PREVIEW: Hillsboro City Hall Announces Another Big Wave Of Data Center Sites, And Legal Strategy As Meeting Looms

The Real Story – A Column

BREAKING NEWS: First to Report- Hillsboro has announced more Data Centers, a lot more.  In a major administrative move ahead of tonight’s highly anticipated 6:00 PM City Council Work Session, the City of Hillsboro has uploaded a massive volume of new data, statutory explanations, and updated policy positions to its official website.

The extensive data drop serves as a definitive preview of the probable legal and administrative defenses city staff and legal counsel will present to the public and the City Council tonight.

A close review of the newly introduced language and data on the City’s data center webpage reveals that the administration is shifting its footing, adopting a defensive posture heavily rooted in state statutory mandates. By analyzing these updates now, the community can see exactly how tonight’s meeting will be framed—and where the policy gaps remain.  We think we have what they intend to present nailed down, and so we wanted to give you all a preview.  This may be worthy of some Kalshi bets?

Here is the analytical breakdown of what we think City Hall will present tonight, along with the structural realities behind the data.

1) The “Ministerial Duty” Defense: Shifting Responsibility to State Law

The most significant addition to the City’s official documentation is a brand-new section addressing whether the City Council can require Council votes for Enterprise Zone approvals.

What we think the City will argue tonight:

Staff will state that under ORS 285C.105 and ORS 285C.140, the administration has zero policy-making discretion. They will frame the signing of these agreements as a purely “ministerial” task—meaning that if an applicant checks the state-mandated boxes, staff is legally compelled to sign. The City’s new documentation explicitly states: “City staff have no discretion to deny an application that meets the standards set forth in state law… By law, City staff must approve such applications.”

The Structural Reality: 

While it is likely true, based on this review, that the day-to-day processing of an application is ministerial, this defense overlooks a critical historical reality. The rules staff are bound to enforce are a direct result of local policy decisions. The Hillsboro City Council established the local enterprise zone boundaries and policies. The Council chose to expand the North Industrial Enterprise Zone boundary as recently as 2024, and the local program guidelines have not been comprehensively updated since 2017.

Staff may be bound by the pipeline today, but local leadership built the pipeline.

2) Explaining the 2051 Timeline: The Continuous Investment Loophole

For the first time, the City has provided a public explanation of how a program legally capped at 3- to 5-year tax abatements resulted in contracts extending to the year 2051.

What We Think the City will argue tonight:

The administration will likely explain that state law allows companies to submit separate applications for different phases of a project, and that state law provides no expiration date or deadline by which an approved property must be put into service. They will argue that a contract running through 2051 does not represent a 25-year tax break, but rather a series of stacked, rolling 3-to-5-year exemptions on subsequent computer hardware and equipment upgrades placed into service decades from now.

The Structural Reality:

This admission confirms the exact vulnerability independent watchdogs have warned about: the City’s administrative framework has allowed data center operators to pre-authorize “ghost investments” decades in advance. This enabled tech firms to secure eligibility for future hardware refreshes long before the state-mandated moratorium (HB 4084) takes effect this month.

3. The School Funding Argument: Pointing to Salem’s Formula

To counter growing public outrage regarding the impact of these multi-decade tax abatements on local classrooms, the City has deployed a detailed defense of Oregon’s K-12 School Funding Equalization Formula.

What we think the City will argue tonight:

The City’s new text argues that because local property tax revenues are redistributed through the State School Fund Equalization Formula, the impact of local tax abatements is not felt locally. They state: “Therefore, in a vast majority of districts (including the Hillsboro School District), the impact of the abatement is not experienced locally.”

The Structural Reality:

While the equalization formula does balance funding across districts, this narrative omits the regional macroeconomic impact. When billions of dollars in industrial assessed value are abated in a major tech hub like Hillsboro, the total statewide pool of the State School Fund is directly suppressed. This reduces per-pupil funding for every single school district in Oregon—including Hillsboro’s.

