Background:
The City of Oregon industrial park located on the Northwest corner of Wynn and Corduroy Roads was identified in the 2006 City-wide Comprehensive Plan as a site for future industrial development. The City of Oregon has been securing options and assembling land for industrial development for approximately 10 years. When the final properties are purchased on the corner of Wynn and Corduroy, the amount spent will be approximately $8,600,000 over the 10-year span. Additionally, the City received a grant from the federal EDA to construct the road from Parkway Dr. to Wynnscape Dr. where the City invested an additional amount in matching funds in 2021. The road was constructed to handle heavy truck traffic or “Michigan loads”, which are built for industrial traffic.
As you recall, there was a manufacturing industry interested in developing on the site in early 2024. When that project did not materialize, another developer expressed interest in the site, which is the potential data center developer. This developer expressed an interest in developing on approximately 168 acres, which is the acreage between Wynn, Corduroy, Wynnscape, Parkway and Blue Heron Dr. and included the five houses on the corner. At that time, the City, through the OEDF, had owned all of the acreage except for the 5 houses and the Grotz family property. The OEDF, by way of the previous industrial opportunity had obtained options for the 5 houses and the Grotz family property and opted to extend the options for the potential data center.
A Purchase and Sale Agreement was drafted and then presented to City Council for review and passage. When the legislation was presented, all of the points regarding the Agreement were discussed that were relevant, including the Zoning Contingency on page 7 of the Agreement. During this process, many residents and business representatives spoke in favor of this endeavor. Not one person spoke against it. The legislation was passed unanimously, and the Agreement was signed.
At the regular City Council meeting held on November 12th, 2024, City Council unanimously approved an ordinance for the purchase of the Grotz family property through the OEDF for $1,220,000. On March 23rd, 2025, City Council unanimously approved an ordinance for the purchase of 4919 Corduroy Road. On April 28th, 2025, City Council unanimously approved 4 ordinances for the purchase of the remaining four houses at the NW corner of Wynn and Corduroy. The legislation to rezone the final 20 acres in the industrial park will come before City Council on August 25th, 2025 at the Regular City Council meeting. If it is not approved, it is likely that the data center development will not move forward and the process to seek a new development for the industrial park will restart.
Concerns about Data Centers:
Many questions have been raised about data center developments in general. Below are some of the concerns and how they can be addressed:
The Appearance of Data Centers:
Much of the land is zoned as Commercial/Industrial and Advanced Manufacturing. The Advanced Manufacturing Zoning designation was designed to allow for more aesthetically pleasing developments. It is meant to prevent heavy industry from developing. It also has larger setbacks, shorter buildings, landscape design standards, and building design standards. The current data center developer is fully aware of the design standards and has indicated that they plan to adhere to them, with the possibility of requests for variances. Though we do not have a conceptual plan as of yet, staff is planning to address these concerns by adding language into the Economic Development Agreement to ensure the site development reasonably meets the expectations of the public.
Though every data center user will have a different building requirement almost every user understands that they will not get a building permit unless they pass a Site Plan Review which will take into account all of the aforementioned concerns and they will make the necessary changes within reason to accommodate the city’s building standards, setbacks and aesthetics. The developer has advised us that the data center group is a large colocation provider, akin to a data center landlord. These groups tend to have nicer facades because they are front-facing facilities intended to impress tenants. They anticipate the buildings will be similar to other such buildings to be nicer light industrial buildings with accent paneling and even glass facades. The campuses are always well maintained and secure.
Below are some images of data centers that were provided by the proposed developer:
Water Usage:
There is a presumption that data centers use an excessive amount of water. There are many examples of data center sites that use large quantities of water. Typically a site of this size could use 0.5 – 1.0 MGD. Staff has been assured by Capacity, LLC that the water usage would be minimal. It has been expressed that data centers have generally been criticized for excessive water use in other parts of the country. In response, some data centers have modified the designs to use less water for cooling and use more air-cooling methods. We have been informed that this site will likely use approximately 20,000 – 30,000 gal. of water per day for general office and a “closed loop” cooling system that continuously recycles water. Additionally, if the development were to use more water, that would be positive for the financial security of the Oregon water system. The City would have a large water customer that would generate additional revenues, thus keeping water rates low.
It is important to note that the City has 2,000,000 gallons of water per day available for new development. The City water rates were last revised in 2023 and are on a set schedule to increase through 2027. The increases were due to inflation and rise in operating costs. The data center will have no effect on water and sewer rates.
Additionally, over the last three years, the City has been planning to increase the water treatment plant capacity. The project will be paid for through a capital improvement charge that is equal to the annual loan payment divided by annual water consumption. Once the loan is paid, the charge will come off the bill. New large water users will help lower the capital improvement charge. In this case, the data center will have very little effect on the charge.
