Project Blue, Data Center has been canceled. The project is yet another casualty of community action against data centers because of their high power and water requrements. It now joins the Becker Minnesota data center project another billion dollar project canceled when due to legislative changes in Minnesota that included rolling back tax incentives previously granted to data center developments. All this is happening despite the boom in data center developments around the country.
The project had been approved by the Pima County Board of Supervisors as recently as last month. It joins a growing list of data center projects facing a backlash from local communities.
The project was a high-profile data center initiative led by San Francisco-based Humphrey’s Peak Properties, LLC, and developed by Beale Infrastructure, was initially set to span 290 acres and become one of the largest electricity consumers on the Tucson Electric Power (TEP) grid. The development was expected to include up to 10 buildings totaling 2.5 million square feet at full buildout.
Although developers did not seek local economic incentives, they planned to leverage state-level support to move the project forward. At the time, Pima County Administrator Jan Lesher emphasized the development’s significance, calling data centers the “physical backbone of the internet.”
Economic and environmental commitments that will not materialize
Before its cancellation, Project Blue was projected to create 180 permanent jobs by 2029 with an average salary of $64,000. It was also expected to generate 3,024 direct construction jobs and 2,049 indirect jobs during the 2026–2028 construction phase.
The planned investment included $1.2 billion in construction and $2.4 billion in new equipment. By 2029, the project was forecast to deliver an annual economic impact of $63.5 million.
The project also included a strong sustainability focus, with plans to use 100% renewable reclaimed water for cooling and operations. Developers intended to fund an 18-mile reclaimed water pipeline and a 30-acre aquifer recharge facility to replenish groundwater used during operations.
Energy agreements and annexation hurdles
Project Blue had secured a long-term energy agreement with Tucson Electric Power, which would have made the facility one of TEP’s largest customers. The agreement supported the utility’s clean energy goals, including solar and battery storage integration.
However, the project required the City of Tucson to annex the land in order to secure municipal water services. If annexation failed, ownership of the land would have remained with Pima County. With the project now canceled, the annexation process has ceased.
Construction had been expected to begin in late 2025 or early 2026, with the first data halls going live by 2027. Those timelines are now defunct following the cancellation.
Project Blue Data Center: Quick Facts (Canceled)
Project name: Project Blue Data Center
Location: Houghton Road near Pima County Fairgrounds, Tucson, AZ
Developer: Beale Infrastructure
Land buyer: Humphrey’s Peak Properties, LLC
Total investment: $3.6 billion
Planned footprint: Up to 2.5 million sq. ft. across 10 buildings
Construction jobs: 3,024 direct, 2,049 indirect
Permanent jobs: 180 by 2029
Average salary: $64,000 (requested increase to $75,000)
Water strategy: Reclaimed water pipeline and aquifer recharge project
Energy agreement: Long-term clean energy contract with TEP
Annexation: Required by City of Tucson (did not proceed)
Land sale: $20.8 million (contingent on annexation)