4. The Community Service Fee “Ceiling.”

In an apparent effort to get ahead of demands for higher corporate contributions to offset community impacts, the City has highlighted specific regulatory constraints on local fees.

What we think the City will argue tonight:

The updated documentation explicitly notes that under state administrative rules (OAR 123-668-2000), any additional financial requirements or economic costs imposed on a firm by a local zone sponsor “shall not exceed 25 percent of the tax savings associated with the entire property tax abatement.”

The Structural Reality:

By publishing this 25% cap now, the administration is establishing a legal boundary ahead of tonight’s meeting. They are signaling to reform-minded council members that the City cannot unilaterally increase the Community Service Fee structure to extract greater local mitigation revenues from existing data center agreements.

The Biggest New Reveal in the 6-1-2026 Data Dump – 5 NEW DATA CENTER SITES –

5 MORE SITES ARE COMING!!

The Data Census Update

The City also adjusted its data center inventory. As of June 2026, the City reports 21 data center sites: 16 constructed (346 acres) and 5 in permitting/under construction (124 acres). This is brand new information. 

KEY POINT:   Crucially, the City quietly noted that five additional potential data center sites are planned but not yet submitted for permits, representing another 177 acres of localized industrial land. 

So we have gone from 18 Data Center sites with 29 actual Data Center buildings to 21 sites with even more actual buildings?  And there are 5 more sites with countless more buildings probably coming?  This information has to be laid out more clearly.  This is only going to wind residents up even more.  There appears to be no end in sight to this madness!

The Verdict Ahead of the Gavel

Tonight’s presentation from staff will be highly technical, deeply legalistic, and entirely focused on the theme of “unavoidable administrative obligations.”

But as the City’s own documentation shows, the current crisis is not a sudden accident of state law—it is the logical outcome of a localized economic development policy that remained un-amended for nearly a decade while the industrial landscape rapidly shifted beneath our feet.

Tonight’s Schedule:

June 2 City Council Work Session Will Focus on Data Centers

All community members are invited to attend the City Council Work Session on Data Centers on Tuesday, June 2, at 6 pm at the Hillsboro Civic Center.  The Work Session will begin at 6 pm and adjourn for the regular City Council Meeting at 7 pm. The Work Session may continue after the conclusion of the City Council Meeting.

Everyone is welcome to attend in-person as room capacity allows, or by watching live online via TVCTV Channel 30 or the City of Hillsboro’s YouTube channel. Public comment is not received during work sessions and will not be received during the June 2 Work Session.  Public comment will be received during the regular June 2 City Council Meeting starting at 7 pm. Visit our Council Meetings webpage for more information on how to sign up to speak or submit public comment during the regular City Council Meeting.

6:00 PM: City Council Work Session (Data Center Policy Review)

7:00 PM: Regular City Council Meeting & Public Comment

Now we wouldn’t want to end the story here with what we think will happen at the work session without laying out two very specific Solutions that we will suggest for the 2nd time to the City Council.  If the Council cares about our Community, as the majority of us residents do, it must act quickly to change our zoning ordinances.  And we will again call for a Tax or Fee, if permitted by Oregon law, to be levied against the Data Centers, which we have forfeited so many hundreds of millions of dollars against our will.  Here is what the City Council can do right now with great haste, and they have the legal precedent to do both because they already are.  Have a read-

SOLUTION #1:     How Hillsboro’s City Council Can Immediately Take Charge And Limit or Stop Data Centers

Tonight, city staff will argue that processing these multi-decade tax giveaways is an unavoidable “ministerial duty” mandated by state law. They will tell the council and the public that local hands are tied. But a look at Hillsboro’s own planning history reveals that this defense is a choice, not a legal absolute.

