The Real Story – A Column
There is a law in physics called entropy—the inevitable decline of any system into disorder. Data Centers. For thirty years, we in Hillsboro thought we were immune to it. We watched Portland struggle with its “doom loop” while we paved our way to prosperity, eventually rising to become the richest city in Oregon. But as I look across the Washington County landscape in 2026, the “Silicon Forest” is hitting its expiration date, and the “Rose City” we once out-competed might be about to turn the tables on us if they listen to some outside-the-box thinking.
A Legacy of People, Not Platforms
My father, Jack Knudsen, was an Athletic Director, teacher, and coach at Cleveland and Franklin from 1960 to 1975. That was a Renaissance era for Portland’s schools. The Rose City had ten major high schools, all of them big and all of them vibrant. They weren’t just buildings; they were the engines of the city’s social cohesion.
After leaving the farm in Hillsboro, I came of age at Portland State in the 1980s while working on my degrees. Those were difficult economic years, but they were also the years Portland took off. Even as the economy shifted, the Rose City shone brighter than ever because the city belonged to the people who lived there. We had a vision for the “living room” of the city—a place where you lived, invented, and belonged.
The Human Math: 150 vs. Machines
Contrast that “people-first” era with the “Human Math” we see in Hillsboro today. I have a 40-acre nursery operation in my real estate files; my paying job has been as a broker and consultant for 43 years. On those 40 acres, they employ 150 people. That is 150 families rooted in our soil. If that nursery had access to even a fraction of the tax breaks we hand out to multi-national corporations, it could employ 300.
Now, look at the 40-acre footprint of a modern data center—the “concrete gulags” being fast-tracked by current leadership. For all that land and hundreds of millions in tax abatements, you get a handful of technicians. We are trading 150 human livelihoods for a few dozen humming servers.
We are subsidizing the silicon while starving the roots.
The Brain Trust in the Shadows
The layoffs at Intel aren’t just statistics; they are a direct hit to our community’s heart. We have a “Brain Trust” of PhDs and world-class scientists currently sitting in their Hillsboro living rooms, sidelined by an industry that no longer prioritizes them. I first raised the alarm about this transition nine months ago in From Fallout to Future: Hillsboro 3.0 – The People’s Era – Needs To Begin Before Intel Falls, where I asked what becomes of our town when the Silicon Forest era finally matures.
From Fallout to Future: Hillsboro 3.0 – The People’s Era – Needs To Begin Before Intel Falls
Our readers aren’t asking for “nebulous ideas.” They are asking for concrete paths: $50,000 micro-loans, grants, and rent subsidies. As our readers Justin, Ryan, and Mary Jo have pointed out in the story comments, they don’t want “nebulous ideas.” They need $50,000 micro-loans, grants, and rent subsidies to turn their brilliance into the next great startup. We have the talent to build competitors to Neuralink or innovate in “hempcrete” 3D-printed housing, yet we are locking them out in favor of “megawatts over minds.”We have the talent to build a competitor to Neuralink or innovate in “hempcrete” 3D-printed housing, yet we are locking them out in favor of “megawatts over minds.” We refuse to offer them anything while we continue to stamp our Data Center after Data Center – we have confirmed we are nearing 30 of them and 1 GigaWatt in daily power consumption.
Portland: The Lady in Waiting
I am cheering for Portland to succeed. Portland rose as a jewel and fell because it lost its way—but its physical assets are irreplaceable. The river, the bridges, the distinct neighborhoods still vibrant and trying to hang on, and that iconic skyline are still there, waiting for the people to return.
Portland leaders: look West and see how we rose while you fell. We won by being faster and more aggressive. Now, it’s your turn to turn the tables.
As the Portland Mercury recently highlighted in their report on how investments in people, not corporations, can jump-start the economy, there is a growing realization that the old “giveaway” model is broken. I know, and many agree, that Portland must convert its downtown offices and retail blocks—the ones sitting empty and silent—into housing people can actually afford. Not just “subsidized” units, but real-world affordable spaces. Imagine 100,000 people living between the Pearl, PSU, and NW 23rd. If you build it, the people will come. They will spend their days, their nights, and their money in the Rose City.
If you build it, the people will come. Between the startup wins and the new residential vibrancy, Portland can come all the way back to that 1980s shine.
Lassoing the Beast – A “Snap-Back” Plan for the Rose City
Hillsboro Mayor Beach Pace recently called me out for flip-flopping on Data Centers, claiming I have railed against them and those who gave away our town to get them here the last decade (led by her), and now seem to be for them. I made it clear that she and the Mayors and Councils before her never gave me or the people of Hillsboro a chance to say no, or we would have. What I did make clear to her was that now that she and her fellow city leaders let them in, I want to tax the hell out of them. Many of us who are awake on these issues want to do that now, and we will direct those millions to invest in our people, help those being forced out by the failing tech sector we brought in during Hillsboro’s 2.0 era, and find a way to save our community. In this way, I am trying to cut off Hillsboro’s fall into the current Portland reality.
So, let me suggest this. Portland is connected to the same trans-Pacific fiber cables serving the Pacific Rim as Hillsboro has which makes it a top US location. Hillsboro is out of power for now- we confirmed that. Maybe Portland leaders need to stop fighting data centers or think about them as Hillsboro does (ATMS) and start engaging with them—on your terms. You have almost no data centers and zero AI hubs. Modernize your grid to host vertical data centers within your existing Industrial fringe areas and brownfield sites. And even in downtown, if the architecture can be cohesive. They can fit within your city, and vertical is the future. And let me be clear: I HATE DATA CENTERS AND AI HUBS -but we can not stop them – just don’t give away the tax base; lasso the beast and beat the dollars out of it.
