Pocatello City Council votes to deny conditional use permit for AI data center applicant for a second time

POCATELLO, Idaho (KIFI) – On Thursday, September 17, the Pocatello City Council voted to affirm the hearing examiner's decision from May 19, 2026, in which she denied Lex Developments a conditional use permit for an AI data center project on land in Pocatello. However, their motion included the exemption of a 12-month waiting period before the applicant can reapply. Plus, when the decision is made official on October 1, the applicant will have 28 days to file a petition for judicial review, placing the City of Pocatello in a potential lawsuit.

The agenda item regarding the data center took about 30 minutes of Thursday's meeting. City Planning and Zoning Assistant Director Jennifer Flynn took the stand first to read the reconsideration document submitted by Lex Developments. As with the last Council vote on this issue, the City was presented with the options to affirm, modify or reverse the decision made by the hearing examiner back in May.

"The applicant's two filings raise a number of asserted deficiences in the council's decision," Flynn said. She added the applicant asked the Council to correct the planning director's interpretation of the code, seeking an automatic approval without a conditional use permit for the land at 1800 River Park Way. The other option presented by Lex Developments was to reverse the hearing examiner's decision and approve the company a permit so the project could proceed.

Flynn's presentation of Lex Development's reconsideration request further argued the AI data center project "aligned with the goals and policies of the comprehensive plan of the city" and that to be approved for a CUP, the project must be "conditionally permitted within the subject land use district."

"[The project] would not adversely affect the environment to a greater degree than had a use permitted outright by the ordinance been established," Flynn read.

The request for reconsideration discussion from the City Council ended with two proposed motions, both from Councilmember Bates. Following several comments from council members, Bates moved to reverse the hearing examiner's decision, allowing Lex Developments to obtain a conditional use permit.

That motion was seconded by Councilmember Stacy Satterfield, but failed in a 3-2 vote.

"I don't think, as an extention of the public here, that I can approve that because we don't know what we're getting into," said Councilmember Ann Swanson, explaining she felt there weren't enough details in the applicant's documents to explain the effects of a data center on the Pocatello community and resources.

The second motion from Bates was an effort to affirm the hearing examiner's decision, a repeat from July's vote. However, the motion forgoes the traditional 12-month waiting period for the developer to reapply.

Swanson voted against, as did Councilmember Paulsen, but the motion passed 3-2. With the decision set to become official on October 1, Lex Developments is welcome to reapply immediately. Also effective at the beginning of next month is the 28-day window Lex Developments has to file a petition for judicial review.

Councilmember Bates argued during the July City Council vote that it's possible the city could find themselves in a lawsuit if they denied the Conditional Use Permit again. In his comments at last week's meeting, Bates said he agreed with the applicant that a CUP was never required.

"This project should never have been required to go through a conditional use permit process in the first place. The director's interpretation treated proposed data center as an unlisted use and compared it to light-industrial-type uses," Bates said. "But this property is not zoned light industrial. It is zoned industrial– our most permissive zoning district."

Councilmember Swanson went on to say she appreciates her colleagues efforts and analysis in this issue before voting 'no' on the motion.

The next steps, should Lex Developments continue the fight for the land where the Hoku polysilicon plant once stood, would be to file a lawsuit with Bannock County's 6th Judicial District Court.

Local News 8 will continue to follow this developing story and release details as they become available.