The State of Oregon regulates the Enterprise Zone tax incentives, but the City of Hillsboro controls the land.  Local leadership has the unilateral authority to

• Blockade future data center expansion immediately by utilizing their own Community Development Code (CDC). The blueprint already exists in Case File No. CDCA 001-19 (Jackson East), an official Community Development Code Amendment staff report from August 2022.
• Faced with data center encroachment in North Hillsboro, the Long Range Planning Division successfully rewrote the zoning rules for Section 12.25.300 (I-S Industrial Sanctuary Zone). The 2022 staff report explicitly notes that:

“Data storage, processing and information technology centers uses are to be limited in the Jackson East-South and Jackson East-North Sub-Areas (limited to accessory use(s) to a permitted primary use in the Meek Road Sub-Area and allowed as a primary use in the other I-S Industrial Sanctuary Sub-Areas)”.

• By downgrading data centers from an allowable “primary use” to a strictly limited “accessory use,” the City effectively prevented standalone data-center behemoths from swallowing up those areas.

If Mayor Pace and the council majority truly want to address community anxiety and protect the remaining pipeline, including those five potential data center sites (177 acres) currently waiting to apply, they must act immediately by Emergency Ordinance. They need to direct staff to replicate the 2022 Jackson East zoning mechanism citywide, striking data storage and AI compute facilities as primary allowed uses in all Heavy Industrial (I-P) and Industrial Sanctuary (I-S) zones.

Solution #2: The General Fund Solution: The 1.5% Utility Privilege Tax City Hall Has Failed to Mention ….Yet!

While City Hall plans to use tonight’s Work Session to tell the public that state property tax exemptions have completely tied their hands, they are quietly keeping the curtains drawn on or perhaps do not know about a massive, highly flexible municipal revenue pipeline they control right now: The Municipal Utility Privilege Tax.

Under their explicit home-rule authority and the precedent set by the Oregon Supreme Court in Northwest Natural Gas Co. v. City of Gresham (2016), the City doesn’t have to wait for Salem to act. They can immediately amend Hillsboro’s existing utility framework to capture that remaining 1.5% taxing headroom, targeting it directly at industrial users drawing over 20 Megawatts (MW), for instance.

The City of Hillsboro currently levies a 3.5% franchise fee on Portland General Electric (PGE), leaving local leadership with exactly 1.5% of unused taxing headroom sitting completely untouched below the standard 5% statutory threshold. Rather than triggering a protracted statutory debate over utilities operating “without a franchise,” the City Council can simply exercise its home-rule authority to amend the existing PGE franchise agreement. By adding a targeted industrial customer classification to the active contract, the city can legally enact this change without procedural delay.

To put that 20 MW benchmark into perspective for everyday residents, a typical Hillsboro home draws a continuous average of just 1.2 to 1.5 Kilowatts (kW) of power. A massive data center campus drawing a continuous 20 Megawatts is consuming enough electricity to power roughly 15,000 homes simultaneously. The reality is that a good majority of our Data center sites draw well over 100 megawatts. So 20 MW is a threshold that completely insulates local residential neighborhoods, retail districts, and standard commercial spaces, landing squarely on the massive hyperscale compute footprints in North Hillsboro.

Furthermore, the City does not need to audit or chase the complex out-of-state books of the private equity firms that own these data center campuses. Under the franchise framework, the additional 1.5% fee is calculated directly against PGE’s gross volumetric energy revenues generated from these specific ultra-high-demand accounts. PGE tracks this industrial energy consumption down to the penny and automatically passes local municipal franchise fees directly through onto the data center’s massive monthly electric bills. PGE collects the funds and cuts a check directly to the city’s General Fund.

Unlike restrictive enterprise zone fees that are siloed away into specialized accounts, this utility money goes straight into Hillsboro’s General Fund. If Mayor Pace and the city council want to prove they are serious about mitigating the structural strain these digital warehouses place on our community, they don’t need to wait for Salem to fix the property tax laws. They can wield their home-rule rights, amend the active utility franchise, tap into the industrial grid, and fund our city’s future tonight.

After June 2nd, there will be no more room for excuses, or blaming the State, or asking for a moratorium or more time.  Tonight, we will see if the Council has the political courage to use it. e proceedings and see if the Council chooses to accept this administrative script, or push for structural reform.