Beale Infrastructure has reported that plans for Project Blue, a sustainable data center initiative in partnership with the City of Tucson, will not move forward following a City Council decision on August 6, 2025. Project Blue aimed to develop data centers using reclaimed water infrastructure and carbon-free energy, with a planned $3.6 billion initial investment in Tucson’s southeast industrial development zone.
Project Blue’s technical approach focused on maximizing sustainable data center design, responsible use of reclaimed water, and the pursuit of carbon-free energy sources. Beale worked in collaboration with City of Tucson engineers, Tucson Water, and Tucson Electric Power, proposing to use a portion of Tucson’s reclaimed water portfolio for data center cooling. Beale committed to replenish all water used by investing in new water sources, funding per- and polyfluoroalkyl substances (PFAS) remediation projects, repairing system leaks, and supporting other initiatives enforced by a development agreement.
Community engagement included a series of public information-sharing sessions. According to Beale, alternative cooling designs with minimal water use remain possible, but were not prioritized based on the City’s preference for reclaimed water infrastructure expansions. On August 6, 2025, the Tucson City Council voted to discontinue engagement regarding annexation, resulting in Beale canceling its reclaimed water system expansion plans.
Brendan Gallagher, Senior Vice President of Development, stated, “We are disappointed in the decision not to pursue this opportunity for Tucson. We partnered closely with municipal engineering teams and Tucson Water to develop plans directly compatible with Tucson’s Climate Action and Adaptation and One Water plans,” said Gallagher. “We see it as a missed opportunity for the city, as this project potentially represents tens of millions of dollars in tax revenue, hundreds of millions of dollars in infrastructure to serve the community, and thousands of high-paying local and union jobs.”
Beale announced plans to continue exploring data center development, clean energy strategies, and digital infrastructure investment across the US, while remaining open to further engagement on sustainable data center standards in Southern Arizona.
Source: Beale Infrastructure
