Data center tax breaks are driving Hillsboro's city council races into court and onto the ballot.
Hillsboro City Councilor Kipperlyn Sinclair is among several plaintiffs who filed a lawsuit in June against the city and Washington County, seeking to overturn 17 enterprise zone tax exemptions approved for data center projects. The suit, first reported by OPB, alleges officials rushed to approve the applications before a statewide moratorium on new data center tax breaks took effect. OPB reported the moratorium began June 5; KATU placed the date at June 6.
Sinclair, who is running for the District 4 seat on the Washington County Board of Commissioners, is joined in the lawsuit by 1000 Friends of Oregon, the Oregon Education Association and other plaintiffs. The coalition argues city staff lacked authority to approve tax breaks extending past the life of the enterprise zone program itself, with some agreements proposed to run through 2051, according to the Hillsboro Herald.
"I am formally challenging the EZ Program for subverting its goal of alleviating economic hardship," Sinclair said in a June statement. She argued the program links affluent industrial areas with lower-income neighborhoods to justify tax breaks that benefit data center corporations without uplifting the vulnerable communities used to qualify for them.
The city has pushed back. Hillsboro spokesperson Cindy Dauer told KATU that staff followed all legal requirements and that state law left officials with little choice but to approve qualifying applications before the moratorium.
The lawsuit's political backdrop extends to two Hillsboro City Council races. Karim Delgado, owner of The 649 bar, is running for the Ward 2, Position A seat. Dorian Russell, executive director of HomePlate Youth Services, is seeking the Ward 3, Position A seat. Both are part of a slate of progressive, Democratic Socialists of America (DSA)-aligned candidates running on anti-data-center platforms, OPB reported Tuesday, Oct. 20.
Delgado told OPB that civic frustration has reached a point where the community needs a different kind of elected official. His campaign platform calls for mandatory community benefit analysis before any enterprise zone deal is approved and public disclosure of job counts and wage levels.
Russell, a Liberty High School graduate who leads Washington County's only comprehensive homeless youth services provider, told OPB the county needs leaders with deep community connections and that the region is in crisis.
The races come as the Hillsboro City Council unanimously approved new data center restrictions Tuesday, Oct. 20. The ordinance narrows where standalone data centers can operate, capping permitted acreage at 608 acres across three zones, according to the Hillsboro News Times. Previously, data centers were allowed across roughly 6,600 industrial acres citywide.
Data centers in Hillsboro received $84 million in local property tax breaks last year and employed 284 people, according to Washington County records cited by The Oregonian. That works out to about $296,000 in tax breaks per job per year.
The city's temporary moratorium on new standalone data center development remains in place through Nov. 24. A second phase of regulations covering building heights, buffers and environmental protections is planned for winter and spring. Voters head to the polls Tuesday, Nov. 3, to determine whether Delgado, Russell and other progressive challengers join the council that shapes those rules.
