For more than a year, a mammoth $10 billion data center project has been quietly moving forward in the heart of California’s Imperial Valley.
The nearly-one million-square foot computing warehouse is intended to power artificial intelligence development for one of the country’s biggest tech companies. By some estimates, it could rank among the largest data centers in the world.
The facility could consume almost double the amount of electricity that the entirety of Imperial County used in 2024, according to state data and estimates shared by the project’s developer. It could also need 750,000 gallons of water per day.
Despite those immense demands, the project’s developer is openly seeking to avoid California's formidable environmental review process. In interviews, Huntington Beach-based lawyer and businessman Sebastian Rucci said he is aiming to begin construction as soon as possible.
“The demand has increased exponentially,” Rucci told KPBS last month, referring to the clamor for AI computing power. “Our whole goal is speed.”
Rucci and his supporters are pitching the data center as an economic boost for the poor, majority-Latino county. They argue it would provide needed tax revenue for the county government, create local demand for the wealth of renewable energy that the Imperial Valley produces and produce a burst of construction work in a region where jobs are hard to come by.
They also say they will take steps to reduce the project’s environmental footprint, including by using recycled water.
But for many Imperial County residents, the lack of a formal environmental analysis for a facility of this size has raised serious questions. A growing number fear Rucci and county officials are advancing a project that will strain the rural valley’s power grid and water supply with little benefit for the people who live here.
“I think it makes sense that they came to our neighborhood,” said Kathia Olivas, a 22-year-old substitute teacher and organizer who lives in the city of Imperial, blocks away from the planned data center. The developers, she believes, “see us as easy to exploit.”
Rucci also has a history of problems with some previous business ventures. At least two of them have faced state or federal investigations — one of which included allegations of money laundering and a pattern of corrupt activity, KPBS found. The other, a treatment center for drug addiction in Ohio, had its certification revoked by state health officials.
Yet, plans for the project are advancing swiftly through the county approval process. Imperial County Planning and Development Services Director Jim Minnick said county officials had just one public vote remaining before construction could begin.
“From a land-use perspective, there is no other requirement,” Minnick told KPBS last month.
Data in the desert
The proposed data center is part of a nationwide AI infrastructure boom that is becoming increasingly controversial. Major tech companies are racing to expand their AI capabilities, and more communities are pushing back over the environmental costs.
Data centers have been part of the infrastructure of the internet for a long time. But they are essential to the ambitions of generative AI companies, which require unprecedented computing power to develop and run complex programs like ChatGPT.
In order to power that hardware and keep it cool, most data centers require massive amounts of energy and water. As the major tech companies pour billions of dollars into expanding the number and size of their data centers, researchers say their impact on those resources is a major concern — especially when they are already under stress from climate change.
Right now, most data centers in the United States are concentrated in Virginia and other urban centers across the country. But industry groups say more developers are now looking to rural areas, where land is more affordable and the projects may face less resistance.
“That can incentivize developers to move to those areas if they're able to connect and come up to power more quickly,” said Khara Boender, a policy analyst with the Data Center Coalition.
On its surface, the Imperial Valley appears to have plenty of land and resources.
The rural border county was California’s third-largest producer of renewable energy in 2024. Farmers in the valley also hold some of the oldest legal claims to the Colorado River, which give them the power to siphon huge amounts of water from the river every year.
For many of the Valley’s 180,000 residents though, that picture is more complicated. Power outages are a frequent occurrence, especially as demand soars during the blazing summer months. Access to clean water, too, can vary widely depending on where people live, and local officials often urge residents to cut back their water use.
“We've always been told to conserve,” said Francisco Leal, an engineer who lives right next to the planned data center site. “Year after year, you see that there’s a drought and the water is running low.”
A developer with a turbulent past
It was a little over a year ago that Sebastian Rucci decided he was going to join the data center gold rush.
The bespectacled entrepreneur and lawyer speaks with an air of assurance. His law office is based in the wealthy suburb of Huntington Beach, but he lives more than 100 miles east on the outskirts of Palm Desert. As we spoke over Zoom last month, golf carts meandered past a manicured green out the window of Rucci’s home office.
