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The local government of Boulder City, Nevada had previously rejected a proposal for the computing facility, which would draw power from the existing electricity supply.

The U.S. government for the first time approved a data center on federal lands. What the Trump administration is pitching as a demonstration of bureaucratic speed and ambition in the era of artificial intelligence, however, is turning into the same sort of mysterious backroom deal that’s upsetting other communities.
On Monday, the Bureau of Land Management announced that it would allow a large AI data center to be built on a plot of federal land technically within the limits of Boulder City, Nevada. The approval was initially granted as a right-of-way in 2023 for the second phase of a solar project known as Townsite Solar, to be built by a joint venture between Skylar Opportunities LLC, a subsidiary of Houston energy trader Bill Perkins’ investment firm, and renewables developer Arevon. (Ironically, Perkins also just launched an ETF to profit from higher electricity demand.)
Earlier this year, the LLC overseeing the project — itself named Townsite Solar 2 — notified the city that it would change tack and instead construct a large data center on the site. There would be no new power generation installed — rather, the facility would hook up directly to an existing substation. This time, the backlash was immediate and fierce, and led Boulder City’s planning commission to reject the data center within city limits.
Quietly, Townsite Solar 2 had prepared a backup plan: The project would shift to federal land that was already approved to use for the second phase of the solar farm. It wasn’t until early July that the Boulder City government and its residents learned that BLM had given Townsite Solar 2 permission to advance the data center without any new public hearings or comment periods. According to BLM, the data center would be essentially like a solar farm, so it wouldn’t require any new review.
“The BLM concluded that the new proposed action — a data center — is essentially the same,” city government attorney Brittany Walker told the Boulder City council at a July 14 public hearing. “This is a departure from previous precedent and procedure as the BLM essentially sweepingly approved a new land use without following processes in federal law.”
Boulder City is now fighting the federal assessment. Walker claimed at the July 14 hearing they weren’t notified ahead of time that Townsite Solar 2 would be so quickly approved and built on this parcel of federal acreage, a form of government-to-government communication often required under federal land use planning statutes.
Mystery continues to swirl around what BLM did here — and how Townsite Solar 2 got the agency to do it.
Nada Culver, who served as No. 2 at BLM under the Biden administration, told me that BLM had veered from the usual course of business in approving this data center. Consulting local governments before a decision is made “sits at the heart” of the Federal Land Management and Policy Act, which is the primary statute governing BLM’s land use decision-making, she said. Both that law and the National Environmental Policy Act are “supposed to involve the government actually looking at environmental impacts and sharing them. so it’s not responsible or arguably even legal for the BLM to say, ‘We aren’t going to look at those impacts or share them with the public,” she added.
Boulder City officials have said this is the first major data center approval on federal lands, to their knowledge. Culver told me she believed that to be true, and hadn’t heard of such a thing happening before. “This isn’t a niche BLM issue, so to try and say this is just another use when we’re all surrounded with this loud discussion at the national level about data centers is particularly stark.”
Patrick Donnelly of the Center for Biological Diversity told me his organization and the Sierra Club, another legacy conservation group, are planning a separate legal challenge, one they say is intended to stop more such swaps from happening. Donnelly noted that at least two more data center projects — both powered by on-site gas — are poised to start the federal permitting process at any moment, according to the BLM’s online materials.
“This is the first one, and it’s going to set the stage for these things on public lands, and we can’t let this happen,” he told me.
The timing of this fight couldn’t be worse for the Trump White House, as officials try to pivot towards a “feel your pain” message ahead of the 2026 midterm elections. On Thursday, utilities and data center developers joined Trump cabinet officials at the Environmental Protection Agency for a joint event promoting the administration’s Ratepayer Protection Pledge, a voluntary set of industry practices geared toward ensuring the cost of AI infrastructure isn’t borne by those living near it.
With the BLM’s decision to advance the data center on federal land, Boulder City will lose an estimated $2.3 million in annual leasing and taxation revenue that it would’ve received if the project were built on city land, according to the Las Vegas Review-Journal. If the project is built on BLM land, Boulder City officials have said they’ll still be forced to front the cost for water and sewage hookup to the facility, as well as road maintenance.
Townsite Solar 2 told me in an unattributed statement that it wants Boulder City “to receive the greatest possible revenue and contribution benefits from the project, regardless of siting on federally-owned or city-owned land.”
“TS2 wants the project to provide meaningful, measurable benefits for Boulder City residents, local businesses, and the broader community. Our goal is to develop a responsible, sustainable project that Boulder City can be proud of and that can serve as a national model.”