Electricity usage and effect on residents:
It is known that data centers use an extremely large amount of energy to operate. Capacity, LLC has informed City Council in a public meeting that a data center in the Oregon industrial park would use approximately 500 MW of electricity. What this means is that the data center would use an average of 500 MW while in operation at full build out. The usage may be more in the summer months because of the heat and necessity to use more electricity for cooling. Since the proposed development would be getting grid electricity directly from the 345kv transmission line located a few hundred feet north of the site, the proposed development should have no effect on the distribution system users. Additionally, the developer plans to build onsite generation to supplement power they would be otherwise purchasing from the grid. Finally, utility operators will always serve residents first, not data centers. For example, when Dominion Energy began experiencing power constraints due to demand in Northern Virginia, the utility imposed delays on new data center projects to maintain grid reliability for everyone in their service territory. Utilities facing constraints in other parts of the country similarly impose moratoriums on large energy users (usually defined as 25 MW or more) when reaching the final 1,000-2,000 MW of availability, until new power generation is brought online.
Concerns about Electric Rates:
Data Center developments have been cited as a cause of electric rate increases. Though the location of a data center may have an effect on electric rates from a regional perspective, they do not have a direct effect on electric rates in the city they are located in. Electric rates are set by region. In the PJM territory, which covers 13 states and the District of Columbia, rates are set by electricity consumption in zones. Oregon is located in the ATSI Zone, which is mostly served by First Energy. The ATSI Zone covers all of Northern Ohio, and a small portion of Western Pennsylvania. A data center constructed in Oregon will have no effect on electric rates if the same data center is constructed anywhere else in Northern Ohio, let alone in the PJM territory. Furthermore, the developer chose this site because there are plans to build an additional power plant adjacent to the site which they anticipate will help to lower electricity prices overall. Data centers are among the largest energy users and are very price sensitive in their site selection. They do not want rates to go up either. Much of what drives rate increases from utilities is covering the cost of transmission line upgrades. The developer chose this site because several 345 and 138 kV lines are less than half a mile away from their planned substation to serve the campus, greatly bringing down transmission construction costs versus projects several miles away from such abundant infrastructure.
Noise Concerns:
There are concerns that data centers create excessive amounts of noise. Data center developers complete noise studies before and after the development of sites. During a field test at a data center in New Albany, it has been found that the noise readings at the fence line of a data center site read at 66 Dba, which is well within compliance of the Oregon Municipal Code. One concern could be that the onsite electricity generating units could cause excessive noise. This is unknown at this time. However, the site developer is aware that any development of onsite electric generation would need to be constructed on portion of the site that are already zoned for heavy industrial use. Moreover, these onsite generation units will be housed inside a facility, further reducing the potential for noise in violation of Oregon Municipal Code. Staff is also planning to address these concerns in the Economic Development Agreement with the end user. Data centers have faced concerns about noise in every community they operate in. Much engineering has been put into resolving this issue over the past few decades. Any data center built in Oregon will incorporate that progress in addressing noise and other concerns.
Concerns About Lighting:
A concern was raised about light pollution. Again, data centers generally have large setbacks and landscape buffering. Any development that occurs at this site would have some type of lighting for facility security and maneuverability. Regardless, exterior lighting for all new developments shall be shielded and not exceed 0.5 foot-candles at the property line. Per Section OMC 1145.08 – Advanced Manufacturing, lighting shall not exceed 0.3 foot-candles at a lot line that abuts a single-family residential property. A typical data center is more simplistic in design pertaining to the site layout, so not as much lighting would be needed as opposed to a manufacturing facility that operates during multiple shifts.
Economic Analysis:
There was a question asked about if the City has completed an economic analysis. I think the concern is that it is unknown what the economic impact will be for the City. In the Purchase Agreement with Capacity, LLC, Section H on page 9 of the Agreement discusses the Economic Development Agreement. This item will need to be negotiated with an end user and approved by the Oregon City School Board and the Oregon City Council. The expectation is that this Agreement will outline the economic benefits for the City of Oregon and the Oregon City School system. Though it is unknown exactly what this benefit will be, what is known is the estimated amount of investment planned for this development. It is likely that the investment of a data center at this site will range from $2 Billion to $3 Billion. With that range, we can estimate the tax value of the property. In this case, a property tax abatement with a payment in lieu of taxes would be the most beneficial mechanism for the City and School system to get the maximum amount of revenue for the benefit of the community. Moreover, data centers are among the highest NET tax producers because they produce little traffic and demand so little in municipal services. For example, in Loudoun County, VA, the largest data center market in the world, it is estimated that data centers produce approximately $26 in tax revenue for every $1 they produce in services. Data centers are a net positive for revenue in that location, credited with lowering residents’ real property tax rates from $1.285 per $100 assessed value to $0.805.
Conclusion:
I believe it is in Oregon’s best interest to rezone the remaining 20 acres in the industrial park to Advanced Manufacturing and continue forward with the project as planned. The developer has communicated to us that failing to do so will terminate the project. That would be our choice, and that choice has foreseen consequences. Even if the project were to fall through due to insufficient power, lack of agreement on tax revenue, or for any other reasons, this is still a site that Oregon has spent years assembling to create an economic development opportunity. The best way to attract any tax-generating user to Oregon is to have a contiguous, zoned, development-ready site to offer.
Thank you for your consideration and please contact me if you have any questions or need additional information.