Here are my ideas for the Rose City to not only profit from Data Centers but also to harvest energy and social benefits that Hillsboro and most rural communities have never even considered. Check this out!
Smart “Snap Back” for the Rose City
If Portland wants to reclaim its status as the “living room” of the Northwest, it has to open its eyes and start seeing them as high-performance urban utilities. Portland can be an example for what other cities can do to “Lasso the Beast.” We must move away from the sprawling, 500-acre waste of land seen in Hillsboro and Eastern Oregon and embrace the Vertical Integrated Model.
Around the world, cities are already proving that when you stack the silicon, you can heat the people. LOOK AT THESE BENEFITS!
1) The Helsinki Model: Heating the Neighborhood
In Finland, the energy company Helen and the data giant Equinix have created a partnership that turns server heat into a municipal asset.
The Success: Waste heat from their Helsinki data centers is captured and channeled into a 1,400km district heating network.
The Result: It provides renewable heat to thousands of local homes.
The Portland Application: Imagine the Fox Tower or a converted Lloyd Center block providing free, carbon-neutral heat to every apartment within a ten-block radius, funded by the very servers in the basement.
2) The Paris “Aquatic” Loop: Public Water Features
During the 2024 Paris Olympics, the city showcased how data can keep a community warm—literally.
The Portland Application: Instead of letting stormwater strain our sewers, we capture it, use it to cool a vertical data center, and then release that warmed, filtered water into public steaming lagoons or heated canals along the Willamette walkway. It turns a “drainage problem” into a year-round attraction for tourists and residents.
3) The Dresden “Smart Heat” Flat
The German company Cloud&Heat has perfected the “Basement-to-Boiler” strategy.
The Success: In Dresden, they installed server cabinets in the basements of apartment blocks to provide 90% of the building’s hot water and 30% of its underfloor heating.
The Result: A record-breaking energy efficiency (PUE) of 1.01—meaning almost zero energy is wasted.
The Portland Application: This is the “Micro-Loan” engine. A data center in the foundation of an office-to-housing conversion pays the building’s property taxes and funds $50,000 grants for the residents living above it.
Rose City Comeback – Data Centers In Portland, Oregon – Hillsboro Herald Graphic
Why Portland Can Win This Round
Hillsboro is currently trapped in a “Horizontal Morass.” They are expanding the UGB, losing farmland, and venting their heat into the atmosphere and hot water into the sewer systems, adding to the warming problems of Rock Creek and the Tualatin River. They are building for 1995 standards. A Heat Island in the Data Center Alley has been documented by METRO with temperatures nearly 2 degrees warmer in the immediate area. And there are all the impacts on wildlife, views, the sense of place, historical and cultural disruptions, and a massive, growing problem of sound pollution. As with any place where Data Centers span miles of land, the outcomes are almost all bad.
Portland can build for 2040. By using Vertical Data Centers equipped with Gravity-Fed Micro-Hydro Turbines (dropping captured stormwater from the roof to the basement), Portland can generate its own power and heat its own people. I am strongly convinced that this is one way for Portland to make a comeback- and I am not suggesting wholesale Data Centers – three or four multi-story Data Centers would make a life-changing difference.
Use those “machine revenues” as a massive, permanent stream to fund what actually matters: meaningful, affordable housing, small business grants and incubators, and investment in the people who are here and can bring the city back- there are thousands of them in your city!
Let the innovators and capitalists work their magic, guided by strong leadership. Look at this closely because right now, I think we all know there is nobody coming to the rescue. The Property Taxes from a 2-billion-dollar data center would generate $50 million in property tax revenues and fund schools, police and fire, parks, education, and innovators. What if there were more of them? And remember, there are also power franchise fees, and a possible revenue stream from a tax or city fee on power usage would be the capper. The little town of Prineville did that, and they are living it up right now. Turns out that Data Centers and AI Compute facilities don’t lose much off their bottom line when such fees are in place.
If Portland realizes that its best asset is its people—and funds that vision by taxing the machines—the “Rose City” won’t just recover; it will reinvent itself. Whatever you do in Portland, accept these as ideas from someone who knows more about Data Centers than I should and who has moved past anger and into the retribution and creativity side of this dilemma.
Editor’s Note: Hillsboro, it is up to us! We have the people, this abundant valley, the resources, and now we have Data Centers. We can tax or assess a fee on our Data Centers to fund the same programs I highlighted in my Hillsboro 3.0 article and in this post. Wall Street won’t miss that revenue, and that is the only way we will have those concrete gulags contribute to our community! That is how we can generate the funds that we can use to give our talent pool a chance to see what they can do – and make sure that our community stays financially healthy for decades to come.
WHAT DO YOU SAY? WHAT ARE YOUR BEST IDEAS?
📩 Email us at: hillsboroherald@gmail.com
💬 Or comment below the article.
📣 We’ll feature select responses in future Herald stories and podcast episodes.
This isn’t just about surviving the layoffs—it’s about deciding who we want to be next.
READ MORE ON THIS TOPIC:
Hillsboro’s Future: Hillsboro 3.0: The People’s Era Must Begin
Portland’s Pivot: Investments in People, Not Corporations (Portland Mercury)
Dirk Knudsen is a 43-year veteran real estate broker, journalist, and local historian who has spent a decade investigating the intersection of land use, data center expansion, and community displacement in Washington County.
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