‘This data center will come.’ The fight over California’s largest AI development

When lawyer Sebastian Rucci first eyed 75 flat, wind-swept acres by Aten Road and Clark Road outside the desert city of Imperial, he saw something more: potential.

He saw the empty piece of land set amid the green-and-brown checkerboard of Imperial County farms as the future site for the largest data center in the state, and one of the largest in the nation.

A nearly 1 million square foot building would house rows of constantly whirring computer servers powering the colossal energy needs of the artificial intelligence industry. He said it could be the first of several data centers spread across the sun-drenched county, bringing jobs and economic development. 

Rucci at first glance may seem like an unlikely developer of such a massive site. In Ohio he once owned a strip club and later a rehabilitation center, and clashed with local and state authorities over both. 

Now he has a fight on his hands in Imperial County.

The site is adjacent to two residential neighborhoods with hundreds of homes and less than a mile from playgrounds and schools. Many neighbors don’t want to trade their tranquility for a potential mix of higher electric bills, noise, air pollution and water supply concerns. The county has very high unemployment and among the lowest median individual incomes in the state. 

Imperial city officials have concerns of their own, including noise, hazardous emissions and possible fires, explosions and toxins, which they outlined in a 231-page complaint in court.

Now, a group of residents is gathering signatures for a potential November 2026 ballot initiative that would block data centers in Imperial County altogether. They’re calling it the “Imperial County Data Center Prohibition Act.”

Data center controversies like the one in Imperial County are playing out nationwide. Tech giants like Amazon and Google are racing to build the massive computing power needed to feed Americans’ insatiable appetite for instantly accessible information. But communities are pushing back, and a growing number of policymakers are urging caution. 

Last month California’s Little Hoover Commission – an independent oversight agency – issued a 46-page report examining these facilities in a state with some of the nation’s highest electric rates. It noted “the rapid growth of energy-intensive data centers presents both a serious challenge and a potential opportunity for California’s electricity system.”

The report made 15 recommendations for policy makers covering cost, regulations, load on the electrical grid, impacts on the environment and general oversight. 

It cited Rucci’s project at the bottom of page 19: “While the developer has asserted that the facility would rely on renewable energy and recycled water, these claims have been disputed, and it is unclear whether such commitments would be legally binding.”

It also said, “County officials are considering approval of a proposed 330-megawatt data center, but city officials and local residents have stated that they were not adequately consulted and that environmental review was insufficient.”

Rucci is undaunted. Residents oppose the Aten Road project without a robust environmental review, but Rucci contends that is not required – that the zoning for the property allows data centers, and all he needs are permits from the county.

Imperial County officials could OK a lot merger for the project at a Board of Supervisors meeting this week, but Imperial city officials want more public input and have tried to sue the county to get it – so far, without success.

“My plan, bigger picture, is to stay here,” Rucci said. “This data center will come. And then to stick around and do more here. I’m not running away.”

Born in Italy with degrees from Youngstown State University in Ohio and Western State School of Law in Irvine, Rucci’s path to Imperial County has been circuitous. After decades negotiating land deals, the 65-year-old views Imperial County as the premier place in the state for a project like this, and he imagines others. He controls one other site nearby.

As a lawyer, he runs a website dedicated to regaining assets seized by the federal government. He has successfully waged land use battles to pave the way for housing developments across the country. He once appeared on an episode of “American Greed” after representing numerous victims of a sweeping financial fraud.

He’s also been tangled in government investigations twice.

“It’s got a lot of color,” he said, referring to his own story. “Let’s see. We got strippers. We got indictments. We got environmental. We got all of it.”

A nightclub he operated in Ohio was the target of local prosecutors who indicted him and others on a variety of criminal charges. Later a rehabilitation center he founded went into bankruptcy after state officials pulled its license and the Department of Justice seized some $600,000 during an investigation into alleged Medicaid fraud.

Rucci fought back both times, and won.

He was dismissed from a case involving dancers at the club, and two perjury charges were eventually dismissed because prosecutors waited too long to bring the case to trial.

The rehabilitation center money the DOJ seized was returned to Rucci with interest three years after it was taken. It was an extraordinarily unusual step by the federal government in asset forfeiture cases – and an example of Rucci’s tenacity as a litigator.

A national debate in Imperial County 

Now, Rucci is a player in the divisive national debate over data center construction.

Supporters tout their technological benefits in an increasingly digital society. Opponents express alarm about the possible long-term impacts on communities, largely because of the huge electricity demands needed to run them, the water demands needed to cool them, and noise and other impacts surrounding them.

Nearly 300 data centers of varying sizes operate statewide, mostly in Santa Clara and Los Angeles, and others are in the pipeline. Pacific Gas & Electric, one of the state’s three major investor-owned utilities, said in July the projected data center demand for grid connections just in its area exceeded 10% of the state’s total generation capacity.

