Defunct Hoku Plant Site Eyed for Major AI Data Center Campus in Pocatello
A nearly two-decade-old symbol of unrealized economic promise on Pocatello’s northwest side could soon take on an entirely new identity. An Arizona-based development company is seeking city approval to transform the former Hoku polysilicon plant site into a large-scale artificial intelligence data center campus — a project its backers say could generate billions of dollars in investment and bring hundreds of jobs to Southeast Idaho.
Gilbert, Arizona-based Lex Developments, working alongside local property owner Portneuf Capital, has applied for a conditional use permit to redevelop the roughly 59-acre site at 1800 River Park Way. The Pocatello Hearing Examiner is scheduled to take up the application on May 14 in City Hall’s Council Chambers — a hearing that could mark the beginning of the most ambitious redevelopment attempt the property has ever seen.
A Long and Troubled History
The Hoku saga is familiar to anyone who has tracked Pocatello’s economic development landscape over the past two decades. Backed by Chinese investors, Hoku Materials broke ground on a $700 million polysilicon plant in 2007, drawing widespread excitement from local leaders who viewed it as a rare high-tech economic win for the region. The facility was intended to manufacture polysilicon — a key raw material for solar panels — and Idaho Power constructed a 110-megawatt substation on the property to meet its anticipated power demands. The city also upgraded road access to support the project.
But the plant never reached commercial production. Construction halted entirely in 2012, and in July 2013, Hoku Materials and its subsidiaries filed for Chapter 7 bankruptcy, reporting approximately $1 billion in debts. What followed was years of legal uncertainty, including a complicated three-way dispute over property rights among Celtic Life Science Group, Solargise America, and Portneuf Capital — a legal tangle that took years to resolve.
Portneuf Capital ultimately purchased the site from the Pocatello Development Authority in December 2019 for $1.25 million. The company — which includes Soda Springs natives L.D. Barthlome and Chad Hansen, along with Pocatello High School graduate Darren Miller — spent years clearing the property, removing debris, broken concrete foundations, and remnants of demolished steel structures. As part of its effort to distance the site from its troubled past, Portneuf Capital also had the street signs rebranded from Hoku Way to River Park Way.
The property has attracted a series of redevelopment concepts over the years, none of which advanced to fruition. The proposed AI data center campus, brought forward by Lex Developments representative Gus Schultz, is by far the most ambitious pitch the site has received. Pocatello has seen notable job market fluctuations in recent months, making a project of this scale particularly significant for the local economy.
Scale, Promise, and Unanswered Questions
If approved and constructed, the data center campus would occupy two parcels totaling approximately 59 acres. Proponents argue the development would deliver billions of dollars in construction investment, hundreds of construction-phase jobs, and a substantial long-term addition to Pocatello’s tax base — the kind of economic anchor the Gate City has long sought.
However, the scale of the proposal also raises practical questions that the May 14 hearing will likely begin to address. AI data centers are among the most power-hungry and water-intensive facilities in modern commercial development. The conditional use permit application includes details on water cooling methods and projected economic returns, but city officials and the hearing examiner will need to scrutinize how such a facility would meet its extraordinary demands for electricity, water, and wastewater disposal — all within an existing municipal infrastructure framework.
The site does carry one significant infrastructure advantage: the 110-megawatt substation Idaho Power built to serve the original Hoku plant remains on the property, a substantial head start on the power requirements a data center of this type would demand.
Pocatello has seen other recent commercial development activity. The Barin Group opened a new facility in Pocatello earlier this year, and the city has been working to attract and retain employers across multiple sectors. The Hoku site, however, has long represented the most glaring piece of unfinished business in the city’s economic development portfolio.
What Comes Next
The conditional use permit hearing before the Pocatello Hearing Examiner is scheduled for Thursday, May 14, in City Hall’s Council Chambers. That hearing will determine whether Lex Developments receives the local approval needed to move the project forward. If the permit is granted, the proposal would advance to subsequent development and permitting stages before any construction could begin. Community members and stakeholders with questions or concerns about the project are expected to have an opportunity to speak at the hearing. No timeline for a final development decision has been publicly announced.