his concern about the project moving ahead despite many community members coming out against the data center. 

“We are requesting more information immediately,” Cano said in his post. “Make no mistake: this filing is designed to bypass our community’s will and lock in power for a project that has already been rejected at the local level.” 

Relocating Clay Target Center 

Plans to relocate a clay target center near the site could also give insight into the future of Project Blue. 

According to a statement on the county website, the clay target center, which is used for sport shooting, will be relocated at the cost of Beale Infrastructure. 

“On June 17, 2025, the Pima County Board of Supervisors approved a sale agreement with Beale Infrastructure to develop a technology campus north of the Pima County Fairgrounds, which will impact the South East Regional Park’s Clay Target Center (CTC),” says a statement on the county Clay Target shooting website. “As part of the contract, Beale will design, relocate, and construct a new CTC. There is no official closing date for the CTC facility at this time. Please continue to check this website for future updates.”

The county is still studying when and where the clay target center may move, as well as what costs may be incurred.  

According to the original sale contract, those costs should be covered by the purchaser of the land, which is Humphrey’s Peak Properties, the same company named on development documents made public by the city of Tucson.

“Pima County is conducting a study on relocation options. The study, and any relocation, are funded by the buyer. The cost for moving will be determined through the study,” Deputy Pima County Administrator Carmine DeBonis Jr. told Arizona Luminaria.

“The Pima County Trap & Skeet Facility currently located on the Property and managed by the Parks Department will need to be relocated as part of the project, with the total expense for the relocation of the facility being paid for by the Purchaser,” according to the county’s purchase sale agreement with Humphrey's Peak Properties. The company would also be on the hook for the lost revenue of the shooting facility. 

The cost of that could be up to $6.5 million dollars, according to the document. 

Project Blue property sale not closed 

Even after the Pima County Board of Supervisors approved a sale agreement with Humphrey’s Peak on June 17, the sale of the property has not been finalized as of Aug. 25, according to DeBonis. 

A document obtained by Arizona Luminaria lists five potential expansion phases for the data center, while only three were proposed to the public.

The document also shows other locations the developer considered as recently as March 2023. Two of the sites are owned by private developers. The third, very near the publicly proposed site, is owned by the State of Arizona.

This article first appeared on AZ Luminaria and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.