That confident air, though, is at odds with Rucci’s turbulent business history. Across the country in Ohio, his previous business ventures have left a trail of criminal investigations and legal complaints.
In 2010, local county prosecutors charged Rucci and several other people with money laundering, promoting prostitution and perjury at a night club which he owned in the Ohio city of Youngstown, state court records show.
The felony charges against Rucci and the others were eventually thrown out, some because the case took too long to go to trial. Rucci was convicted of selling beer at the club with an expired license in 2014. He served 30 days in jail.
Rucci pivoted, starting a hotel-turned-treatment center for drug addiction called California Palms at the same location. (He originally had plans for an inn named Hotel California but was sued for trademark infringement.)
Ohio health officials inspected the treatment center and found staff had provided false information about the facility’s clients and staff, falsified signatures, broken various health care protocols and failed to provide an appropriate amount of treatment in some cases, according to a 2021 state report. State officials revoked the treatment center’s certification, which led to termination of the center’s Medicaid contract.
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That same year, the FBI began investigating Rucci and the treatment center, federal court records show. In October 2021, federal agents raided the center and seized over $600,000.
Federal officials never charged Rucci or the treatment center with any crimes. Rucci sued the government for the confiscated funds, which they eventually returned with interest. He is currently seeking copies of the warrants in an ongoing legal case, and recently won in an appeal.
In an interview with KPBS, Rucci said he was unfairly singled out by local officials in Ohio in these cases. He said he and the night club were investigated for political reasons, and he argued that state health officials had given federal authorities misleading information about the treatment center.
“It was all politically-motivated,” he said. “I won them all but one.”
Rucci also disputed state health officials’ report on the treatment center, saying that it was one-sided. He added that the treatment center provided a significant amount of free care to military veterans.
Rucci did acknowledge that the center was not prepared for the rapid growth they saw early-on.
Those setbacks haven’t stopped Rucci from continuing to branch out. Most recently, he said, he had been trying his hand at housing construction in Imperial County, using a state tool that gives developers the power to override local zoning laws.
It was there, Rucci said, that he learned about the availability of renewable energy and land in the valley — and the potential for data centers.
“I think Imperial County is a great opportunity,” he said. “They have a lot of renewable energy down there. They have a lot of potential.”
‘Our whole goal is speed’
Rucci did his research. In September 2024, he filed documents with the state creating a company called Imperial Valley Computer Manufacturing.
Together, he and his friend Hector Casas began mapping out potential locations for a data center in Imperial County. They spoke with Casas’ brother-in-law, who works at the energy firm ZGlobal, to learn more about the power infrastructure needs.
“I could see he was very sharp,” Rucci said. “He, of course, could get the sense of my knowledge.”
But Rucci also had another goal in mind: to plan the project in a way that would allow it to avoid facing an environmental analysis under the California Environmental Quality Act (CEQA), the state’s landmark environmental protection law.
CEQA requires state and local governments to study the possible environmental effects of development projects and get public input. It also requires developers to reduce or make up for those impacts — and allows people or groups to sue if they say an environmental study wasn’t detailed enough.
Critics of the law often accuse it of dramatically slowing down construction of projects like new homes. Rucci, too, worried about getting into a drawn-out review process without knowing whether he would be allowed to build the project in the end.
“Hyperscalers are looking for friendly territory,” he said, referring to the world’s largest tech companies. “California's not really a place that people would say is friendly. But unlike others, I believe that I can get it done.”
To avoid those CEQA requirements, Rucci aimed to design a ministerial project — a planning term that essentially means local officials have no option to deny it as long as the technical requirements are met. Under state law, ministerial projects are typically exempt from environmental reviews.
“That is not sneaky,” Rucci said. “That's just smart.”
(In a later email, Rucci added that he also believed their project had a second exemption under a state law passed in June, which excuses “advanced manufacturing” facilities from environmental review if they’re on land already-zoned for industrial use.)
Rucci and Casas focused their search on land that was already zoned for industrial activity and where data centers were a permitted use.