The people I talked to for this story were largely flummoxed at BLM’s determination that the data center would be “essentially like” the solar farm that was approved in 2023. “These are two unrelated projects,” Culver told me. “I find it very hard to see how this would not trigger the need for a new analysis or public engagement.”
BLM’s logic made my head hurt, too. Among other things, the agency said “both proposals will use the exact same location, same acreage, and same perimeter,” and “both are proposals for industrial uses that will operationalize cutting-edge technologies that are predominantly electrical and solid state in nature.” The agency also claimed the data center was just like the solar farm because construction would take approximately the same amount of time, and would involve facilities and changes that “are visually geometric and less than 30 feet in height.”
You could describe a data center this way, but you could also describe any other number of things this way: a grocery store, a factory, a rollercoaster.
When I asked BLM for comment, a spokesperson simply sent me back the text used in the press release announcing Townsite Solar 2’s data center approval. A press representative for Townsite Solar 2 declined to provide details about who handled government affairs for the data center project, except to say that it hadn’t hired any federal lobbyists.
Some of Trump’s loudest critics told me they think this deal happened because Arevon, a joint partner described as a key financier in the project’s application with Boulder City, hired lobbyists with the Bernhardt Group, a government relations firm created last year by former Trump Interior Secretary David Bernhardt. Arevon hired the firm around the same time Townsite Solar 2 initiated the process to use the federal land for the data center, according to federal disclosures.
I have a history with Bernhardt. After leaving the Trump administration in 2021, Bernhardt went on to run the Trumpworld think tank America First Policy Institute and released a tell-all book, You Report to Me, that called for the bureaucracy to stand down against — as he put it to me — “the interests of the executive.” (I interviewed him around the time of its publication, after which he gave me an unsolicited copy of the book that I keep at my bedside as a form of dark humor.)
These days Bernhardt’s firm represents oil interests, including energy companies, mining, and large-scale agricultural interests that use lots of water (think: almonds). But it’s also pitching itself to the AI energy commentariat. In May, the former Interior secretary authored an op-ed in The Washington Examiner calling for rapid investment in U.S. artificial intelligence infrastructure. He then took to right-wing TV network Newsmax to promote the column, arguing that people fighting to stop data centers were just trying to “oppose the president’s vision for energy dominance.”
It would be easy to point at these federal disclosures and online comments and claim this bizarre data center land use swap is the work of a familiar Trump-era boogeyan. Except Arevon was effusive to me in saying that is not what happened here. In a statement, the company said that it’s a passive member of the joint venture, holds less than 25% ownership stake, and has “not directly hired consultants or lobbyists for this project.”
After publication of this story, the Bernhardt Group sent me an on-the-record statement saying that its firm had no involvement in the Townsite Solar 2 project. Arevon did not engage Bernhardt in connection with Townsite Solar 2, the statement said, nor did the firm have any knowledge of the project until I contacted it for this story.
I didn’t get a response from Overwatch, a data center engineering and design firm contracted to help with the project. Overwatch does have a director of government affairs, but their hire was announced months after the application would have been submitted to BLM.
This leaves us sleuths to conclude the likeliest reason this happened is also the most obvious one: Trump just wants data centers on federal lands, and this was a way to make that happen. What happens next will have enormous implications for the future of data center development and federal land use in the United States, especially if more companies facing federal permit stonewalling seek to turn their solar farm permits into permission to build AI infrastructure.
Editor’s note: This story has been updated to include a statement from the Bernhardt Group.
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1. Suffolk County, New York – Rarely do I get to say battery fire fears can be quelched but we have a very good example brewing in the Empire State.
2. Loudon County, Virginia – I can’t believe it: Data Center Alley is going to enact a moratorium.
3. Pulaski County, Arkansas – Entergy has dropped the lawsuit it filed against an Arkansas newspaper over the publication of a power deal with Google.
4. Darlington County, South Carolina – We conclude this week’s Hotspots with a focus on a GOP-leaning county rejecting a renewables moratorium.
A conversation with Sam Lyman of the Bitcoin Policy Institute.
This week’s conversation is with Sam Lyman, head of research at the Bitcoin Policy Institute. Originally focused on cryptocurrency, Lyman’s organization has expanded to policy and messaging development around data centers, most notably providing research many AI boosters cite to claim foreign influence is driving opposition to new hyperscale projects. Last week, the think tank released a new report calling for a novel solution to the data center permitting bottleneck: direct cash payments from data center projects to individuals involved with building them, as well as residents nearby facilities once they’re operating.
I reached out to BPI and asked for a chat with Lyman about the data center dividend proposal. I also tried to get to the bottom of where this increasingly relevant think tank stands on the general idea of a national data center law. The conversation was immensely informative. So here it is, in a lightly abridged and edited format.