Nationwide, trillions of dollars are being pumped into data center construction, and a 2025 report by Lawrence Berkeley National Laboratory projected that data centers could account for some 7% to 12% of total U.S. electricity consumption by 2028.

Rucci said Imperial County is unique in California.

“You could study the grid, but I believe the only place in California that would ever have something like 700, 500 megawatts on the line … is here. This is it.”

Given how much energy they can devour and their potential impacts on public health and quality of life, data center projects like Rucci’s can benefit from community buy-in for what will be a decades-long venture, said Evelyn Carpenter, president and CEO of Invera Energy, a renewable energy industry consulting firm.

“You have to take the time and be a partner to a community, whatever that looks like, with the realization that you’re going to be there a long time,” she said.

The central disagreement in Imperial County revolves around public participation.

Neighbors and other opponents, including state Sen. Steve Padilla, want a public analysis of potential impacts undertaken via the California Environmental Quality Act, or CEQA. The city of Imperial has gone to court, so far unsuccessfully, to force that review. A prior petition in the lawsuit was dismissed but the court allowed the city to submit a second, which it did March 11.

Padilla has introduced legislation to subject all future data center projects to CEQA. Rucci contends his project does not fall under the purview of CEQA because the land is zoned for industrial use, and a data center is listed as an allowable use under county regulations. 

In addition to arguing the law is on his side, Rucci said CEQA is too often used to block or delay developments, a common criticism. And he pointed out that last year Gov. Gavin Newsom signed CEQA-reform bills aimed at reducing the timelines for environmental reviews and limiting the kinds of legal challenges that can be brought.

“It delays, it creates unknowns, and it creates extortion,” he said in a reference to groups that can wring concessions from projects through the CEQA review process.

Initially, he wanted to locate the data center in the city of Imperial, but city officials said they wanted some kind of public process before granting approval. That prompted Rucci to shift to the parcels outside city limits on county-zoned land.

When the county began quietly moving the project along, the city of Imperial began informing residents. A community-led effort against the project going ahead without CEQA has garnered more than 3,400 signatures.

A permitted use or peace going away?

In an interview, Rucci detailed how he has been working on finding a site for a data center in Imperial County since late 2024.

He came to the desert after being contacted by a former law school friend, Hector Casas, who lived in the county. Rucci said at first they spoke about doing what he called land development work, but eventually the talk turned to data centers.

It was a new world for Rucci. 

“I knew nothing about data centers,” he said. “I knew how to buy land. I know how to tie it up. I know how to get permits.” 

He learned more as he went along, poring over land maps and the county zoning code.

He and Casas also began following the S-line, a high-powered transmission line run by the Imperial Irrigation District, the influential water and power provider in the valley.

He had five criteria in mind for a site: power availability, industrial zoning, access to high-pressure gas, access to fiber optic cables, and, preferably, no residences nearby. The Aten Road parcel meets four of those. Several hundred homes border the project.

Two things became clear, Rucci said. One was that the S-line had a huge amount of capacity to power a data center. Shaolei Ren, an associate professor at the University of California Riverside who studies impacts of AI systems and who consulted on the project for Rucci, likened this capacity to an open road.

“If you think of the power capacity as the freeway,” Ren said, “they have a very wide freeway with eight lanes but no cars running on it.”

Second, Rucci found land that was zoned industrial. He said there is not a lot in the sprawling county, but he identified a handful of parcels, and got them all under contract in a series of deals with the owners. Only 7% of the land is zoned agricultural, he said.

He said he named his company Imperial Valley Computer Manufacturing – without a reference to data centers – because he did not want the price for securing the land to spike if the owners knew it would be used for a data center.

Since then, he said he has spent $5 million on studies he claims show the impacts of the data center on power and water supplies will not cripple the grid or drive up costs for local residents. He said the center would create 2,500-3,500 construction jobs, 100-200 permanent jobs, an expanded tax base and a development boom for the county, whose consultant agreed with the full-time figures but estimated it would bring 1,600-1,700 construction jobs.

It is not a facility that his company would construct. That could be done by big tech companies or specialized companies that build and then lease space to tech giants.

“My premise was, I’m not here to write billion-dollar checks. I wouldn’t have that wherewithal,” he said. “I’m not here to build a building that’s way beyond my scope. But you need a packager. … Google told me that they’re not gonna come down here, but they’ll pay a good chunk for you to go do it. So I have to take the risk to go do it.”

In several 2025 emails to city officials in Imperial, he hinted Google was interested. In a May 30 email, he said he had already agreed to do studies to satisfy city concerns, “demonstrating to Google that this development will move forward without unnecessary CEQA complications.”

