The Real Story- A Column
At last night’s Hillsboro City Council evening work session, City staff presented what was pitched as a decisive first step toward reigning in data center expansion in Hillsboro. Working under Hillsboro Case File No. CDCA-004-26, staff unveiled draft Community Development Code (CDC) changes intended to cap the gross acreage of standalone facilities in industrial zones and reclassify them as accessory uses. On the surface, telling the public that the City is capping standalone data centers at existing built-out capacity sounds like a win. But a close look at the fine print reveals that this entire opening round is an exercise in futility.
By anchoring their regulatory drafting to a narrow, outdated dictionary definition of “Data Storage,” City staff is building a fence around a business model that barely exists in Hillsboro anymore, while leaving a gaping hole for unregulated, ultra-high-density AI Compute Factories to sneak through. The fact is Hillsboro now has 32 “Data Center” buildings with at least a dozen more on the way. But soon most of them will no longer technically be data centers at all.
I testified to this at the 7-7-26 City Council meeting and at previous meetings.
“…you’re going to hear about data storage facilities through the work you’re doing. That is not what we need to restrict. AI computing is the new name. Data storage is the old way. If we restrict data storage, we’re doing absolutely nothing. So please, make sure staff and all of you work on the broad definition of what it is we’re trying to get our hands around.” 7-7-26 tesitfying before the Hillsboro City Council
https://www.youtube.com/watch?v=HRdeQrP1JZ4
The Reality Check: The “Data Storage” Model Is All But Extinct
To understand why staff’s proposed code falls apart right out of the gate, one only needs to examine the master inventory of the 21 Enterprise Zone applications approved during the recent pre-moratorium surge. Hillsboro (Oregon) Data Center Fire Sale Master List of Enterprise Zone Deals
Based on a detailed review of the latest Enterprise Zone deals pushed through Hillsboro City Hall in early 2026, the Herald determined that 29 unique facility addresses are locked into tax abatement contracts, and exactly one facility (a Dropbox backup site on NE Huffman St) is documented as serving traditional data file storage. The overwhelming majority of the remaining contracts, involving operators like CoreWeave, STACK Infrastructure, NVIDIA, Digital Realty, and QTS, are explicitly built for, switching to, or structured around high-density AI compute clusters, $250,000 +- GPU processors, and direct liquid-cooling plants.
Let me state for the record. Getting answers from the Hillsboro Staff can be difficult, and several public records requests have been too costly for the Herald to justify paying for- yes, paying for public records can cost thousands. If the City of Hillsboro Staff wishes to provide information that would help clarify the information we are presented with based on the documents and records we have, we welcome that! We will update any of our stories at any time if such information can be obtained. We do stand by our findings of what we have reviewed.
These facilities do not “store” files, at least not the way we think a data center does. They often draw 50 kW to 150 kW per server rack, up to ten times the power density of legacy cloud storage, and require massive liquid chillers and localized battery storage systems.
Yet, under the definition presented by staff in Slide 5 of last night’s presentation, the master category remains narrowly labeled “Data Storage”. By omitting “AI Compute,” “Machine Learning Clusters,” and “High-Performance Computing” from the core land-use definition, staff has handed corporate real estate attorneys representing big tech firms the ultimate gift: a legal argument that generating artificial intelligence tokens is an “Advanced Manufacturing process,” entirely exempt from the City’s standalone data center caps.
Critical Elements Left Out Right Out of the Gate
Rather than giving the Council a complete legal framework, the Hillsboro staff’s Phase 1 package omits the exact safeguards necessary to protect Hillsboro’s remaining industrial land. The package has the following crucial issues wrong with it:
No Resource Intensity Thresholds: The draft code does not define facilities by megawatt draw (e.g., capturing any use over 2 Megawatts) or cooling architecture, allowing power-hungry compute builds to hide behind generic industrial classifications.
Uncapped “Accessory Use” Backdoor: Staff proposed allowing “Data Storage” as an accessory use across all industrial zones, but failed to include a hard percentage cap on building square footage or site acreage. Without binding job-density performance standards (such as requiring 15 jobs per acre), a developer could build a tiny “manufacturing” shell alongside a massive, multi-megawatt AI engine and claim it is merely an “accessory”.
Pushing Real Protections to “Phase 2”: Mandatory school/wetland proximity buffers, noise decibel limits, green building mandates, and Type III public hearings were all kicked down the road to an unscheduled “Phase 2” study track.
Questions City Hall Must Answer
This leads to uncomfortable, necessary questions about the technical competence and guidance behind City Hall’s economic development team:
Who is advising staff? Has the City of Hillsboro hired independent, outside land-use attorneys, energy grid experts, and thermal engineering consultants who specialize in high-density AI infrastructure, or is staff drafting these technical definitions in an administrative vacuum?
Why the “Inform-Only” strategy? In the official staff memorandum submitted last night, staff explicitly acknowledged that public engagement for this code change is set to the “Inform” level, reserving co-drafting for “targeted stakeholders”. Are those “targeted stakeholders” the very corporate developers and utility brokers benefiting from these definition gaps?
Why refuse to name AI? If staff’s goal is truly to regulate modern digital infrastructure, why oppose adding explicit expressions such as AI Compute, GPU Arrays, and Megawatt Density to CDC Section 12.10.370 before sending this text to the Planning Commission?
KEY POINT: If the staff cannot answer these questions today, if Mayor Pace can not explain these issues today or defend what is happening, and if our City Council can not all state on the record they knew all of this and are OK with leaving all of this out, then this process is out of bounds, nothing more than a ruse, and the public is being duped. The good thing about the good folks of Hillsboro showing up now is that they understand this and they are not having this – period.
What Happens Next
-City staff is rushing this Phase 1 amendment on an expedited 80-to-90-day track:
-August 5, 2026: Measure 56 notices mailed to ~2,100 property owners.
-August 12, 2026: Planning Commission Work Session.
-August 26, 2026: Planning Commission Public Hearing.
If the City Council and Planning Commission allow Phase 1 to pass with an outdated “Data Storage” label and uncapped accessory rules, they will not have solved Hillsboro’s data center problem. They will have merely created the public illusion of containment while leaving Hillsboro’s remaining industrial footprint wide open to unregulated AI expansion.
Now is the time to attend meetings, to be vocal, to write your Council, the Mayor, and staff, and ask them about this definition issue. They heard me talk about it; they know about this. Councilor Sinclair brought it up at a Council meeting within the last month, and Council President Harris told me personally that this was just a start and that he was/is aware of this. Again, failure to change the definition of “Data Storage” while making new laws will get us nowhere- the Industry has already moved on.
My Take: I think that the same people and financial entities who have been playing Monopoly in Hillsboro that brought us to where we are, are the same forces behind the curtain twisting the arms, turning the screws, and making the donations. AI Computing, in their view, is the future of the US, of Hillsboro and the thousands of acres West of Jackson School Road and into North Plains, and a multi-billion-dollar opportunity. They have no intention of letting some loud-mouthed locals in Hillsboro get in their way. Bottom line. The ony question left is will any of our local leaders left stand with us?
It’s not only alarming, but sickening that Hillsboro staff seem bent on duping the public. This is why the Oregon Data Center Defiance people are demanding a state-wide moratorium to gain time for state and local government to come to grips with the non-transparency of the permitting and tax systems around large and huge data centers which are AI computing farms.
This opacity perpetrated by our governing people does not build confidence that residential ratepayers are their first concern, not is preserving prime farmland, nor halting multi-million dollar tax giveaways that even the experts can’t say are effective or needed to attract DCs to the state. It feels like the fix is in.