The future of a proposed artificial intelligence data center on Pocatello’s northwest side now rests with the Pocatello City Council, after the Arizona-based developer formally appealed a conditional use permit denial earlier this week.
Lex Developments, headquartered in Gilbert, Arizona, filed its appeal on Monday, setting the stage for the City Council to take up a project that has drawn considerable attention for its scale and its location at one of Southeast Idaho’s most storied industrial sites — the former Hoku polysilicon plant, now referred to as the River Park Complex.
A Long-Dormant Site at the Center of the Dispute
The property has carried a complicated history since breaking ground in 2007 as part of an ambitious solar energy supply venture. The $700 million facility was built but never entered commercial production, and by 2013, the company had filed for bankruptcy, leaving behind a massive idle industrial campus along the Portneuf River corridor. Portneuf Capital later rebranded the access road from Hoku Way to River Park Way as part of redevelopment efforts at the site.
Lex Developments has been pursuing the site as a potential home for a major AI data center, a use that would require a conditional use permit under Pocatello’s zoning framework. The project ran into regulatory resistance, however, and the permit was denied — a decision the developer argues should never have been required in the first place.
Gus Schultz, who represents Lex Developments in the matter, contends the city lacked the authority to impose a conditional use permit requirement for this type of development at the River Park Complex location. The appeal essentially challenges whether Pocatello’s permitting process was appropriate for the proposed use at all.
Public Hearing Draws Community Input
A public hearing on the conditional use permit question was held May 14 in Pocatello’s Council Chambers, with Hearing Examiner Kathleen Lewis presiding. The session gave residents and interested parties an opportunity to weigh in on the proposal before the matter advanced through the city’s review process.
With the appeal now formally filed, the City Council stands as the next decision-making body in the process. Councilmembers will need to weigh both the merits of the development itself and the legal argument raised by Lex Developments — that the conditional use permit requirement was improperly applied to begin with.
For Pocatello, the stakes extend beyond a single zoning case. The River Park Complex site represents one of the most significant pieces of underdeveloped industrial land in Bannock County. A large-scale AI data center, if approved, would bring substantial infrastructure investment and potentially hundreds of jobs to a site that has sat largely inactive for more than a decade. Supporters of the project argue that data center development aligns well with the site’s existing industrial infrastructure and power capacity.
Critics and neighbors, however, have raised concerns about water usage, noise, traffic, and whether the community’s land use rules were being properly followed — concerns that the public hearing process was designed to surface.
What Comes Next
The Pocatello City Council will now take up the appeal from Lex Developments and determine whether the conditional use permit denial stands or whether the project can move forward. The council has the authority to overturn the denial if it finds the permitting requirement was misapplied, or to uphold the decision and require the developer to meet additional conditions.
No date for the council’s consideration of the appeal had been publicly announced as of this report. Idaho News Network will continue to follow the case as it moves through Pocatello’s municipal review process. For additional statewide coverage of economic development and land use issues in Idaho, visit idahonews.co.