When asked by inewsource, a spokesperson for the company said, “We are not involved in a data center project in Imperial County.” Rucci said that is correct – he has no agreement with the company – but he also said he believes Google would “likely” be the tenant of a building that another company would construct. 

Rucci has been upfront about his belief he doesn’t require a full CEQA review.

During the months-long attempt to locate the data center inside the city of Imperial, he made no secret of that with city officials, according to emails excerpted in a federal lawsuit he filed against the city in January. 

“From the outset, I selected the city of Imperial because I believed that our data center would be a permitted use and exempt from CEQA,” he wrote in a July 18 email. 

Rucci shared with inewsource copies of several studies he has paid for to assess data center impacts such as traffic, biology, soils and natural hazards. He also provided a list of 14 data centers approved since 2018 around the state “by right” – meaning underlying zoning allowed data center construction and approval was ministerial, without a CEQA review – and 11 other data centers that received ministerial approval in other states.

None of the California data centers on his list are as large as the one Rucci is proposing in Imperial County.

“This is a chance for this area to do something that they can’t do elsewhere, and take advantage of that,” he said.

Residents living near the project are concerned about the impact the development could have on their health and quality of life. Many have settled in and are worried how the development will change their lives.

Chris Scurries, a high school music teacher and father of a 2-year-old, said that while mitigations can reduce the project’s impact, negative effects would be inescapable, from construction work to ongoing noise, increased traffic and the massive structure itself.

Scurries has spent hours pressing the county for public review. 

He said the county hasn’t responded to all the questions he and his neighbors have posed at board meetings, and that’s been frustrating. He said he found solace in being able to afford a home in the neighborhood after years of living in a noisy apartment.

“All of a sudden, I felt I actually had peace,” he said. “And I’m concerned that peace is going to go away.”

A close look at Rucci’s projects in Ohio

As the face of the project, Rucci is accustomed to discussing his wide-ranging biography and defending it. 

Last month, he filed a defamation lawsuit against KPBS, alleging “character assassination” and other grievances about its story on his project and his past that was published on Jan. 21. KPBS declined to comment.

He sued an Imperial County resident and a local environmental organization and its director for defamation this month. The resident disputed the suit and the organization called it meritless in a statement.

In Youngstown, Ohio, where Rucci went to college, he was an owner of the Go Go Girls Cabaret, a nightclub that opened in 2007. Three years later, court records show he and several others were indicted by local prosecutors on an assortment of alleged crimes, including engaging in a pattern of corrupt activity, money laundering and promoting prostitution.

Those cases collapsed when the vast majority of charges were dismissed after a ruling there was no prostitution going on at the club. Perjury charges remained but prosecutors never pursued a trial, leading those charges to be dismissed because Rucci’s constitutional right to a speedy trial had been violated.

In a lawsuit he filed against the county, Rucci said the case was the product of a campaign orchestrated by a rival club. Rucci also said that Paul Gains, the county prosecutor at the time, retaliated against the club because one of the cabaret’s owners had challenged Gains for re-election. A federal judge later closed the case. 

Gains, now retired in Ohio, declined to comment. 

After selling the club, Rucci opened a hotel that he soon converted to a rehabilitation center called California Palms. Rucci said the deaths of two siblings from addictions motivated him to offer up to half of the clients free care. The center served veterans as well as others and grew quickly. At one point the center employed 50 people and accounted for 5% of all available treatment beds in the state, Rucci said in federal court filings in Ohio.

That, too, soon ran into headwinds. A Sixth Circuit Court of Appeals’ decision has the history.

In 2021, Ohio state regulators moved to revoke the center’s license, based on an inspection conducted two years earlier just weeks after the center opened. FBI agents raided the center and seized records as part of an investigation alleging Medicaid fraud.

The Department of Justice also seized about $600,000 in funds in California Palms bank accounts. The forfeiture complaint says the center was suspected of “up-coding” charges to Medicaid – billing for services not provided in order to get larger reimbursements.

With no funds or license, and in what a court referred to as an “ongoing legal battle with a creditor,” Rucci filed for bankruptcy protection, seeking to reorganize the business.

He also challenged the license revocation and the seizure warrants. The business was liquidated under orders from the bankruptcy judge, but Rucci fought to win back the seized funds, and to see the warrants the FBI used to raid his business. 

In September 2024, federal prosecutors abandoned the seizure effort, and said they would return the funds with interest. No criminal charges were ever filed.

In a brief court filing, the DOJ said only that “After conferring with investigative law enforcement agents, government counsel has concluded that litigation of the civil forfeiture complaint filed in this matter should not go forward at this time.”

inewsource asked the U.S. Attorney for the Northern District of Ohio for comment, but a spokesperson for the office declined. 

Last year an appeals court ruled that though the government returned the money, a judge still had to rule if Rucci was entitled to see the warrants that justified the search. 

