Land use dispute snags Oregon semiconductor plan

By PETER WONG
Oregon Capital Bureau

Oregon has a $200 million plan to attract some of the $52 billion soon to be available in federal aid for domestic semiconductor manufacturing.

But the plan, in the form of a proposed amendment to Senate Bill 4, has a big hitch.

As heard by a joint legislative committee on Wednesday, the bill would empower Gov. Tina Kotek to invoke one-time authority to designate suitable industrial sites to be added within urban growth boundaries of cities. Kotek would be required to conduct a public meeting in the affected community, and her authority would end June 30, 2024.

The bill names 16 cities for consideration, among them Hillsboro, North Plains, Sherwood and Tualatin; Happy Valley and Wilsonville; and Gresham, all in the Portland metro area. Others include McMinnville, Redmond and Scappoose.

The Oregon Farm Bureau Federation, the state’s largest group representing farmers, opposed that idea.

“The conversion of agricultural lands into paved industrial lands is a permanent destruction of our natural and working lands,” Lauren Poor, a vice president of the federation, said in video testimony. “The Farm Bureau feels strongly that this committee and the governor should focus on the rezoning and rehabilitation of lands within the current urban growth boundary.”

Washington County

Although a task force concluded last year that Oregon lacks suitably large sites for manufacturing, its report also identified two potential sites in Washington County, already home to Oregon’s Silicon Forest and a range of companies led by chipmaker giant Intel. One site is near Hillsboro and the other in North Plains.

North Plains has a pending request to the state Department of Land Conservation and Development, the land use planning agency, to expand its urban growth boundary to add its site. But Hillsboro, under a 2014 state law, cannot expand onto rural reserve lands that are off-limits to development for 50 years.

“These lands require specific legislative action to address these statutory limitations to allow urbanization of these areas and prepare them to attract the semiconductor and other advanced manufacturing industries,” Mayor Steve Callaway said in testimony filed with the committee.

The law was drafted after the Oregon Court of Appeals concluded that Washington County failed to offer adequate justification for its designation of urban and rural reserves under a plan by the Metro regional planning agency. The alternative was for the county and Metro to redo the process.

Washington County Commissioner Jerry Willey, who was Hillsboro mayor from 2009 to 2017, supported the request and tax breaks that provide incentives for such development.

Cornelius City Manager Peter Brandom spoke in favor of a proposal by Mayor Jef Dalin and the city council to include a 430-acre site north of the city within its urban growth boundary, if the Legislature or the governor decide to add one or both Washington County sites to the state list. The Cornelius site is designated as a rural reserve off-limits to development.

The addition, the letter from Dalin and the council said, “presents an equally small leap — and large gains — for the Legislature or (Kotek) administration to also approve the 430-acre UGB expansion onto rural reserve land next to Cornelius … Our proposed UGB expansion has long been and continues to be so very crucial to our city’s current and future economic, social and environmental well-being.”

But a letter filed by Save Helvetia, an unincorporated rural community north of Hillsboro, said the proposed change is an example of what will happen if Washington County and Hillsboro are allowed to restart the land use process.

“The (2014 law) took away Washington County’s ability to alter urban and rural reserves. This was for a reason. Now, magically, you are going to work with local jurisdictions: Washington County and the City of Hillsboro,” said the letter signed by president Cherry Amabisca and secretary Robert Bailey.

The land-use watchdog group 1000 Friends of Oregon, founded in 1975 by Tom McCall — the late former governor who advocated and signed Oregon’s land use planning law 50 years ago — and Portland lawyer Henry Richmond, also weighed in.

“We do not need to wait for urban growth boundary expansions, skip over potential sites inside urban growth boundaries, or create entirely untested or alternative land use processes in order to make Oregon more competitive for semiconductor company expansion(s),” executive director Sam Diaz testified. “Prioritize, instead, the funding and staff time … for land already inside our urban growth boundaries.”

State assistance

Most of the proposed amendment to Senate Bill 4 focuses on the process of how businesses and others can seek shares of the $200 million that Kotek has proposed in her two-year budget to assist them in securing up to $52 billion in federal aid. The money is contained in the Business Development Department, known as Business Oregon. The U.S. Department of Commerce is expected to propose rules soon for the distribution of money.

Senate Republican Leader Tim Knopp of Bend said he’s willing to go further.

“I believe Senate Bill 4 needs to be bolder and provide more support for our job creators,” said Knopp, who also is one of the top Republicans on the joint committee. “The revenue forecast (also released Tuesday) has provided us with sufficient assurance that we have the dollars to invest in semiconductor and advance manufacturing without touching rainy-day funds.”

The committee will continue hearing testimony on Feb. 27 and March 1.

Others who testified were Duncan Wyse, president of the Oregon Business Council, which did the staff work for the semiconductor task force last summer; Angela Wilhelms, president of Oregon Business & Industry; Curtis Robinhold, executive director of the Port of Portland; and Vince Porter, Kotek’s policy adviser for economic and workforce development.