Pocatello City Council Denies AI Data Center Permit

The Pocatello City Council voted 4-1 on July 16, 2026, to uphold a hearing examiner's May denial of a conditional use permit for Lex Developments LLC. The permit would have enabled the Gilbert, Arizona-based company to construct an AI data center at the former Hoku polysilicon plant site at 1800 River Park Way. The original denial cited insufficient data regarding wastewater capacity, power, water, air quality, and environmental impacts.

Developer representative Gus Schultz claimed he possesses signed letters of intent from multiple companies and announced plans to seek judicial review in Bannock County's 6th Judicial District Court. Councilmember Dakota Bates cast the lone dissenting vote, warning that a judicial victory for the developer could strip the city of its ability to impose conditions on the project.

Mayor Mark Dahlquist expressed concerns over the speculative nature of the project's commitments and noted that the city's land use code, which dates to the 1990s, requires a comprehensive revision to address AI data centers. Following the vote, a local resident launched a recall effort targeting Bates.