They ended up with around a dozen parcels of suitable land strung along the S-Line, a high-powered transmission line that carries electricity in and out of the valley. They were in three areas, Rucci said: the county seat of El Centro, unincorporated county land and the small city of Imperial.
Rucci approached the city of Imperial first. But city officials pushed against Rucci’s claims that the project could avoid undergoing an environmental review and the public input requirements..
“For a variety of reasons, we didn't agree with (Rucci’s) analysis,” Imperial City Manager Dennis Morita told KPBS. “It was important to our Council that the neighbors had a voice in that process.”
In August, after months of discussion, Rucci withdrew his proposal.
Then he went to the County of Imperial. Rucci proposed a similar project, but one that was significantly larger and would be located just down the street on unincorporated land, next to two residential neighborhoods and a U.S. Border Patrol station.
County planners agreed with Rucci’s terms. Within months, they began to clear the way for his company to start grading the soil.
Environmental impacts contested
Despite their efforts to steer clear of an environmental review, Rucci argued his company has taken significant steps to reduce the data center’s impact on Imperial County’s water, air and energy.
When it comes to water, Rucci also says the data center would rely entirely on reclaimed water, or municipal waste water that has been purified by a sewage treatment plant.
Last month, he told KPBS he had reached an agreement to buy a total of 6 million gallons of reclaimed water daily from the cities of El Centro and Imperial — and that his company would pay for the necessary infrastructure upgrades. The data center itself, Rucci said, would use an eighth of that amount, or around 750,000 gallons per day. The remainder, he said, they would release into the drying Salton Sea.
The developers had also prioritized natural gas generators for backup power over dirtier, diesel-powered alternatives, Rucci said. The planned data center would have two backup systems: the generators and a massive set of batteries.
Rucci said the Imperial Irrigation District (IID), the regional energy utility, had studied his proposal and believed they could handle the increased load. He shared copies of three feasibility studies, which showed that District officials had looked at whether they could support data centers of various sizes.
But local government officials have cast doubt on some of Rucci’s plans.
El Centro and Imperial officials both said they had discussed the possibility of providing reclaimed water but denied formally agreeing to it. In a press release last month, El Centro officials acknowledged that the project’s developers had approached them to ask about water service. But they said the city had not signed any agreement.
“Any entity expressing interest in locating within El Centro or acquiring services from the City must undergo a formal, transparent, and thorough review process,” city officials wrote.
IID officials raised questions about whether they could meet the data center’s energy needs. In response to questions from KPBS, a spokesperson wrote that Rucci’s estimates for power would represent “a massive increase in overall electrical load.”
“While studies are still underway, IID can say that its current infrastructure would not be sufficient to serve an increase in load of this magnitude,” wrote IID spokesperson Robert Schettler in an emailed statement.
IID officials also did not have many answers about how the planned data center might affect the cost of energy for Imperial County residents. Utilities often need to make expensive upgrades to handle the intense energy demands of data centers, costs which they sometimes pass on to consumers.
Last year, researchers at Carnegie Mellon University and North Carolina State University found that data centers could increase the average cost of producing electricity by 8% nationwide.
Schettler said IID did not yet have a roadmap for charging such a large customer.
“At a minimum, IID is pursuing a framework that is ratepayer neutral, and where feasible, one that helps reduce the burden on existing ratepayers for needed system upgrades,” he wrote.
‘At the end of the day, it’s power and water’
That uncertainty has rattled many Imperial County residents, especially those who live close to the planned data center. In recent weeks, they have criticized the lack of environmental analysis and questioned how county officials vet new developers.
Francisco Leal, the engineer who lives next to the planned data center site, has been left feeling like the project’s developers aren’t providing a full picture.
“They’re not telling the complete story,” Leal said. “They can promise a lot of things. But until there are binding documents, all of those are just assumptions.”
Leal and his wife moved to the city of Imperial looking for a quiet place to raise a family. Both engineers, they met in school at the Instituto Tecnológico de Mexicali, just across the border. Afterwards, they found the perfect home, nestled between farm fields in the southeast corner of the city.
Now, as a parent, Leal worries about what the data center would mean for the home his children have grown up in — and for life in the Valley as a whole. He worries the project could lead to more energy outages and put more stress on the water-stricken region.
