Elected leaders and community members packed a room in the Hillsboro Civic Center on Oct. 10, to show their support, opposition and neutrality for plans to bring in 373 acres to Hillsboro's urban growth boundary. 

On the verge of the clock running out, Hillsboro’s latest land battle has come to a close — ending in a win for land preservationists but leaving uncertainty about the state’s economic future.

In a statement issued Friday, Dec. 27, Gov. Tina Kotek announced she will not use her executive authority to annex 373 acres of rural reserves north of Highway 26 into Oregon’s fifth-largest city.

The decision came days before a statutory deadline under Senate Bill 4, which temporarily granted Kotek the power to bring land into a city’s urban growth boundary for industrial use tied to semiconductor or advanced manufacturing.

City and state leaders hailed the law as a “generational opportunity” to strengthen Oregon’s semiconductor industry, envisioning the site as a potential home for the National Semiconductor Technology Center and nearly $1 billion in federal funding.

But with Kotek’s decision, those aspirations may now face a harsh reality.

“(The governor’s) office has applied a thoughtful — and critical — lens to opportunities for urban growth boundary expansion for the purpose of bolstering our state’s semiconductor industry advancements,” a press release stated. “With two of the three NSTC facilities already determined and the third not yet announced, Gov. Kotek believes there is not a legal path forward to bring additional acreage into the Hillsboro UGB.”

Silicon Forest

Semiconductors have long fueled Hillsboro’s growth, with Intel’s largest campus at the core of Oregon’s “Silicon Forest.” The city employs 78% of the state’s semiconductor workforce, and 89% of its manufacturing jobs are intertwined with high-tech industries.

“This is a missed opportunity — not only for the city, but for the state of Oregon — to secure our economic future,” Hillsboro Mayor Steve Callaway said in a statement.

“The city is appreciative of its partners who worked with us in taking proactive steps to plan, prepare and maximize the potential of eligible lands identified by Senate Bill 4 and the Semiconductor Task Force,” he continued. “As a result, these lands have never been more ready to meet the needs of industry as they are today.”

In order to see those opportunities come to fruition, action is now needed from state leaders, Callaway said.

A fight for preservation

Where some saw economic opportunity, others saw a threat to farmland and a dangerous precedent. Critics decried the expedited annexation process under Senate Bill 4, which bypassed traditional multi-jurisdictional reviews and public engagement.

The 373 acres at issue have been designated as rural reserves since 2014, safeguarded for at least 50 years. Opponents argued that annexing the land undermines longstanding agreements to protect Oregon’s agricultural heritage.

“While we are disappointed that the state won’t be receiving more CHIPS funding, we are grateful that the governor made the right choice in following the laws and respecting the best of Oregon’s land-use traditions,” said Aaron Nichols of Friends of Smart Growth.

Nichols, who also played a major role in fighting against doubling the size of the urban growth boundary in North Plains, spoke to how community members across the county have pushed back against industrialization in recent land battles, advocating for the preservation of Oregon’s agriculture.

“As we have seen in North Plains and across the county, when given the choice and a chance to speak out, the vast majority of Oregonians support protecting our world-class farmland. In this case and in future cases, we are ready to call on this support to ensure that elected officials hear from and are accountable to their electorate,” Nichols said.

Strain on Oregon’s semiconductor industry

Kotek’s decision comes at a turbulent time for Oregon’s semiconductor industry: Intel recently laid off 1,300 employees as part of plans to reduce 15% of its global workforce, while rumors swirl about a potential sale of its 50-acre Hawthorn Farm campus in Hillsboro, per the Oregonian.

Other Hillsboro-based companies are also trimming down, with Lattice Semiconductor Chief Executive Officer Ford Tamer announcing a 14% workforce reduction in its quarterly earnings report at the beginning of November, following plummeting sales and profits.

To boot, the reductions continue shortly after the two-year anniversary of the federal CHIPS and Science Act, which saw $8.5 billion in federal dollars invested in Intel’s Hillsboro expansion just this year.

When Kotek was still considering input, Dan Dias — Hillsboro’s Economic and Community Development Director — said the city plans to continue its work to foster industry development and lay the groundwork for future generations no matter the decision.

“We are hoping that the governor uses the authority,” Dias said in an earlier interview with the News-Times. “We also will work with our governor as a partner and take that first step of whatever she indicates she is going to move forward with.”

Although the move under Senate Bill 4 may be off the table, uncertainty lingers over Kotek’s next move and the broader future of industrial land expansion in Oregon.

“The governor believes that for the long-term success of Oregon’s economy, there may be a need for more industrial land outside of existing UGBs, but the constraints of Senate Bill 4 limit her authority at this time,” the governor’s statement read.