08-04-2025
A company you've never heard of plans to invest at least $1B in the Boise area
Once a small farming town, Kuna may be making a name for itself as a home for big data centers hoping to cash in on Idaho's low electricity rates and nifty sales-tax exemption.
First, the Treasure Valley city drew the interest of Meta, the owner of Facebook and Instagram, which announced in 2022 that it would build an $800 million center in southeast Kuna. Now the city has greenlit a rezoning request for another data center. But not until dozens of residents and a state legislator weighed in.
The at least $1 billion data center, called Gemstone Technology Park, is slated for 620 acres at 3250 S. Locust Grove Road on agricultural land previously owned by Duane Yamamoto, a former Kuna mayor who died in February. Yamamoto was 90.
The Yamamoto family sold the land, which sits roughly six miles west of the planned Meta campus, to Diode Ventures, a Kansas-based infrastructure-development company.
And who will operate the center? A client 'not yet determined,' a representative for Diode told the Idaho Statesman in an email.
At a public hearing Tuesday, April 1, Diode requested that the nearly one-square mile agricultural site be rezoned as industrial for a 'data processing campus.'
On the campus would be the data center, a water treatment plant, and undeveloped land to act as a buffer to neighboring properties to the north, application materials show.
The city previously approved an application to develop more than 2,000 homes on the site. They were never built. Hethe Clark, a Boise lawyer representing Diode, said the data center would be less of a strain than the houses on local resources, including schools, police, and fire.
'The data center will not connect to city water or sewer,' Clark said at the hearing.
Data centers require enormous capital investment. According to Diode's application, this one would be more than $1 billion — at least 25% more than the Meta center's projected investment. Like all data centers coming to Idaho, Diode's will be exempt from sales tax on construction materials and server equipment. And it will be exempt from local property taxes on any investment exceeding $400 million, as long as that investment is at least $1 billion, thanks to a state tax cap on capital investments.
The company is committing over $40 million in direct contribution to some of those local service-providers.
Application materials show that over 20 years, Diode will contribute $10 million to Kuna Police to support additional staff, $30 million to Kuna Fire to build a new fire station, and $500,000 to the Kuna School District to benefit athletics and technology funds.
The centers also require enormous amounts of electricity. At full build-out, the center would consume 600 to 800 megawatts, another Diode representative confirmed at the hearing.
According to an Idaho Power report, one megawatt powers 650 homes on an average day. That means the amount of energy the center is expected to consume could power somewhere between 390,000 and 520,000 homes — about twice as many households as Ada County has.
The Kuna data center is one of several Diode has planned across the country, which are on the rise nationwide thanks to a 'boom in cloud in AI,' Diode's website says.
Clark said the center would be developed in phases over roughly 10 years.
In over three hours of public testimony, Kuna residents appeared torn over the development. According to the hearing's sign-up sheet provided to the Statesman by the city clerk's office, 17 individuals indicated they supported the center, nine were neutral, and 49 opposed.
Some preferred the prospect of a data center, with its promise of hundreds of construction jobs and roughly 100 permanent jobs once built, over that of hundreds, if not thousands, of new homes. The data center was viewed by some as a way to ease the burden of property taxes for homeowners in the city and to avoid impacts to overcrowded Kuna schools.
Many others wanted to preserve the agricultural history of the land and questioned the long-term benefits of the development, as well as its demand for water and electricity.
Kelly Hardy, one resident who testified, noted that data centers consume from 330,000 gallons to 1.1 million gallons of water per day, according to Data Center Dynamics. Other reports show estimates as high as 5 million gallons of water per day.
'Would we take this deal if it didn't come with the checks that are being written by this company today?' Hardy asked the City Council. 'Meaning, would we accept the risks that are coming long-term?'
City Council members, too, expressed differing viewpoints, ultimately voting 2-2 on the application. Mayor Joe Stear cast the tie-breaking vote.
'This area had a development agreement for 3,000 homes,' Stear said in a statement to the Statesman. 'I believe this is a much better use than building that many homes in an urban-wildland interface.'
State Rep. John Gannon, D-Boise, testified that the center would have statewide implications. Gannon told the Statesman in a phone interview that his three main concerns were the property tax cap, the sales tax exemption, and the strain on electricity resources.
By paying property taxes only on $400 million of the $1 billion, Diode would pay roughly $2.4 million a year, based on an estimated 0.006% property tax Gannon calculated from four taxing districts in the area: the city, the county, the school district, and the highway district. Without that cap, Gannon estimated that Diode would have to pay '$6 million for each billion' invested.
'I think the state of Idaho needs to get a lot more out of this than we're getting,' Gannon said.
And when it comes to the 600 to 800 megawatts of electricity, Gannon pointed out that Idaho Power produces roughly 3,700 megawatts for its entire service territory. Idaho Power says it produces 3,500, with summer usage peaking at 3,800, though it buys other producers' electricity to supplement that.
'The concern is, they're going to have to get their electricity from somewhere, and who's going to pay for it?' Gannon said. 'Whether it's going to be spread among all the ratepayers, or whether it's just going to be the data center's obligation?'
Council Member Matt Biggs also pointed to Idaho Power's service capacity at the hearing. Biggs noted that the data center's expected usage would constitute an approximately 15% increase to Idaho Power's total generation.
'That would be a shock to the system,' he said.
Diode is working to complete 'late-stage agreements' with Idaho Power to provide electricity to the center, Clark said at the hearing.
Gannon pursued fixes to his concerns during the 2025 legislative session, which adjourned Friday. One bill would have limited the sales-tax exemption for data centers to only seven years. Another would have required businesses using significant power to cover the full cost of that electricity, rather than Idaho residents, the Statesman reported. Both bills died in the Senate after passing the House.
Diode is moving forward.
'We appreciate the Kuna City Council's confidence in our ability to be good stewards of the land for sustainable growth in Kuna,' said a Diode statement emailed to the Statesman.
'We also appreciate community feedback and will work with city staff and (the Ada County Highway District) to satisfy our commitments to address concerns around traffic and landscape, as we navigate through next steps in the process.'
Responding to follow-up questions, Douglas Self, vice president of Atlas Strategic Communications, told the Statesman in an email that 'Diode doesn't yet have hard timelines but will have more to share soon as plans progress.'
A Diode representative said at the hearing that construction would start in 2026 at the earliest. 'That's aspirational,' the representative said.
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