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Many Oregon cities and towns say they’re short on industrial land

Aerial view of the Intel complex in Hillsboro, Ore.
Courtesy of Intel Corporation
File photo
FILE: The Intel complex in Hillsboro, Ore., is a major employment center and hub for semiconductor R&D and manufacturing. While Hillsboro did not respond to a survey of Oregon communities, its land use concerns have informed lawmakers. Other cities and towns across the state said they have lost economic opportunities due to a shortage of shovel-ready industrial land.

Dozens of Oregon cities and towns say a shortage of shovel-ready industrial land has cost them economic opportunities, according to a survey conducted as part of the push to make more land available to the state’s semiconductor industry.

“Land shortages were reported from Heppner to the Port of Tillamook Bay, highlighting the scale of this statewide problem,” said Andrew Desmond, director of economic development policy at the Oregon Business Council, in a statement. The survey was released by the Oregon Economic Development Association, the League of Oregon Cities and the business council, on behalf of the Oregon Semiconductor Coalition.

The race to expand the state’s semiconductor industry — and score federal dollars from the massive CHIPS and Science Act — has brought renewed attention to the thorny issue of land use, including pushes to expand urban growth boundaries into rural reserves. A semiconductor task force concluded the state had no shovel-ready industrial sites that were big enough — at 500 acres or more — and close enough to an international airport to attract a major chip factory or large-scale R&D facility. It recommended developing two.

The task force also urged lawmakers on a joint semiconductor committee to take “extraordinary legislative action” on land use while CHIPS Act money is still in play. That’s prompted outcries from some farmers who fear the state’s “grand bargain” to protect farms and forests is at risk.

The new survey looks beyond the Portland metro area, where Hillsboro and North Plains are considered contenders for semiconductor investment. (Those cities did not respond to the survey.) Sixty-six cities and towns did, with a little more than half saying a general shortage of industrial land — and development-ready land in particular — had hurt their economic prospects.

Money was a common obstacle.

Local jurisdictions said they couldn’t afford the infrastructure investments — roads, water, sewer and electrical services — needed to prepare industrial land for development.

That funding gap has long existed, said Jim McCauley, the League of Oregon Cities’ legislative director.

“How do you pay for the infrastructure? That is a very significant challenge for a lot of communities,” he said. “Historically, that’s always been on the local governments.”

Economic development officials are pushing the state to designate funds to help local jurisdictions prepare land for manufacturing opportunities, not limited to the semiconductor industry.

At a legislative hearing in late January, Metro Council President Lynn Peterson told lawmakers she was excited to see momentum on industrial site readiness programs. Peterson served on the semiconductor task force and runs the regional government that decides when and where the Portland area’s urban growth boundary should expand.

“The biggest barrier … to new industrial development in our region is not land supply, but whether the land is actually ready for development,” she testified.

Peterson also cautioned lawmakers not to go too far.

“Metro does not support any efforts to upend our land use system,” she said. “Specifically, we are concerned with efforts to circumnavigate the local process and break promises made less than a decade ago on urban and rural reserves.”

Lawmakers are rushing to craft legislation to entice semiconductor companies who can soon apply for billions of dollars in CHIPS Act funds. In her recommended budget, new Gov. Tina Kotek proposed spending $200 million dollars to bolster the semiconductor industry in Oregon.

Kate Davidson
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