After dozens of people packed La Pine City Hall on May 13 in an uproar against a proposed data center, it’s unclear where City leaders and developers stand on the project.
The public comment period at the meeting took nearly three hours, with most people in opposition, citing fears the facility would guzzle water, push up power costs, hurt wildlife habitat and the overall quality of life in La Pine without providing a substantial economic boost. The pushback comes as communities across the country voice similar concerns over new data centers — massive computer storage and processing facilities driven by a boom in demand for artificial intelligence.
Other Central Oregon cities, including Prineville, are already home to data centers.
As developers eye land in the La Pine Industrial Park, the City Council has the initial say as to whether to sell it off.
Some commenters at the May 13 meeting were alarmed that they weren’t notified when the City Council directed staff March 25 to “move forward with the purchase and sale process” for 20 acres of land in the industrial park to a data center development company, Boxminer.
According to City Manager Geoff Wullschlager, that “non-binding” decision was far from closing on a sale. Instead, Wullschlager’s task was to study the proposal.
“We’re just doing our due diligence without fear or favor, trying to be benign on this,” Wullschlager told the Source on Monday. “The community having a strong opinion on this certainly makes an impact with the Council.”
The public pushback seems to have made an impact on developers, too.
“I’m not sure there will ever be a data center in La Pine after last night’s meeting and the land sale has not yet been approved by the city, so I think its best to hold off discussing anything specific about La Pine,” Boxminer CEO Jeff Keller wrote in a LinkedIn message to the Source on May 14.
Some details about the proposal remain unclear — even for City officials.
According to Keller, the data center would cool itself with a “closed loop” system, which recirculates cooling liquid instead of consuming and evaporating water. But Wullschlager said the company hasn’t provided specific examples of how the technology has worked in other facilities. Wullschlager said it’s been difficult to find experts to weigh in on other parts of the proposal.
When asked how large the data center building would be, Keller wrote, “Let’s see if the project gets approved.”
“Here to create jobs”
Wullschlager provided the City Council with a summary of Boxminer’s proposal in a March 25 memo. It says the company would purchase the land for $1.5 million — half of which goes to the City, the other half to Deschutes County, which must also sign off on the deal — and site construction would cost $286 million. The memo states that would generate 100 construction jobs and up to 200 “full time ‘hi tech value’ jobs with salaries ranging from $60K-$180K.”
Keller told the Source the facility would generate 50 full-time jobs initially, but “with more power, this could grow significantly,” Keller said.
“We are here to create jobs in the community,” Keller said during public testimony at the May 13 City Council meeting. “A data center is a clean factory with no pollution, very little noise — a lot less noise than the sawmill and the freight train — and a positive effect on the community.”
The promise of jobs and capital investment is a big reason why Sunriver-La Pine Economic Development recommended the project earlier this year, said executive director Patricia Lucas. The group helps find new tenants at the park, a swath of land owned by Deschutes County designated for industrial development before the City was incorporated in 2006.
“If it’s a business that’s eligible for the industrial park and they’re going to make a positive economic impact, that’s a good part of the basis for a decision and recommendation,” Lucas said.
Wullschlager said Boxminer also hasn’t backed up its claims of new jobs, which can vary significantly based on the type of facility.
New data centers do stimulate overall job growth by 4% to 5% over five to six years, according to new research by the Brookings Institute. A recent economic study attributed significant job and wage growth in Prineville to data centers. But a Prineville data center with ties to Meta this month planned to lay off 66 workers, according to KLCC.
And more jobs in an expanded facility would depend on more access to power. According to the City, La Pine-based Midstate Electric Cooperative can guarantee at least 20 megawatts of power for the data center. That’s enough to power 16,000 homes, according to Lewis & Clark Law School.
State utility regulators have ordered data centers to pay more for electricity under Oregon legislation passed last year, but that rule doesn’t apply to co-ops, which are customer-owned and purchase power directly from the Bonneville Power Administration.
Midstate did not return voicemails from the Source. A statement on the company’s website says large new power users — including data centers — are responsible for covering the cost of power infrastructure upgrades required to handle new electricity loads.
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