Developer pulls out of hyperscale data center, natural gas plant proposed on BLM land in Henderson
A Texas-based company canceled plans for a proposed hyperscale data center and natural gas plant on federal land near the southeastern tip of Henderson, mere miles from a master-planned community at the base of the McCollough Mountains.
The 1,000-megawatt data center, detailed in an application obtained by the Sierra Club and shared with the Las Vegas Review-Journal, could have become one of the state’s most energy-intensive data centers. It was proposed on 680 acres of desert near the Paradise Hills community in Henderson.
That much energy is enough to power between 700,000 and 1 million homes, according to NV Energy.
In a statement Thursday morning, the developer said it consulted with the city of Henderson and the Bureau of Land Management and decided to withdraw its application “due to the city planned urban development efforts in same area.”
“Americans just don’t want data centers on public lands,” said Christian Solomon, the Sierra Club’s political director. “It’s been a tricky issue.”
Skylar Opportunities LLC is an affiliate of the same company, Skylar Capital Management, behind the contested Boulder City data center project on federal land that has been put on hold by an administrative judge while an appeal from city officials and environmental groups is processed. That data center may become the first to be built on BLM land nationwide.
The BLM, which had attempted to use the developer’s environmental review of a solar project for its data center, has asked a judge this week if it can conduct additional review.
“Now, it’s a bubble that everybody’s trying to rush into,” Solomon said. “We’re trying to be mindful of scaled growth and ensuring that these data centers are being developed with the highest environmental standards in mind, as well as our neighbors’ peace of mind.”
Regulation may be coming
A developer spokesperson did not answer a follow-up inquiry about whether the Boulder City project and the now-abandoned Henderson project were related.
According to the application from November, the developer estimated that the construction would cost between $1.5 billion and $2 billion. It planned to raise the money with investment capital, tax equity and debt capital. It cited the project’s proximity to the existing development as a plus, saying “additional environmental impacts are expected to be minimal.”
The Henderson City Council previously considered and rejected a data center pause, instead focusing on case-by-case agreements with developers. However, the parcels that were under consideration for this data center are entirely under the purview of the federal government.
The rush to place data centers on public lands has been a focus of President Donald Trump since July 2025, when he issued an executive order that directed federal agencies to speed up permitting timelines for data centers.
The Pacific Legal Foundation, a libertarian public-interest nonprofit law firm, has told the Las Vegas Review-Journal that no effort should be made to arbitrarily restrict data center development, as it “forecloses economic growth and sets a dangerous precedent of politicians picking and choosing amongst their favored industries while they are in power.”
This month, Gov. Joe Lombardo issued an executive order that will require data center developers to sign a community benefit pledge before they are eligible for tax incentives. The exact terms of that pledge are not yet public; the executive director of the Governor’s Office of Economic Development will consult with regulators to create those terms by Nov. 6.
Data centers are certain to be a top issue in the 2027 Nevada Legislature, with one interim committee advancing a bill to pause data centers statewide and eliminate all their tax breaks.
Natural gas plant draws ire
Among environmental groups’ biggest objections to data centers in Nevada is the construction of natural gas plants to power the centers.
Natural gas plants burn fossil fuel, which a consensus of scientists say is warming the planet. While it releases less carbon dioxide than coal or oil, it is not considered a renewable energy source. This month, energy regulators approved two temporary gas plants in Northern Nevada to power Fleet data centers.
Utilities in the state are mandated by law to source half of their energy from renewables by 2030 — a goal that NV Energy has acknowledged data center demands will force it to miss.
Teresa Bell, a Sierra Club volunteer who lives in Henderson, said she is concerned about data centers’ cumulative impacts, many of which have not been fully studied or understood.
Both Bell and Solomon, in separate interviews, brought up Switch as a potential model for development.
The Las Vegas-based company powers its data centers with renewable energy, has concentrated its major southwest valley campus on a large tract of land it owns further from residential neighborhoods and uses closed-loop cooling systems designed to eliminate water consumption for cooling servers.
“We’re in a predicament here,” Bell said. “These are long-term decisions that will affect whether people will be able to move to Nevada, if it’s too hot and there’s not enough water.”
Contact Alan Halaly at ahalaly@reviewjournal.com. Follow @AlanHalaly on X.