Hillsboro Needs More Economic Development.. For Who?

Guest Author:  Jacob Roloff ~ On March 10, there was an event (at Hillsboro City Hall)  with Hillsboro Mayor Beach Pace, State Representative Hai Pham, and Washington County Commissioner Jason Snider. They called it a “town hall”, even though the officials spent 45 of the 75 minutes giving their own presentations of their accomplishments over the year. 

The town hall also, strangely, required an RSVP with 3 question boxes to fill out for pre-screening. The belief was that these questions would take up the bulk of the meeting and drive conversation. However, after the nearly hour-long introduction, Mayor Pace read only one of them before opening it up to questions from in-person attendees.

It became obvious that the issue on most people’s minds was the failure of SB (Senate Bill)1586, which would have reallocated 1,700 acres of farmland for tech development, and the question of why our Mayor supported that bill.

Several people spoke up about the history of this parcel and the so-called Grand Bargain of 2014, which should have solidified its status as rural reserve farmland until at least 2065. Despite this, the city has tried more than five times to bring those acres into the UGB for industrial development. 

When Dirk Knudsen, maybe the loudest local on this issue, spoke up, Mayor Pace’s demeanor took an annoyed turn. She ignored his questions and accused him of spreading misinformation, and asked him to commit to not doing so in the future, although she did not specify what information exactly. His questions were regarding records of Enterprise Zone benefits to the commissioner, and to the representative, he asked what exactly is in it for Oregon to be so deferential to these data center companies; what are we getting in return for so much land and so much tax abatement?

To be fair to Rep. Pham, he did not sponsor this bill and appeared not to support its general spirit, either. Nevertheless, he made some dubious claims in defense of it. All three panelists in their fallback answers emphasized the necessity to encourage “economic development” because of the dire budget situation that the county and the state find themselves in. That term, however, seemed to them to be a euphemism for the city and state’s myopic deference to data center owners, i.e., economic development looks only one way to them.

We give these companies hefty tax breaks, PGE gives them a discount on power usage many times lower than residential users, and we have made repeated efforts to give them ever more farmland for their “development”. Regular citizens are tired of seeing these data fortresses use up so much of our resources for so little in return.

When the prospect of raising those taxes was mentioned, Representative Pham began to talk about how we would not be considered a business friendly state, and we should be careful with such efforts. At the moment, however, many of the data center operators in Hillsboro have a section on their website emphasizing the attractiveness of Hillsboro specifically, due to our unique tax situation and the apparent willingness by local lawmakers to sweeten the deal (Hillsboro Data Center | NTT). 

Representative Pham positively noted the Oregon POWER Act of July 2025 as well, and its stipulations that PGE create a new customer bracket for data centers, and charge them accordingly for grid upgrades linked mainly to their high usage rates. He failed to mention that so far, PGE has all but ignored that Act, or the state is not enforcing it. They instead created a toothless internal policy to charge data centers for 3 years out of the 50 in their investment return schedule. Residents will resume contributions for the remaining 47 years.

Not only are we an industry-wide target for development because of land accessibility and taxes, but we also have 8 undersea fiber cables coming into our coastline, and straight through to Hillsboro’s data center “ring” — a term referring to multiple levels of redundancy in our data thoroughfare, preventing disastrous disconnections worldwide. In short, data centers will not leave (and indeed will not be scared away) anytime soon, even if taxes are increased. This idea and fear of capital flight is not founded in reality, except, mainly, flight from political donations accounts (Why We Should Stop Worrying About Wealth Flight).

The idea of taxing data centers is not radical or new—not even in Oregon (Data centers’ small-town tax breaks bring Silicon Valley to rural America). Prineville charges a franchise fee (something Hillsboro opts not to do) of 5 percent on data centers’ power bill. Franchise fees—also known as right-of-way fees—are charged by a city to private companies like PGE for running power over, under, and through city property. From the above article: “Facebook’s electricity use may be the biggest single boost to Prineville – it spent $12 million on power last year, generating $600,000 in franchise fees”.

There is also a state law which caps increases to tax assessed value of property at 3 percent per year. That rate, although firmly entrenched in Oregon law since 1997, is worth looking at and adapting it to the special quality of data centers as an industry, and considering the extreme speed of their economic growth (Data center capex to hit $1.7 trillion by 2030). 

However, data centers also participate—crucially—in an industry ecosystem that many believe to be a bubble (When the AI bubble bursts). While these companies rake in profits during the meteoric rise in their value to the tech economy, cities and states can’t be left scratching their heads when the chickens come home to roost and we are left with bankruptcy claims instead of a tax boon we thought was anywhere from 3 to 15 years in the making (What Are Oregon Enterprise Zones). 

Hillsboro has many options, and many more present themselves daily in the growing nationwide ambivalence toward data centers. The panel this evening (I don’t think “town hall” describes it) spoke paternalistically to the small crowd as if they knew what was good for the community, just as the community was trying to tell them otherwise. We just weren’t understanding the “economic benefit” of prostrating our city to international capital while our officials complain of budget deficits. 

I don’t think anyone relates to that vision for our city. The mayor seemed more worried about offending these companies (who will not abandon these fiber cables), than the community members in the room with her. This is an important issue for our city, and it should not leave our sights over the next year, especially as worries about our local budget persist.

Visit Jacob’s Family Farm Facebook Page and check out all that they have going on!  Look for regular contributions from Jacob in the coming months as he is a guest Author for the Hillsboro Herald and has been featured here in the past!

https://www.facebook.com/p/Helvetia-Gardens-100089793965932/