Hillsboro, hub of Oregon semiconductor industry, seeks more manufacturing land as Legislature debates land-use laws

JULIA SHUMWAY/Oregon Capital Chronicle

HILLSBORO — Hillsboro city leaders can picture a new semiconductor facility on the hundreds of acres of land now planted with grass seed on the northwestern outskirts of their city.

On one side of an invisible line drawn by the Legislature nearly a decade ago, almost 460 acres are ready for development. On the other side, hundreds more can’t be touched.

As Oregon legislators finalize plans for new policies and $200 million in state spending to help the state compete for almost $53 billion in federal grants and tax credits intended to grow the domestic semiconductor industry, the city of Hillsboro is seeking state intervention to make the land available.

On Monday, in a small bus driven by City Manager Robby Hammond, Hillsboro Economic and Community Development Director Dan Dias, made that pitch to reporters. The bus toured the hub of Oregon’s semiconductor industry, where tens of thousands of people work at Intel and other companies, and the surrounding grassy plains where Dias and others envision the industry expanding – if the Legislature allows.

“We have been a center and an area of a lot of semiconductor activity, while most of the United States semiconductor industry, especially manufacturing, was going overseas,” Dias said. “And now we find ourselves at a unique crux, as does the entire country, with the CHIPS Act and a lot of the reshoring competition coming back. Where and how do we use some of those existing industry sectors in our state and largely here in north Hillsboro, and how do we try to leverage off that?”

Washington County has been the center of the state’s semiconductor industry for decades, beginning with Intel building its first campus outside of California in Aloha in the 1970s. Now, Intel employs about 22,000 people on four campuses in and around Hillsboro, and dozens more semiconductor suppliers and manufacturers are clustered around the Intel campuses.

The Intel Aloha Campus is about 50 acres. The company’s Ronler Acres campus, built 20 years later, is about 560 acres. And now, large fabrication facilities are looking for a minimum of 800 acres.

Companies are finding that land elsewhere, with Intel starting construction on a 1,000-acre campus in Ohio last year and Taiwan Semiconductor Manufacturing Co. building a $40 billion facility on more than 1,000 acres in Arizona. But similar land is hard to find in Oregon, where state land use laws limit where and how manufacturers can build.

Hillsboro has 777 acres of land available for industrial development, spread throughout the city. Leaders want to combine about 460 acres in the northwest corner of the city with an adjacent 373 acres outside the urban growth boundary, the invisible state-approved line around cities that limits where they can grow.

“We’re not saying Hillsboro is the only option or should be, but we believe we should be part of a collective set of options offered around the state of Oregon,” Dias said.

Legislative action needed?

Senate Bill 4, the semiconductor measure lawmakers are considering, would give Gov. Tina Kotek the authority to designate land to be quickly brought within urban growth boundaries for semiconductors or other advanced manufacturing.

But Hillsboro leaders worry that executive authority wouldn’t be enough for their needs.

That’s because in 2014, Oregon lawmakers interceded in the Portland area’s land use planning system with a so-called “grand bargain” after the Oregon Court of Appeals rejected a local plan. The Legislature expanded the urban growth boundary around Hillsboro, but lawmakers also recategorized about 2,200 acres adjacent to city boundaries as rural reserves – meaning they can’t be developed or included in future urban growth boundary expansions.

“That statutory tradeoff in 2014 took 2,200 acres of land out of play for Oregon and out of play for Hillsboro,” Dias said.

Because the Legislature was responsible for designating the land as rural reserves, Dias and other Hillsboro leaders believe the Legislature, not the governor, would have to change its classification.

Mixed opinions

Any attempts to tinker with urban growth boundaries become hot-button issues. Legislators have received letters and heard testimony from many farmers and conservationists opposed to what they see as an attempt to weaken the state’s land use law.

Sarah Deumling, who grew up on a family farm in the Willamette Valley and now manages a 1,300-acre forest in Polk County, wrote that lawmakers should protect farmland and ensure that cities use land within their urban growth boundaries before asking to develop more land. Farmers will always be in Oregon and love the land, she wrote.

“One cannot say this for industries from afar which are lured here by financial advantages with no guarantee of how long they will stay and if their promises of jobs and wages will be fulfilled,” Deumling wrote.

But owners of about 1,200 acres outside of Hillsboro have signed a letter supporting a change in zoning. Cindy Hodges, one of the landowners, told lawmakers that the land could be better used for manufacturing than farming.

Much of the land isn’t irrigated, and it’s so close to the city and recreational areas that there could be conflicts, she said. For example, Hodges uses shotguns and plays loud recorded sounds of distressed birds to keep birds away from the crops on her organic farm, and those could annoy or anger non-rural neighbors.

“The opposition you are hearing is primarily from people who do not live on this land and are not familiar with the complexities of farming in this area,” Hodges said.

• Oregon Capital Chronicle is a nonprofit Salem-based news service that focuses its reporting on Oregon state government, politics and policy.