“It's in the Valley, and that's why this issue matters,” Leal said. “Because, at the end of the day, it’s power and water.”
News of the data center has exploded across the rest of the valley too. Many residents and environmental activists have fiercely opposed it, flooding the county’s December public meetings. More than 2,000 people signed an online petition against the project.
Kathia Olivas, the substitute teacher and organizer, lives with her parents just a few streets away from Leal. To her, the data center plans echoed the long history of companies and industries seeking the Imperial Valley’s water, energy and labor.
“Historically, we've been a very abundant population, and a very exploited population as well,” she said. “We need to stand two feet on the ground and say, ‘No.’”
One of the data center’s key local consultants, Tom DuBose, also offered to buy the homes of people living nearby — an offer that struck Olivas as deeply offensive. She said her parents have worked hard for their home and chose it carefully.
“It’s not just a house,” Olivas said. “People buy these houses in this community … to bring stability to their families.”
Some local officials have thrown their weight behind the project. Timothy Kelley, president of the Imperial Valley Economic Development Corporation, said another potential data center developer had recently canceled their plans because they could not see the project getting up and running quickly.
“If we continue down that path, there will be nothing for the Imperial Valley,” Kelley said at a recent Board of Supervisors meeting.
The county has largely declined to answer KPBS’ questions. County spokesperson Eddie Lopez declined or did not respond to repeated requests for interviews last month.
‘I’m going nowhere’
The question now is whether Rucci’s plan to avoid environmental review will hold up against widening public and legal scrutiny. Across the nation, data center projects are increasingly facing backlash over what many see as giant tech firms’ disregard for local communities.
The city of Imperial is currently suing to challenge the project and Rucci’s plans.
In a lawsuit filed in early December, the city accused county planners of violating CEQA and local laws at several different junctures. They said certain elements of the project, including the proposed battery system, were not ministerial and would need to go through an environmental review.
Rucci's company and the county have asked the court to dismiss the city’s lawsuit.
Earlier this month, Rucci also filed his own lawsuit against Imperial city officials in federal court, alleging they had engaged in “a coordinated campaign to sabotage the data center.” In court filings, he said the city had gone back on their agreement to provide recycled water and had “jeopardized” his relationship with the major tech company backing the project — a relationship he said could be worth billions of dollars.
Rucci has declined to say which company is backing the project, although he has referred to Google as the potential tenant in multiple emails and internal memos. (Google did not respond to a request for comment.)
A California lawmaker is also launching an effort to block data center developers from trying to avoid environmental reviews in the future.
Last week, state Sen. Steve Padilla, D-18, introduced a new bill that would require all new data centers projects in California to go through an environmental review. The bill would also clarify that data centers do not qualify for “advanced manufacturing” exemptions.
Last month, Padilla told KPBS he couldn’t see how a data center of the size proposed in Imperial County would be able to avoid the environmental review process.
“I can't fathom a situation where you have, again, just the intensity and scale and what is described in this particular case,” Padilla said. “And then claiming that there is some form of exemption to review.”
Imperial County officials, however, seem to believe the planned data center will survive the growing scrutiny.
Last month, Minnick, the county’s planning and development services director, told KPBS that in their view, county officials had just one public approval remaining before the developers could begin to build. That approval was a vote by the Imperial County Planning Commission on a “lot merger,” a request by the company to join together five parcels into one 75-acre plot of land.
The commission held a first vote on the lot merger on Dec. 18, but it failed to pass. Rucci has appealed their decision, which means the vote is now set to come before the Imperial County Board of Supervisors.
Rucci maintains that he sees the project as a unique opportunity for Imperial County. The region’s energy infrastructure means it can support data centers of a size that few other places in California could, he said.
Recently, he acknowledged that the company had made some missteps in communicating about the project and said they had set out to engage more with residents.
But Rucci said the opposition to the project had not dampened his resolve. In fact, he said, his past experience facing law enforcement raids and fighting investigations in court had made him even more prepared to take on critics in Imperial County.
“I'm going nowhere,” Rucci said. “You can be clear on that.”
