Cielo’s Florida Data Center Project Stalled by City Water Shortage

A planned data center development in Florida is facing significant delays due to the host city’s limited water supply, highlighting the growing tension between rapid data center expansion and local infrastructure constraints. The project, proposed by Cielo Digital Infrastructure, is located in Haines City, Polk County, east of Tampa and south of Bay Lake.

The proposed campus, situated along Marion Road and State Road 544-East, would require up to 150,000 gallons (681,913 liters) of water per day to support its cooling and operational needs. Cielo aims to build a 300MW facility on approximately 74 acres. However, Haines City has been struggling with water capacity issues as it experiences rapid population growth. Since 2020, more than 10,000 single-family and multifamily residential units have been constructed in the city, and its population surged by roughly 40 percent between 2019 and 2024.

City officials have been in discussions with the Southwest Florida Water Management District since 2022 to secure permission for increased water usage. According to local reports from Fox, The Lakeland Ledger, and BayNews9, Haines currently has the capacity to produce ten million gallons of water per day but already consumes just over seven million gallons. To accommodate ongoing growth, the city is requesting a permit increase to 16.42 million gallons, and has added an additional 150,000 gallons to that request specifically to account for Cielo’s planned data center.

Cielo first approached Haines officials about its plans last year, but the city has yet to receive formal development applications for the project. Cielo did not provide a comment to Fox News regarding the delays. Founded in 2023, Cielo was previously owned by Texas-based investment manager Arroyo Investors through its Arroyo Energy Investors Fund IV, with the investment listed as realized in March 2026. The company is targeting projects across multiple states, including South Carolina, Tennessee, Illinois, Colorado, Missouri, Texas, Minnesota, and Iowa. It had previously been developing a large campus in Virginia’s Culpeper County, but that site has since been sold and taken over by Edgecore. At the time of writing, Cielo’s website is down.

The situation underscores a broader challenge for the data center industry: as demand for digital infrastructure surges, access to essential resources like water and power is becoming a critical bottleneck. The inability of Haines City to guarantee water supply for a major facility like Cielo’s could serve as a cautionary tale for developers seeking to build in fast-growing municipalities with aging or limited utility infrastructure.