A $15-billion AI land grab is tearing apart this parched California desert town

Two massive projects target Imperial Valley

Two companies want to build massive data centers in California’s Imperial Valley, a rural desert region about 90 miles east of San Diego near the Mexican border.

Developer CalEthos plans a $5.5 billion complex on 315 acres of farmland, with its first phase featuring a 200,000-square-foot facility powered by geothermal and solar energy.

A second company, Imperial Valley Computer Manufacturing LLC, proposed a $10 billion, 950,000-square-foot project near the small city of Imperial.

That would make it the largest data center in California, roughly six times the size of an average Costco. Both projects aim to power Silicon Valley’s artificial intelligence boom.

A poor region weighs jobs against risk

Imperial County is one of California’s poorest, with a poverty rate around 17 percent and stubbornly high unemployment. About 180,000 people live there, and the region is majority Latino.

The recent closure of the Spreckels sugar plant wiped out hundreds of jobs and roughly $243 million in annual economic activity.

Developers pitch the IVCM data center as a lifeline, claiming it would create more than 1,600 construction jobs, 100 permanent positions, and about $28.75 million a year in tax revenue.

But activists worry the community would accept minimal benefits in exchange for serious environmental harm.

Water and power demands raise alarms

The IVCM data center would need about 750,000 gallons of water per day for cooling, equal to what roughly 9,000 U.S. households use daily.

Its power demand of 330 megawatts would eat up nearly 30 percent of the Imperial Irrigation District’s available energy supply.

A district feasibility study found it may not have the capacity to reliably support the project and would likely need to import most of the power.

Residents already deal with frequent summer blackouts as demand spikes in the extreme desert heat.

Local officials regularly urge people to conserve water, even though the region holds some of the oldest legal claims to Colorado River water.

Developer designed project to skip review

IVCM developer Sebastian Rucci, a Huntington Beach-based attorney, structured the project to avoid California’s environmental review process, known as CEQA.

Rucci argued it qualifies as a “ministerial” action because the land is already zoned for industrial use. Imperial County agreed and granted a grading permit in November 2025 without environmental review.

Critics say a project this large should not skip a process designed to study impacts on water, air, noise, and energy.

State Sen. Steve Padilla called the exemption troubling, saying residents deserve a full picture of the project’s demands before approval.

City of Imperial sues the county

In December 2025, the city of Imperial sued the county, accusing officials of violating CEQA by fast-tracking the project without public input.

City Manager Dennis Morita said residents should have a voice in how the development moves forward.

The lawsuit argues the site sits partly on farmland zoned for agriculture and that the project needs conditional use permits for its battery storage facilities.

The city also accused the county of reviewing the project in a piecemeal fashion, evaluating individual pieces instead of the whole. A case management conference is set for June 2, 2026.

Developer files federal countersuit against city

In January 2026, IVCM fired back with a federal civil rights lawsuit against the city of Imperial and four named officials.

The suit alleges city officials carried out a coordinated campaign to obstruct and retaliate against the project.

Rucci accused a city council member of working with outside groups to use environmental law as a tool to block economic growth.

The lawsuit also claims the city’s actions have blocked nearly $73 million in one-time tax revenue and thousands of jobs.

IVCM and the county have since filed a joint motion to dismiss the city’s lawsuit, calling it built on “demonstrable falsehoods.”

Mystery surrounds the actual client

Rucci told the county the project was being built for Google, according to City Manager Morita. But a Google spokesperson told SFGATE the company has no involvement in a data center project in Imperial County.

Rucci declined to name the client, saying only that it is backed by “one of the four hyperscalers,” a term for the largest tech companies. No company has publicly confirmed a commitment.

The lack of a confirmed tenant raises questions about the project’s long-term future and the promises developers have made to the community.

Reclaimed water plan draws skepticism

The developer says the data center would run entirely on reclaimed wastewater, not fresh water, and would not touch farming or residential supplies.

Rucci proposed buying six million gallons of reclaimed water per day from the cities of Imperial and El Centro.

But El Centro has said it has not entered into any agreements with any data center developer about reclaimed water or wastewater use.

Rucci also claims the facility would send treated water to the Salton Sea, helping reduce air pollution from the drying lake. Critics question whether those commitments are binding or enforceable.

Salton Sea already threatens residents’ health

California’s largest inland lake has been shrinking for decades, exposing toxic lakebed that sends dust into the air.

Communities near the Salton Sea have childhood asthma rates of 20 to 22 percent, far above the California average of about 14.5 percent.

Studies by USC and UC Irvine have linked dust from the receding shoreline to reduced lung function and more respiratory symptoms in children.

Residents fear data centers will add more strain to an environment that already threatens their health.

Nearly all census tracts in Imperial County rank among the top 20 percent most vulnerable to pollution in California.

Communities nationwide push back on data centers

The Imperial Valley fight is part of a growing movement from Virginia to Oklahoma to Ohio, where communities are pushing back against AI data centers.

In December 2025, more than 230 organizations called on Congress to impose a nationwide moratorium on new construction.

Between April and June 2025, more data center projects were blocked or delayed than in the two previous years combined.

Residents in many states cite rising electricity costs, water use, and loss of farmland as key concerns. A Carnegie Mellon study found data centers could raise the average U.S. electricity bill by 8 percent by 2030.

California struggles to regulate the boom

In 2025, State Sen. Padilla wrote a law directing regulators to study whether data centers are driving up electricity costs for other customers, with results due by 2027.

Gov. Gavin Newsom vetoed a separate bill that would have required data centers to publicly report their water usage.

Padilla introduced a new bill in 2026 that would require all new data center projects in California to undergo environmental review.

The bill would also clarify that data centers do not qualify for CEQA’s “advanced manufacturing” exemption.

In July 2025, President Trump signed an executive order to speed up federal permitting for data centers, though it does not override state laws like CEQA.

Both sides head to court in 2026

The county is one vote away from its final decision on the IVCM project, according to KPBS reporting. Rucci has said he expects to break ground in 2026.

The city’s lawsuit and the developer’s federal countersuit are both moving through the courts.

A grassroots group called NIMBY Imperial has gathered thousands of signatures opposing the project, with about 50 active volunteers.

The outcome could set a precedent for whether other developers follow to the valley or whether communities can slow the AI data center rush.

This article was created with AI assistance and human editing.

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