The fight over data centers in Hillsboro, which until this week has largely been confined to the realms of local politics and protests, has now reached Oregon courts.

The land use nonprofit 1000 Friends of Oregon filed a lawsuit on Monday against Hillsboro and Washington County governments, seeking to nullify tax breaks they’ve recently granted for data center developments.

“To widespread public outcry and without oversight from elected officials, already cash-rich data center developers have been reaping tens of millions of dollars in tax incentives every year,” the lawsuit, which takes the form of a petition for writ of review, states.

Without the tax breaks, these projects would bring in new property taxes for Oregon school districts facing significant budget shortfalls this year, as well as for other local taxing districts, 1000 Friends argued.

1000 Friends of Oregon – which advocates to preserve the state’s land-use system – was joined by Kipperlyn Sinclair, a sitting Hillsboro city councilor and candidate for Washington County Commission; Tammy Carpenter, a Beaverton School Board member and state legislative candidate; local farmers including Jacob Roloff; Tualatin Riverkeepers; and the Oregon Education Association, the state’s largest teachers’ union, in bringing the lawsuit.

Resentment over data centers in Hillsboro — the heart of Oregon’s silicon forest— has been brewing in recent months, at the same time as a broader nationwide backlash has grown against the power-hungry facilities. The resentment reached a fever pitch last month after the Oregonian revealed the city of Hillsboro had recently approved a slew of tax breaks for data centers extending decades into the future.

Those tax breaks come through the state’s enterprise zone program, which is meant to encourage economic development. Without it, new construction can bring significant hikes to property taxes. The enterprise zone program puts those tax hikes on hold for three to five years for qualifying developments.

The lawsuit specifically concerns 17 enterprise zone applications recently approved by Hillsboro. The applications were submitted before June 5, when a state moratorium on new tax breaks for data centers went into effect.

These 17 projects come from eight tech companies — Adobe, Coreweave, Dropbox, Flexential, NTT Global Data Centers, QTS and SI POR03E — most of which already have data centers in Hillsboro.

According to the site Data Center Maps, Hillsboro is already home to 34 data centers.

The applications appear to concern updates to existing data centers and potentially new data centers at three sites: farmland on Jackson School Road, farmland on Evergreen Road and a shuttered corporate park building on Aloclek Drive.

In its lawsuit, 1000 Friends alleges Hillsboro rushed to approve these enterprise zone applications ahead of the tax break moratorium and did so without public notice or proper oversight from the City Council. It also contends city staff did not have authority to approve tax breaks that extend past the life of the enterprise zone program itself.

Hillsboro officials did not respond to OPB’s requests for comment, but they have previously said data centers bring economic activity to the community and support both short and long-term jobs, a claim many residents have pushed back on. City staff have also said they can’t deny applications that meet the requirements laid out in state law and policies previously set by the City Council.

A Washington County spokesperson told OPB the county “reviewed the applications we received, consistent with the law,” but declined to comment further due to the pending litigation.

Tech companies are making use of Oregon’s enterprise zone program for data center developments outside of Hillsboro, as well.

Data center projects in Linn, Umatilla, Morrow and Crook counties have benefited from tax incentives through both the state’s enterprise zone program for urban areas and a longer- term program for rural areas.

Nathan Buehler, communications director for state economic development agency Business Oregon, said data centers are also taking advantage of another state tax incentive, called the strategic investment program.

Several of the people and groups joining 1000 Friends in the lawsuit—Sinclair, Carpenter, Roloff and the Oregon Education Association — played roles in a movement this spring that capitalized on growing resentment over data centers in May’s primary election.

News Source : https://www.opb.org/article/2026/06/23/hillsboro-data-center-fight-heads-to-court/