Sandpoint’s City Council voted unanimously in mid-July to direct city staff to draft an ordinance banning data center development within city limits, moving preemptively to close what officials view as a regulatory gap before large-scale industrial projects can take root locally.
The council’s July 15 action, initiated by Councilor Pam Duquette, instructs staff to develop a formal definition of “data center” and propose zoning restrictions that would prohibit such facilities across Sandpoint. The current Industrial Zoning Code permits data centers in the Industrial Park District, a 19-parcel area east of the airport and west of North Boyer Avenue.
Duquette emphasized the infrastructure burden associated with such facilities. “I think people got the idea that we might be pushing data centers, and that is the farthest thing from my mind,” she said, noting that data centers demand “huge demands of electricity and water.” Her concern reflects growing national attention to the resource intensity of computing infrastructure, particularly as artificial intelligence applications expand.
Pocatello’s Recent Rejection Sets Regional Precedent
The Sandpoint action follows a high-profile rejection in neighboring Pocatello. On July 20, the Pocatello City Council upheld its previous denial of a proposed $2.6 billion data center development. The facility, planned by Lex Developments, was slated for a 49-acre former polysilicon manufacturing site. That decision signals growing skepticism in Idaho communities toward large-scale data center projects, regardless of their economic scale.
Idaho’s recent legislative session also addressed data center operations. House Bill 895, signed into law following the 2026 session, requires data center developments to employ closed-loop cooling systems—a regulation aimed at reducing water consumption, a key concern in water-scarce regions of the state.
The timing of Sandpoint’s move reflects broader industry shifts. Technology manufacturer Micron Technology consolidated its consumer parts business into artificial intelligence data centers in late 2025, accelerating demand for computing infrastructure across the region and placing data center development on city agendas statewide.
Staff Expected to Complete Code Revision Quickly
Mayor Jeremy Grimm indicated the zoning code change could be finalized in approximately two months, suggesting the city intends to move swiftly through the drafting and adoption process.
Kyle Schreiber, speaking to the need for the ordinance, noted a persistent challenge for local governments managing growth and development. “It’s common for us to become aware of loopholes in our Code only when a developer brings forth a permit, and at that point it’s too late,” he said, underscoring why Sandpoint is acting before any data center proposal formally lands on the city’s desk.
The council’s unanimous vote suggests broad agreement among elected officials that large-scale data centers do not align with Sandpoint’s development priorities or infrastructure capacity. Unlike Pocatello, where a specific project proposal triggered formal review and denial, Sandpoint is eliminating the possibility of future applications by closing the zoning door before it becomes an issue.
What Comes Next
City staff will now draft the data center definition and supporting ordinance language for council review. Once staff presents a proposal, the council will likely hold a public hearing before taking a final vote. If Grimm’s timeline holds, residents could see the ordinance adopted by late September.
The move puts Sandpoint in step with Pocatello and reflects a cautious stance toward large industrial computing operations, even as data center demand surges nationwide. For property owners in the Industrial Park District, the ordinance will eliminate data center development as a future use, a significant constraint on potential industrial zoning applications.
Bonner County communities have grappled with zoning and development pressures in recent months. The Bonner County Zoning Panel recently backed a scaled-down Yoman Bluffs subdivision after considerable public input, and Sandpoint residents launched a recall drive against the mayor and council president over a controversial parking program, illustrating the intensity of local land-use and governance debates in the area.