The U.S. Forest Service took the unusual step last week of rejecting a development proposal on environmental grounds, blocking a proposal to build a large housing and commercial project near the rim of the Grand Canyon.

“I have determined that the Tusayan proposal is deeply controversial, is opposed by local and national communities, would stress local and park infrastructure, and have untold impacts to the surrounding tribal and National Park lands,” Heather Provencio, the supervisor of Kaibab National Forest, wrote in a letter explaining the position.

Touting a housing shortgage, an Italian developer, Stilo Group, had proposed building about 2,200 housing units and three million square feet of commercial properties in tiny Tusayan, Arizona, which is just south of Grand Canyon National Park. A host of local and national environmental groups had issued comments opposing the plan, from the Grand Canyon Trust to the Sierra Club. The National Park Service also opposed the project.

"Our principal concern was where they were going to get water for this massive new development," says Roger Clark, the director of the Grand Canyon program for the Grand Canyon Trust.

Tusayan gets its water from springs that are part of the national park's watershed, says Clark, and those springs are already overtapped. The project also threatened to disrupt wildlife, cause traffic congestion, and damage sites that are sacred to Native Americans, he says.

View Images More than five million people visit the Grand Canyon each year. Photograph by Pete McBride, National Geographic

Patchwork Land

Much of the land around Grand Canyon National Park is public, but it is overseen by several different agencies, including the Forest Service, the Bureau of Land Management, and tribal authorities. That can make management tricky. In order to build the proposed development, Stilo needed approval for roads through Forest Service land.

"Normally these requests are rubber-stamped, but the Forest Service said a project here must clearly be in the public interest," says Clark. "They said the developer must prove that there will be no impacts."

The development isn't permanently killed, since the agency left the door open for any proposals should they be able to demonstrate minimal environmental harm.

This latest win for those opposed to development comes after local Native Americans have set aside a plan that would have allowed new construction near the canyon's rim, including a gondola that would take visitors to the floor. At first some tribal leaders supported the project, but it has recently lost favor.

Not Out of the Woods

The National Parks Conservation Association has praised the rejection of the Tusayan proposal but warns that numerous threats remain to the Grand Canyon, which the group calls among the nine most at-risk parks.

Clark says the park's watershed remains at risk from uranium mining. "Not only does uranium mining use water, because they pump it out, but it also threatens permanent contamination," he says.

In 2007, the Forest Service ruled to allow exploratory uranium mining in the area around the park without requiring companies to prove that it wouldn't cause environmental harm. Conservationists and Native Americans criticized that ruling, which led to a change in 2012, when a 20-year moratorium on new mines was passed. The industry and the state of Arizona challenged that rule with a lawsuit.

View Images Located on Havasupai land, these gorgeous falls may be threatened by water use in the area, the tribe warns. Photograph by Pete McBride, National Geographic

Within the next few months, a pair of federal court cases could establish whether the moratorium will hold and determine the fate of existing mining operations, which environmentalists have also sued to block. Partly because the outcome of those cases is unclear, Clark is urging the Obama administration to create a new national monument out of the federal lands not yet protected in the Grand Canyon watershed. The national park is currently about 1.2 million acres, and Clark would like to see a monument out of 1.7 million additional acres of public land.

The proposed monument has received opposition from some ranchers and members of the Arizona Republican leadership, although a recent poll found support among 80 percent of likely state voters.

View Images The Grand Canyon area is home to many natural wonders, including the Olo slot canyon. Photograph by Pete McBride, National Geographic

Correction: An earlier version of this story said environmental groups had sued to block the development. Actually, they issued formal comments against the plan but did not sue.