The hulking reactor building of the former Hoku polysilicon plant looms over the River Park Complex on Friday. The $700 million plant broke ground in 2007 but never opened for commercial production, filing for bankruptcy in 2013. A conditional use permit hearing is scheduled for May 14 that could set the stage for the site’s most ambitious redevelopment yet.
Shelbie Harris/Idaho State Journal
POCATELLO — A site that has spent nearly two decades as a symbol of the Gate City’s frustrated ambitions may be on the verge of its most transformative chapter yet.
The long-defunct Hoku polysilicon plant on Pocatello’s northwest side could soon become an AI data center — one that its proponents say would generate billions of dollars in investment, hundreds of construction jobs and a lasting addition to the local tax base.
An Arizona-based company has applied for a conditional use permit and is set to pitch the idea before the Pocatello Hearing Examiner on Thursday, May 14, in Council Chambers at City Hall.
The proposal marks the latest — and by far the most ambitious — chapter in a long and complicated saga surrounding the property since Hoku Materials went bankrupt in 2013, which set off a journey involving multiple owners and a three-way legal dispute over who actually owned the site.
Hoku has seen a parade of redevelopment ideas come and go. Now Portneuf Capital and Lex Developments are asking the city to greenlight a project that could bring billions in construction investment and hundreds of jobs to the Gate City — while also raising questions about how a facility of this scale will handle its extraordinary demands for power, water and wastewater disposal.
Portneuf Capital, the limited-liability company that owns the property, is working with Gilbert, Arizona-based Lex Developments and its representative, Gus Schultz, on the proposal.
Lex Developments is requesting a conditional use permit to convert the former plant site — now known as the River Park Complex — into a large-scale AI data center campus.
Portneuf Capital, which includes Soda Springs natives L.D. Barthlome and Chad Hansen as well as Pocatello High School graduate Darren Miller, purchased the defunct Hoku plant from the Pocatello Development Authority in December 2019 for $1.25 million.
The project would be built on two parcels totaling roughly 59 acres at 1800 River Park Way, the address formerly identified by the name Hoku etched onto street signs that Portneuf Capital had removed years ago in an effort to rebrand the property.
A troubled history
The Hoku saga is well-known to anyone who has followed Pocatello’s economic development efforts for any length of time. Backed by Chinese investors, Hoku Materials broke ground on a $700 million polysilicon plant in 2007 amid considerable fanfare, promising to manufacture the raw material needed for the booming solar panel market.
Idaho Power built a 110-megawatt power substation on the property to serve the plant’s anticipated energy needs. The city improved road access. Local leaders celebrated what looked like a rare high-tech prize for Southeast Idaho.
It never opened.
The construction of the polysilicon plant stopped entirely in 2012. Then in July 2013 Hoku and its subsidiaries filed for Chapter 7 bankruptcy, reporting roughly $1 billion in debts. Ever since, the plant has sat idle for nearly two decades, passing from one owner to the next.
Along the way, a complicated three-way dispute over ownership of the site’s buildings erupted when Celtic Life Science Group, Solargise America and Portneuf Capital each made conflicting claims about who held rights to the property — a legal tangle that took years to fully resolve.
Through it all, the site remained what former Mayor Brian Blad once described as something the city needed to “either tear it down or turn it into something useful.”
Portneuf Capital’s December 2019 purchase represented the first genuine attempt at the latter.
In the years that followed, Portneuf Capital tore down the remaining steel structures, cleared the site, installed infrastructure, rebranded the street leading in from Kraft Road as River Park Way and began attracting tenants.
There was also a period where the development group floated the idea of a massive pressurized air-dome sports complex on the property — a $13 million proposal that would have been, by the company’s own accounting, the largest multi-purpose sports facility in Idaho. That plan did not come to fruition.
The AI data center proposal is the most ambitious use yet floated for the site.
What is being proposed
The application calls for a data center campus featuring seven 100,000-square-foot buildings spread across the roughly 59-acre site. The project is being branded as the Pocatello AI Data Center, and architectural drawings prepared by Mesa, Arizona-based Edifice show the buildings arranged along the long axis of the property with associated parking and retention areas.
Because data centers are not an explicitly listed use category in Pocatello’s zoning ordinance, the city’s planning director and mayor determined that a conditional use permit is required before the project can move forward.
City planning staff concluded in their report that the proposed use complies with the relevant sections of Pocatello city code and recommended approval, subject to four conditions — among them, that Idaho Power’s impact analysis for power generation be provided to the city once complete.
That power question is not a minor footnote. The data center is expected to require up to 100 megawatts of electricity — a
figure Idaho Power has noted is roughly equivalent to what the entire city of Pocatello consumes in a year.
