Pocatello council affirms denial of conditional-use permit for proposed AI data center at River Parkway

Pocatello Mayor Mark Dahlquist presided as the City Council on July 1 reviewed an appeal of the hearing examiner's denial of conditional-use permit CUP26-003, requested by Lex Developments for two parcels at 1800 River Parkway to host an AI data center.

Jennifer Flynn, assistant planner, told the council the hearing examiner's May 19 written decision found the application lacked sufficient information on whether the project could be served by public facilities and services, on environmental impacts and on whether the project would not be detrimental to public interest, health, safety or welfare (citing Pocatello Municipal Code 17.02.130 and related criteria). The staff packet included a conceptual site plan, a staff report, and utility notices to internal and external reviewers including Idaho Power and Idaho DEQ.

Applicant Gus Schultz of Lex Developments described the proposal as a multi-building campus on roughly 59 acres and said the cooling system would use a closed-loop design. Schultz told councilors the closed loop would require a one-time fill of about 300,000 gallons and limited monthly makeup (he characterized ongoing water use as low because of the closed-loop circulation and antifreeze/glycol use). Tom Kirkman, the city's public works director, said the city had provided boundary-condition information including a 1,000,000-gallons-per-day allocation and a 42-inch sewer main with substantial capacity, but confirmed that project-specific engineering studies and final utility-impact analyses had not been submitted.

Council members pressed staff and the applicant on the timing and content of required studies. Planning Director Bridal McClain said data centers are not listed in the city's use table, which is why the director routed the application to the conditional-use-permit process to vet impacts and appropriate conditions. City Attorney Jared Beck advised the council that, under the municipal code, the council can make studies (demographic, engineering, environmental, traffic and more) conditions of approval and that final compliance can be delegated to staff or returned to council for confirmation.

Debate centered on whether the hearing examiner correctly applied three contested criteria (d(4), d(6), d(7)) about public facilities, comparative environmental impact and detriment to public interest/health/safety. Several council members said the applicant had provided comparative evidence and preliminary estimates that could be verified through conditions and later engineering; others said the application remained too speculative and that accepting it without completed studies risked environmental or service impacts and possible enforcement challenges.

After extended deliberation, Councilman Nichols moved and Councilman Paulson seconded a motion to affirm the hearing examiner's denial of CUP26-003. The council carried the motion on roll call and the mayor adjourned the meeting. The council's action leaves the applicant the option to reapply under the municipal ordinance (the standard reapplication interval cited in the meeting is 12 months) or to seek judicial review of the decision.

The council repeatedly noted that conditional-use permit approval could have been structured with strict, verifiable conditions (studies, proof of Idaho Power impact analysis, building-permit checks, environmental assessments) but differed on whether those conditions should be required before granting land-use approval or could be imposed as a condition of an approval. The city attorney said the council has the authority to require and enforce such studies and that, if the council had chosen reversal with conditions, it could set timeframes and verification steps to satisfy final approval.

Next steps: the applicant may reapply after the statutory waiting period or pursue judicial review; the council also discussed updating Title 17 land-use code to address modern uses such as data centers and to add clearer standards for noise, utility consumption and other operational metrics. The planning department indicated code revisions and a broader Title 17 rewrite are underway and estimated a data-center-specific code update would take roughly 8–12 months.

Authorities referenced in the hearing included Pocatello Municipal Code 17.02.130 and Idaho code provisions applicable to conditional-use procedures and judicial review. The council's decision applies only to this site and application; it does not change the city's use table or automatically allow other data centers.