Let’s start with the data center dividend proposal. Walk my readers through it.
Data center dividends came from the idea that, ideally in the AI revolution, we want all Americans to benefit. Especially rural Americans. You look at the landscape today, the majority of AI data centers are being built in rural America. It’s critical they’ll benefit from the massive wealth AI will unlock.
There’s lots of ways to make that happen. People point to the jobs AI data centers will build out, for example. But with data center dividends, we take the logic of the Alaska Permanent Fund and we apply it to America’s rural counties, which are sitting on a proverbial gold mine right now but lack any kind of public mechanism allowing them to benefit from that in a maximal way.
If you look at the tax revenue these data centers create, which is astronomical, how do we distribute this tax revenue in a way where it has the most tangible impact on the families living there? We believe data center dividends are the best way to do that – after allocating money for schools, public safety, and infrastructure, it allows these counties with tens of millions of dollars left over to distribute them as they see fit. They should distribute that money to the men and women who make those data centers happen in the first place.
The most effective form of a dividend would take a direct payment: a cash payment, a physical check, a direct deposit. Or the form of credits paying back property taxes, utility bills, an endowment for scholarships. There’s a number of different forms this can take.
Hopefully this gets the conversation going about how we can make these work for everybody.
Who do you want to see set up this dividend mechanism? How’s your approach to implementation?
The report is addressed to county commissioners. I’m thinking of commissioners who represent both sides of the political spectrum facing this huge backlash. Many of them want to do good by their communities and their voters, even if it means doing a data center, in places where it’s difficult to explain right now. Dividends make this indisputably clear.
I tried to put myself in the shoes of an enterprising county commissioner who sees the merits in the data center buildout and wants to break out of the political storm. It’s important to note data centers can be a huge economic boon for communities, in ways that can impact lives positively.
Have any communities – counties, as you noted – taken this idea up yet? Are there any models for this proposal?
The best analogue is West Feliciana, Louisiana, which is the case study we feature. West Feliciana made an agreement with a data center developer where in lieu of taxes, they make direct payments of about $90 million a year to the parish. That triples the community’s tax budget every year. It leaves ample room not only for essential services but dividends afterwards. Louisiana then passed a law – Act 434 – that allowed West Feliciana to remit some of those payments to residents as a tax credit. This bill first provided the opportunity for the parish to even remit those payments as cash, but it was changed in the legislature to make it a credit. That’s the closest we’ve gotten so far.
As far as reaching out to individual counties, we’re a think tank. We put ideas into the universe. We haven’t had anyone reach out to us since the publication of the report so far but we’re hoping they will.
Your report does lay out how there’s a bottleneck in development and this could help with easing it. Do you see an impetus to put ideas like the dividend out there right now, in light of the increased data center scrutiny in this year’s midterms?
Our publication is irrespective of the midterms. But it is tied to the fact that a bottleneck facing the data center buildout includes it becoming a politicized issue. We’re of the belief these projects shouldn't be political at all. One way to break through the noise is by showing how they can benefit those involved in construction and residents who live there. Data centers are critical infrastructure; other forms of critical infrastructure aren’t being politicized. Our efforts are to demonstrate how these shouldn’t be political.
When it comes to the future of AI data center regulation, this proposal is obviously geared towards incentivizing a resolution to the bottleneck through using resources produced from data centers – namely, new investment.
Where does your organization stand on the increased push for environmental or siting regulation on AI data centers?
I’m not familiar with what you might be referring to there.
I mean, there’s all kinds of proposals at the federal level and in states for everything from being required to pay for infrastructure upgrades to being required to use closed-loop cooling to siting restrictions, like temporary moratoria.
What I’m asking is, what else do you as an organization believe when it comes to regulating AI data center development at the federal level? State level?
We believe data centers should work for the communities where they’re being built. That’s important. So the concept of BYOP – Bring Your Own Power – we very much support that idea. We think the Ratepayer Protection Pledge is a great proposal because ultimately we want data centers, with them being critical infrastructure, to not only strengthen our national security but strengthen the communities where they’re being built.
Some states are rejecting data centers. We think that’s a mistake because it's something that’ll ultimately short-change the people who live there. For the states that do decide to build data centers, it's up to them what regulations make data centers more sustainable over time.
There’s increased public discussion for policy on AI development – as an organization, do you see any role in the federal government making policy here with a national data center law?