Power at that scale will not be available immediately, and Lex Developments is working with Idaho Power and Intermountain
Gas to bridge the gap, with gas turbines expected to supplement power in the interim.
Lex Developments’ presentation materials make clear this is designed as a modern AI data center, not a conventional server
farm. Modern AI chips — the kind powering the latest generation of machine learning applications — generate between 50 and 140 kilowatts of heat per rack, compared to 10 to 20 kilowatts for traditional computing equipment.
That thermal load makes air conditioning physically inadequate and requires what engineers call closed-loop liquid cooling, a
sealed system in which coolant circulates continuously without being consumed. Lex Developments compares it to the coolant
system in an automobile engine.
According to the presentation, the approach has been standard practice among major technology companies — Oracle,
Microsoft, Amazon Web Services and Google among them — since at least 2022 and has been used in high-performance
computing environments dating to IBM mainframes in the 1960s.
The project’s target Power Usage Effectiveness rating of 1.08 — a measure of how efficiently a data center converts electricity
into useful computing — would place it among the most efficient facilities in the industry.
Lex Developments also cites Pocatello’s climate as a meaningful advantage, noting that the city’s cold winters allow outdoor air to assist in cooling for an estimated 5,000 to 7,000 hours per year, reducing reliance on mechanical cooling systems for much of the calendar year.
Water and wastewater questions
City staff flagged several utility questions that remain unresolved, including how much wastewater the facility will discharge,
whether pretreatment will be required and what chemicals, if any, will be discharged to the sewer system. Staff also noted that
the city’s primary wastewater interceptor line runs alongside or through the property and that full 24/7 access to the line and
its manholes must be maintained.
The Fire Department has indicated a secondary access route will be required.
Lex Developments’ response to water concerns leans heavily on the distinction between older evaporative cooling technology
— which can consume millions of gallons of water per day — and the closed-loop system proposed here, which the company
says requires a one-time fill of coolant during construction and produces no ongoing potable water demand for cooling purposes.
The presentation cites Oracle’s February 2026 announcement that its AI data centers operate with effectively zero ongoing
community water use for cooling and Microsoft’s confirmation that all new data center designs from August 2024 use closed loop liquid cooling with zero water evaporation.
The economic pitch
Supporters are pitching the project as a generational economic opportunity for not only Pocatello but all of Bannock County.
Lex Developments’ presentation, drawing on industry benchmarks from JLL’s 2026 Global Data Center Outlook, projects that a 200-megawatt facility — which appears to be the full buildout envisioned across the seven buildings — would represent a total shell and core construction investment of approximately $2.26 billion.
Peak construction employment is estimated to add 140 to 400 local jobs, with electricians on data center sites reportedly earning $120,000 to $150,000 annually, more than 30 percent above standard market rates.
On the ongoing operations side, industry benchmarks cited in the presentation project 150 to 300 permanent local jobs, $7.8 million or more in annual local wages and $32.5 million or more in annual local economic activity.
Because Bannock County’s combined property tax levy rate runs at roughly 1.2 percent of assessed value, a multi-billion-dollar facility would generate substantial annual property tax revenue that, under Idaho law, stays entirely within the county’s local taxing districts — including School District 25, the City of Pocatello, Bannock County and road and ambulance services.
The presentation notes that all figures are estimates based on current industry benchmarks and carry no guarantee of outcome.
What comes next
The May 14 presentation before the Hearing Examiner is the first formal public step in what is likely to be a lengthy review and approval process. The Hearing Examiner has authority to approve the project outright, approve with conditions or deny the conditional use permit application. Any decision can be appealed to the Pocatello City Council.
City staff recommended approval subject to conditions, including the requirement that the applicant coordinate with city departments prior to submitting a building permit and that Idaho Power’s power impact analysis be shared with the city once complete.
The meeting begins at 5:30 p.m. in the Pocatello City Council Chambers at 911 N. Seventh Ave. Members of the public who wish to address the Hearing Examiner may do so, with oral testimony generally limited to three minutes per person.
For a site that has cycled through failed polysilicon dreams, a British businessman’s promises, an Indian metals company’s broken commitments and an air-dome sports complex that never broke ground, the AI data center proposal represents something genuinely new — a use case that, if it comes to fruition, would dwarf everything previously proposed for the property and reshape the economic landscape of Pocatello’s northwest side for decades to come.
Perhaps it’s finally time the rhetorical “will it be another Hoku?’ question surrounding economic development in the Gate City area gets to bed forever.
But at what cost?
When contacted, representatives involved with the project declined to comment. The Idaho State Journal obtained all information related to the project from the proposal included in the conditional use permit application.