POCATELLO — The Hoku data center saga has reached what may be its final stop before the courthouse steps.
The Pocatello City Council voted Thursday to once again affirm Hearing Examiner Kathleen Lewis' denial of the conditional use permit that would have allowed Lex Developments LLC to build a large-scale AI data center on the former Hoku polysilicon plant site at 1800 River Park Way — this time on a reconsideration request that Lex Developments' Idaho Falls attorney, Jon Stenquist of Parsons Behle & Latimer, had argued exposed the city to reversal on judicial review.
The evening produced two motions.
The first, made by Councilmember Dakota Bates and seconded by Councilmember Stacy Satterfield, would have reversed the prior denial and approved the conditional use permit subject to five conditions. It failed 3-2, with Councilmembers Hayden Paulsen, Corey Mangum and Ann Swanson voting against.
The second motion, also made by Bates and seconded by Mangum, affirmed the denial but stripped the standard 12-month reapplication bar — effectively clearing the way for Lex Developments to reapply immediately. That motion passed 3-2, with Paulsen and Swanson voting against.
The vote is expected to become official at the Oct. 1 City Council meeting, at which point Lex Developments' 28-day window to file a petition for judicial review in Bannock County's 6th Judicial District Court begins.
Bates, who said he cannot discuss the matter further until the decision is formally adopted, told the Idaho State Journal Monday the limbo is irritating.
"It's frustrating to us that we can't say anything more," he said. "We want to keep the public informed on this topic — we just can't until that Oct. 1 meeting."
Lex Developments representative Gus Schultz and Stenquist did not respond to requests for comment Monday.
Bates took to Facebook the day after the Sept. 17 meeting to share the remarks he delivered on the record Thursday night, describing them as a representation of his reasoning — and offering the most detailed public accounting yet of why he has been the council's lone consistent dissenting voice throughout this process.
In those remarks, Bates said he agreed with the applicant on one foundational point: the project never should have required a conditional use permit in the first place.
"I want to begin with something that has troubled me throughout this process," Bates said at the meeting, remarks he posted publicly Friday. "I agree with the applicant that this project should never have been required to go through a conditional use permit process in the first place. The Director's interpretation treated the proposed data center as an unlisted use and compared it to light-industrial-type uses. But this property is not zoned Light Industrial. It is zoned Industrial — our most permissive zoning district."
Bates presented what he described as a contradiction at the heart of how the city handled the initial Hoku data center application from the start.
"The City's own interpretation says this project is most comparable to light-industrial-type uses. Yet at the same time, the City has treated the project's intensity and its demand on utilities as reasons it requires special review, despite the project being located in a more permissive zone," he said. "I do not believe those two conclusions fit together. If this use is truly comparable to light industrial, then its intensity cannot also be the reason it requires a Conditional Use Permit in a zoning district specifically intended to accommodate more intensive uses."
Additionally, Bates noted that reversing the Planning Director's interpretation was beyond the council's authority Thursday night under his reading of city code — a concession that shaped the motions he ultimately made.
He focused part of his pre-vote testimony on the potential collateral damage of the city's approach.
"What might have been an opportunity for the city, the applicant and the community to work through legitimate concerns together — and to determine whether this development could become a partnership that provided real community benefit — instead became a prolonged and deeply divisive conflict," Bates said. "That has damaged trust among the applicant, the city and much of our community."
On the three criteria Lewis found unsatisfied — D4, D6 and D7, respectively covering public facilities, environmental impact and public health and welfare — Bates argued the record contained evidence Lewis failed to adequately address.
"On D4, that includes Idaho Power's preliminary conclusion that it believed the requested electrical service could be provided, along with the applicant's own testimony providing a site-specific estimate of water usage," he said.
On D6, Bates argued Lewis never identified what permitted industrial use she was comparing the data center to when assessing environmental impact — a comparison the code explicitly requires. And on D7, he argued the written decision essentially demanded final engineering answers at a stage of the process not designed to produce them.
"A land-use determination should answer whether the use can work at this location and under what conditions," Bates said. "It should not require every final engineering question to be answered before that land-use determination can be made. That distinction matters."
Bates framed the council's obligation in terms that went beyond the immediate vote.
"We also have an obligation to produce a decision that is supported by the record and can withstand judicial review," he said. "That is important legally, but it is also important to public trust. People should be able to see that our decisions follow the standards we adopted and that contrary evidence in the record was genuinely considered. For those reasons, my concerns with the previous decision remain unresolved."
Not everyone on the council shared that view. Swanson, who voted against both motions, argued the burden of proof rested squarely with the applicant and had not been met.
"If you feel that strongly about a project as a developer, I think that your job is to make that data available to the decision makers, so we can understand what we're getting into," Swanson said. "I don't think they did that. I see it as the city taking on risk that the applicant should have hedged against from the beginning."
Planning Director Brent McClane, questioned by Mangum during deliberations, explained that the lack of utility information in the original application was central to his decision to route the project through the conditional use permit process rather than treating it as a permitted use outright.
"It is a use that's not listed in our use table," McClane said, adding that the original application "was very short on information" regarding water, power and other utility demands.
McClane also noted data centers represented unfamiliar territory for city staff.
"We're familiar with a potato processing facility," he said. "There's a lot of those uncertainties of what is this facility actually going to bring, and what are the impacts."
Mangum, who voted against reversing the denial but joined Bates and Satterfield in supporting the modified affirmation that eliminated the reapplication bar, asked McClane whether utility usage alone could be grounds for denial.
McClane said it was not capped but could potentially be a factor if excessive demand rose to the level of impacting public health, safety or welfare.
Mangum also attempted to add a requirement to the second motion that any future application include estimated utility usage figures, but Pocatello City Attorney Jared Johnson shut it down. Adding such criteria to a motion about a potential future application, Johnson said, was not legally permissible because it ventured into territory not part of the original appeal record.
The next legal step following Thursday's vote is a lawsuit filed in 6th District Court.
With the council's decision becoming official Oct. 1, Lex Developments and Stenquist will have 28 days from that date to file a petition for judicial review.
Schultz has previously told the Idaho State Journal that judicial review is coming "absolutely, 100 percent," and that if the 6th District Court sides with him, any changes Pocatello makes to its land use code in the interim won't apply — he'll be grandfathered in under the rules in place when he first applied.
The site at the center of it all — the former Hoku polysilicon plant, bankrupt since 2013 with roughly $1 billion in debts after a $700 million facility backed by Chinese investors was abandoned mid-construction in 2012 without ever producing a single product — remains what it has been for more than a decade.
What happens next may finally be decided by a judge.