We think AI will be key to America’s prosperity over the long-term. We have concerns about the regulation of open-source artificial intelligence; bitcoin is a form of open-source software and open-source money. We believe intelligence should be something available to all Americans. That’s our concern with talk about regulating AI right now, it feels like a ploy for regulatory capture.
But what about national policy on AI data centers? Does your think tank support the national legislature doing a federal data center bill or is that something best for localities or states?
It depends on the bill. Are you talking about Sen. Bernie Sanders’ national moratorium?
The administration told a federal court that it has a “new analytical methodology,” hence the continued delays.
A federal judge ruled in early August that the Trump administration’s freeze on vertical height clearances for wind turbines was likely illegal. More than a month later nearly all of the wind energy projects remain on pause, as federal officials add new red tape that industry representatives say runs afoul of the court’s edict.
Let’s catch-up quickly on the American wind sector’s existential dilemma: the federal government has control over airspace higher than 200 feet from the ground and wind farm turbines essentially always enter that sphere of control. For at least a year and a half, the Trump administration through the Department of Defense and the Federal Aviation Administration has slowly gummed up what industry and former government officials have said was once a rote, benign bureaucratic process for ensuring turbine rotation didn’t interfere with flight patterns or radar at nearby airports.
So, Trump is delaying key approvals even for wind projects on private land, a worst-case scenario for the industry during his presidency. With support from their respective trade groups, many project developers sued and in August won a preliminary injunction against this de-facto national wind energy freeze. The court ruling said federal law laid out clear deadlines for completing these airspace reviews and the administration was willfully missing them.
“[In] light of DoD’s review freeze that started a year ago and still has no end in sight, the wind developers would naturally look to the same deadlines for relief,” U.S. District Judge Karin Immergut wrote, stating the administration’s pause violated the Administrative Procedures Act. Immergut also said the Trump administration potentially violated the law by reviewing projects under a new national security “methodology” that was defined by Congress.
But on Thursday, in its first update to the court since the ruling, the Justice Department laid out how essentially all projects remain at a standstill because they were adopting a new kind of comprehensive review process.
The administration claimed that “as a matter of policy” it had “resumed processing wind energy project applications,” but it only described a single instance where a company had heard from the military about moving forward. In addition, that company as well as all others affected by the freeze would still face a “new analytical methodology” for federal agencies reviewing height clearances for all projects, which appears to fly in the face of the ruling. The Justice Department did not provide any more detail about the methodology in its status update to the court.
Nicole Hughes, executive director of lead plaintiff Renewable Northwest, asserted in an interview Tuesday that the agency isn’t complying with the court order. “It appears to me they’re still stalling,” Hughes told me, adding the federal government’s reluctance to proceed is creating “a pretty high risk” for developers of any new wind projects in the United States. She said if nothing changes in the short term, they’re going to “have to go back to the judge and ask for further clarification as to what it means to comply with this order.”
“The lack of compliance by the administration does put into question the credibility [of the courts] and what pieces hold their feet to the fire? What remedies do we have? There’s never been a time an administration flaunts a judge’s orders the way the administration is.”
The Justice Department status update described a multitude of wind energy projects impacted by the freeze. At least 30 projects apparently already signed deals proposed by the military to mitigate radar impacts and were awaiting a counter-signature from the Department of Defense (which Trump calls the Department of War or DoW). Those previous legal agreements are now at risk of being thrown out, according to the Justice Department filing. The new pathway forward for them apparently is: “DoW will either (i) provide a notice that the project presents an unacceptable risk to national security, (ii) re-engage in negotiations with the developer to attempt to ameliorate any unacceptable risks, or (iii) circulate to the project proponent [a] new model mitigation agreement.”
At least 110 projects were in the middle of discussions with the federal government about mitigating airspace impacts when the injunction came down, according to the DOJ filing, which says none of them have heard from officials since the injunction. “As of this filing, developer re-engagements have yet to begin because such discussions need to be informed by the analytical results. Given the number of projects in this category, DoW has been assessing how to resume review and engagement with the developers.”
The DOJ said another 50 projects awaiting initial meetings with the federal government about airspace risk will begin once the administration “finishes with those” 110 projects that were in the middle of the process. That waiting list will also include another at least 40 projects the Justice Department said received “presumed risk” airspace notices from the federal government.
We’ve seen the Trump administration use extralegal means to delay wind energy before, but never to this extent or after a judge ruled against them. The Interior Department had been freezing wind and solar projects on federal lands under a policy requiring Secretary Doug Burgum sign off on routine approvals, but those typical government processes seem like they’ve resumed after a different federal court ruling enjoining that policy.
American Clean Power, the largest utility-scale solar and wind energy trade group, declined to comment. The Department of Defense did not respond to a request for comment.