Applause and cheers thundered through the La Pine City Council meeting Wednesday evening as the body quashed a proposed industrial land sale to develop a data center that generated fierce public opposition in recent weeks.
The City Council’s unanimous vote on May 27 came after hearing a combined nearly five hours of public meeting comments this month, mostly lambasting the proposal. People formed online Facebook groups and circulated petitions encouraging the Council to shoot it down.
“You have to understand, we do listen to you,” La Pine City Council President Cathi VanDamme told the crowd during the May 27 meeting. “We do listen to you because we live here as well. Thank you for showing up and giving your opinion.”
The vote also came after a report from City Manager Geoff Wullschlager that raised questions about the developer’s estimates for how many new jobs and how much City revenue the proposed data center would generate.
Public opposition in La Pine is part of a trend as communities nationwide sour on data centers in their areas, fearing they will drain local water and energy resources, affecting quality of life with traffic, pollution and noise.
Data centers are large warehouses full of computers that store and process digital information. A boom in Artificial Intelligence tools has propelled demand for new data centers to host servers to store information.
The La Pine City Council voted in March to move ahead with the sale process of a 20-acre parcel at the 330-acre La Pine Industrial Park east of U.S. Highway 97. That vote directed Wullschlager to find out more about the data center proposal and report back to the City Council.
The initial proposal was for a 20,000-square-foot facility — about one-third the size of a football field — although developers were eyeing a potential expansion in the future.
Sale of the vacant land in the industrial park, which is owned by Deschutes County, would have needed final approval from both the La Pine City Council and the Deschutes County Board of County Commissioners.
“My mind on this thing was made up from the beginning because of the presentation that was made,” City Councilor Mike Shields said Wednesday. “However, it is our due diligence, it is our job, to give everything a fair chance, to learn everything we can about it. “
La Pine residents’ opposition came despite developer Boxminer.io promising the proposed AI data center would not use excessive water or affect electricity bills. Developers said that could be accomplished through a “closed loop” cooling system, which recirculates cooling liquid instead of evaporating water.
In a statement on its website, Midstate Electric Cooperative, which provides power to the La Pine area, ensured customers electricity rates would not go up due to the data center, which would be required to pay for any required power infrastructure upgrades.
The data center proposal would have used 20 megawatts of electricity, enough to power about 16,000 homes. According to Midstate, that’s a fraction of the provider’s power capacity and would have been “more than adequately serviced with no risk of disruption.”
In a public comment on Wednesday, Boxminer.io CEO Jeff Keller touted “significant” financial and economic benefits for the City, arguing it’s exactly the kind of project appropriate for an industrial park.
“I didn’t think it was going to be this problematic to try to put an industrial use — especially a high-end, high-tech industrial use — in an industrial park,” Keller said.
The Sunriver-La Pine Economic Development Board had recommended the project to the City Council.
Initially, Boxminer.io floated the potential for up to 200 full-time “high-tech value” jobs from the data center, according to a City Manager’s report from March. But those numbers were only if the facility were to eventually expand. Keller said on Wednesday he estimated 50 full-time jobs to start, adding, “I’m not 100% sure we will get to 50, but it will be considerable.”
City Manager Wullschlager’s report cast doubt on that estimate, and some of the other numbers in Boxminer’s proposal. He found that 800,000-square-foot Amazon facilities produce about 200 higher-paying jobs. Using that job-to-square-foot ratio, Boxminer’s smaller data center would only produce about five jobs.
Wullschlager also found the company may have significantly overestimated how much it would likely pay in electric utility franchise fees, which the City collects from Midstate in exchange for using the City streets to serve residents.
“In both the revenue and employment categories (comparable by way of data), Boxminer’s estimates fail to yield dependable information,” Wullschlager wrote in his report.
La Pine’s rejection comes just days before a one-year pause on property tax breaks for data centers. Earlier this year, the Oregon Legislature cut data centers out of a bill expanding the state’s Enterprise Zone Program, which is intended to lure private investment by offering temporary tax abatements.
Regardless of the moratorium, Keller told the Council he would forego any tax breaks the data center was eligible for.
As Keller put it, “This is millions of dollars on an annual basis that we have said we will not ask for, that because it’s not fair.”
*Editor’s note: This article has been corrected to state that City Manager Geoff Wullschlager’s report said data center developers overestimated the electric utility fees it would pay to the city. A previous version said developers had underestimated the amount. The Source regrets the error.
This article appears in the Source June 4, 2026.
MAKE LOCAL JOURNALISM HAPPEN
Republish our articles for free, online or in print, under a Creative Commons license.