Rucci was convicted of two misdemeanors of illegal alcohol sales without a valid license, and served 30 days in jail. Those convictions led the State Bar of California to issue a one-year suspension of his law license. 

Bar records show the suspension was stayed and Rucci was given a year to pass a professional responsibility test and take six hours of legal ethics classes. When he did not take the test by the deadline, the bar temporarily suspended his license. It was reinstated in 2022 after he took and passed the test.

With the club and the rehab center, Rucci said he was a target of “government abuse” – overreach by government officials with questionable motivations, which he successfully fought off. Now he is arguing in court that Imperial city officials are abusing their authority as well.

Questions about water and power impacts

Concerns over the proposed data center are not only about process, but also about impact – specifically on the water and power usage such massive projects require.

Imperial County is not lacking in power sources. Abundant sunshine feeds numerous large scale solar farms that blanket swaths of the valley floor. Geothermal energy is being tapped in the county’s northern sector near the Salton Sea.

Rucci said the project would rely in part on those kinds of renewable energy sources. Informational materials he provided to inewsource say the Imperial Irrigation District, the local utility, would make money on the deal through a combination of fees for delivering power, operational oversight and a markup on the power it sells.

He said the developers would pay for all costs for upgrading the electrical infrastructure to handle the new requirements and that residents would be protected during heat waves because the project has agreed that its power would be cut first. 

If that were to happen, the data center would then run off its own natural gas power backup.

Robert Schettler, a spokesman for the utility district, said there are no agreements with Rucci’s Imperial Valley Computer Manufacturing and that the project is in a study phase. 

“While potential policy and contract structures are being discussed,” he wrote, “no agreement has been drafted or presented at this time, as the District is primarily focused on identifying and evaluating all potential liabilities and requirements associated with a data center of this scale, including the financial security provisions we would require.”

The water demand in the arid desert is also an issue.

Rucci has proposed obtaining 6 million gallons per day of reclaimed water from Imperial and El Centro to cool the massive data center, which would use 750,000 gallons a day. 

Rucci said the unused water would be funneled into the Salton Sea to ameliorate environmental damage there.

Reclaimed water from both cities is already channeled into the sea, though at a lesser level of treatment, so the project would ultimately result in less water in the sea, according to Dennis Morita, the city manager of Imperial, as well as Michael Cohen, a senior fellow at the Pacific Institute. At this stage of the project, no formal water agreements have been entered into yet. 

El Centro issued a conditional letter in October, saying it would serve the center but noting the letter was not a final water service agreement. The city of Imperial has not committed to a water agreement. The city’s amended complaint says, “In order for the City to supply reclaimed water to the Hyperscale AI Data Center Project, its wastewater treatment system would require significant modifications to generate reclaimed water.”

Property rights vs. community concerns

The proposed data center has received a grading permit from the county, but the county Planning Commission did not approve Rucci’s requested lot merger proposal in a December meeting. 

Rucci appealed that decision to the Board of Supervisors, which plans to consider it Tuesday.

Meanwhile, the city of Imperial is seeking to force a review of the environmental and other impacts through its legal action.

“As strongly as the developer and the county feel that this is a ministerial project, we feel just as strongly the other way, just because of the sheer magnitude of it,” said Morita, the city manager of Imperial.

Rucci has filed his own civil rights lawsuit in federal court, alleging a conspiracy among Imperial officials that he called “a bad-faith campaign of administrative obstruction and targeted retaliation” mounted when he didn’t agree the project needed CEQA review.

Still, Rucci said he’s willing to negotiate aspects of his project. He said the data center is designed to be environmentally responsible, and that any infrastructure upgrades would be fully funded. And he continues to stress that the law gives him the right to build. 

“Rights are rights, property rights are property rights,” he said. “You have them. And the other guys don’t get to take it away because they dislike it.”

That doesn’t mean the project is in the clear. 

The city of Imperial’s legal challenge continues and hundreds of residents showed up at a public hearing at the Imperial County Board of Supervisors last month to oppose Rucci’s plan. The meeting lasted more than four hours and residents filled two rooms and spilled outside.

The county restricted media members from moving around chambers to document the meeting, and would not allow some residents to reenter the hall if they exited. Protesters outside the building chanted “Fuera!” – “Get out!” in Spanish – and were audible from inside it.

Rucci said he had more than 100 slides to present, but residents inside expressed their own frustrations at not being able to ask questions and began chanting, “No data centers!” The interruptions caused the board and the developer to leave the room about 75 minutes into the meeting. Dozens of protesters followed Rucci to his car and continued chanting as he left.

He did not return. The meeting resumed and residents raised concerns for nearly three hours. The next day supervisors announced they would consider the lot merger this Tuesday. 

With summer approaching and the desert heat settling over the valley, the debate over the data center won’t cool down any time soon.