Hillsboro sits at the center of a five-state investigation into how data center developers use legal threats, secrecy and financial muscle to overwhelm small communities across the country.

The Oregonian and Advance Local newsrooms published the investigation Tuesday, Oct. 6, drawing on reporting from New Jersey, Alabama, Michigan and Pennsylvania. The series documents four industry tactics: exploiting outdated zoning rules, offering direct cash payments to residents, filing lawsuits against towns that resist and hiding plans behind nondisclosure agreements.

Hillsboro's experience anchors the Oregon chapter. Just before a state moratorium on data center tax breaks took effect, tech companies filed 17 applications to stack new Enterprise Zone incentives in five-year increments. Some applications would extend breaks as far as 2051.

Council President Rob Harris, a retired lawyer, told The Oregonian the city felt trapped.

"We thought we were going to be sued one way or the other," Harris said.

Hillsboro approved all 17 applications. Residents, conservationists and a sitting council member then sued in Washington County Circuit Court, arguing the city had no authority to grant tax breaks lasting decades. That case remains pending.

Data centers now occupy nearly 500 acres of former farmland in Hillsboro, with 50 more acres under construction. Companies including Adobe, LinkedIn, Meta, TikTok and X operate on those sites, collecting roughly $84 million in local property tax breaks this year. The top 11 tech-company-owned data centers in the city receive an average of $294,000 in tax breaks per full-time employee, according to the Beaverton Valley Times.

Statewide, data center tax breaks top $450 million annually, The Oregonian reported.

Asked in July whether data centers were operating in good faith in Hillsboro and using the breaks as designed, Gov. Tina Kotek told The Oregonian: "No, and no."

The national picture mirrors Hillsboro's struggle. In Saline Township, Michigan, a community of fewer than 3,000 people, the township board rejected a rezoning for a $43 billion Oracle and OpenAI data center. Developer Related Digital sued, and civic leaders settled rather than face the legal costs. In Hazle Township, Pennsylvania, a developer offered $10,000 per household to overcome opposition.

Kate Titus of Common Cause Oregon told The Oregonian the financial gap between tech companies and small towns drives the pattern.

Hundreds of Hillsboro residents packed council meetings over the summer of 2026. The city responded by quietly preparing a moratorium, announcing it on a Sunday morning in July with just 24 hours' notice. Mayor Beach Pace told The Oregonian the secrecy was deliberate.

"We saw what happened with the state and we didn't want to recreate that," Pace said, referring to the rush of applications that preceded the state moratorium.

The council voted unanimously July 27 to enact the 120-day pause on new data center and battery energy storage system (BESS) developments. Harris explained the strategy in a July 27 Oregonian report: "The moratorium was touchy. We filed the application, tried to keep it on the low key, we didn't talk about it at the city council much."

Public opinion has shifted sharply against the industry. A Pew Research Center survey found 60% of Americans would be uncomfortable with a new local data center. In Oregon, a DHM Research poll found 73% of voters oppose data center tax breaks. Both gubernatorial candidates, Democrat Kotek and Republican Christine Drazan, called for statewide moratoriums on Sept. 8.

Oregon's Data Center Advisory Committee plans to issue a final report by the end of 2026, ahead of the 2027 legislative session. A 45-day public comment period on the committee's preliminary findings runs until Oct. 24.