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Activists including the land-use group 1000 Friends of Oregon have asked a court to intervene to block a slew of data center projects planned near Hillsboro.
A lawsuit filed Monday in Washington County Circuit Court alleges the city of Hillsboro and county officials improperly issued enterprise zone tax breaks to the developers of 17 proposed data center projects.
“Out of public view and in a hurry, City and County staff approved those applications without the required public notice and without authorization or oversight from their respective public bodies,” the lawsuit alleges. The plaintiffs include the state’s largest teachers union, the Oregon Education Association, which is headquartered in Washington County; Tax Fairness Oregon and Tualatin Riverkeepers.
Long the state’s largest data center hub, Hillsboro is home to 21 data centers on 436 acres. But an increasingly vocal contingent has asserted itself online and at public meetings, arguing their local governments bend over backward to attract and appease the data center industry to the detriment of the area’s residents and environmental resources.
“Washington County reviewed the applications we received, consistent with the law,” county spokesperson Sarah Cagann said to Willamette Week in a statement. She declined to further comment. The city of Hillsboro did not immediately return a request for comment.
The Hillsboro Enterprise Zone this year provided $84 million in tax incentives to data centers. The plaintiffs in Monday’s lawsuit argue these subsidies effectively reduce tax revenue for public schools and other services like infrastructure maintenance, parks and public health. The county and city have not yet responded to the allegations in court.
In March, the state Legislature passed House Bill 4084, a moratorium on new enterprise zone incentives for data centers, which in Hillsboro caused a rush of developers to submit applications by the June 6 legislative deadline. The lawsuit challenges 17 contracts made during that rush, many of which extend tax breaks decades into the future. The lawsuit alleges these contracts and other authorizations were signed in recent weeks.
“Unless this court intervenes, more unwarranted tax breaks are on the way for the data center industry in the Hillsboro Enterprise Zone,” the lawsuit reads. “Those decisions will lead to millions of dollars in additional annual tax breaks for Hillsboro data centers at the expense of local taxing districts and public education across the state.”
Defendants in the suit include employees who signed the contracts in their official capacities including Hillsboro’s city manager, its economic and community development director and Washington County’s director of assessment and taxation. Companies that plaintiffs say are behind the projects are also named including Adobe, Dropbox, NVIDIA, Flexential and CoreWeave.
Willamette Week reported this month that the anti-data center movement in Hillsboro is emblematic of nationwide backlash against data centers, a trend that could factor big in the upcoming general election.
