The matte grey siding of Meta’s largest running data center campus in the U.S. is visible from the window of the Wild Rooster Bar and Grill, which opened six months ago in Prineville. Outside on the patio, a group of data center employees chew on sandwiches and toss cornhole bags. Inside, the bartender says her husband just got hired, too. But it’s no use asking about it. The workers are sworn to secrecy about their jobs.
Many who might have once worked in Prineville’s sawmills or Les Schwab’s former tire headquarters now support operations in data centers — large computer warehouses storing massive amounts of digital information for tech and social media giants like Meta, Facebook’s parent company, and Apple.
Prineville attracted some of Oregon’s first large data centers about 15 years ago with its cool, dry climate, plentiful land, cheap power and friendly tax breaks. Today, City and economic development leaders credit the data centers with squashing the high unemployment rates and lifting low wages that followed the downturn of the timber industry. They also point to fee revenue fueled by data center development as a huge boost for building streets and other public infrastructure.
But as data center development has proliferated across Oregon, public sentiment has quickly turned southward. That’s fueled by concerns over water and power consumption, noise and light, and the general boom in artificial intelligence driving the need for more data centers. Recent proposals in Central Oregon have been met with fierce pushback.
State policymakers are taking a hard look at the industry — and particularly whether they should continue to receive hefty property tax exemptions. Earlier this year Gov. Tina Kotek appointed a new Statewide Data Center Advisory Committee to develop a regulatory framework that could shape where data centers go, the resources they use and the tools local communities have for enticing them.
Prineville is near the center of that discussion. City leaders see a chance to bring in more data centers — but this time, they hope to get more out of it.
“I think we have a tremendous opportunity here in the state of Oregon,” Prineville City Manager Steve Forrester told the advisory committee over a video call on June 26. “We are in a much stronger position today than we have been. The demand for this type of technology is fantastic.”
“The best we have been”
When data centers first approached Prineville in 2009, the City was looking for anything to pull its economy out of the dumps.
As the timber industry crashed, unemployment climbed to 20% and the population started to drop.
Today, unemployment sits at 6%, the population is growing and Crook County has the second-highest average annual wages in Oregon, according to Forrester.
“It’s a far healthier community than I have experienced,” longtime City Councilor Steve Uffelman told the Source. “This is the best we have been.”
Uffelman said a large part of that is thanks to data centers.
Meta’s data center campus — its largest in the country — first began construction in 2010 and expanded several times. There are 11 buildings and a total of 4.6 million square feet, about the size of 80 football fields. The company has poured about $2 billion into building the facility.
Apple also has a large data center campus in Prineville, but the company has released far less information about it and didn’t respond to a request for comment on this story.
An economic analysis completed by the City this year says data centers employ about 700 people, a majority of the new jobs added in Prineville since 2008. The analysis cites data centers as a driver of average wages that rose from about $34,700 that same year to $72,100 in 2022.
“It’s changed Prineville,” former Prineville Mayor Jason Beebe told the state committee in February. “It’s changed it for the good.”
With his term set to expire a the end of this year, Beebe unexpectedly resigned in June, citing personal reasons. Uffelman has been filling in as mayor.
Huge tax breaks on the table
Despite the huge investment, the companies haven’t paid anything in local property taxes. The tax value exempted for data centers this year adds up to more than $130 million, according to a report from the Crook County Assessor’s Office. That includes City, County, school district and other taxes.
That’s set to change next year, when Facebook’s first tax break deal will expire. County Assessor Jon Soliz said it’s not yet clear how much of a boost each local jurisdiction will get, but leaders anticipate it will be sizable. Forrester told the state committee that Prineville will roughly double its property tax revenue.
The data centers negotiated the property tax exemptions with Prineville and Crook County leaders through Oregon’s Long-Term Rural Enterprise Zone program, which was created in 1985 to spur large-scale business investment.
Those incentives have been thrust into the spotlight amid debates over data centers across the state. Some feel they are far too big of a break to award to tech giants with not enough community benefit. The Oregon legislature put a one-year pause on the tax exemption program for data centers that began in early June, stirring a slew of new applications seeking to sign deals before the deadline. In Hillsboro, several groups including a land-use nonprofit and a teachers union sued the City over new tax breaks. Community uproar has led the City to consider a temporary ban on new data center development.
Oregon has the ninth-most data centers nationwide, with 142, according to a Pew Research Center analysis. Along with cheap power and open land, Oregon has no sales tax, meaning data center companies also save millions on purchasing expensive equipment.
“There’s really no reason why communities in Oregon should be giving these companies full property tax abatements,” said Kasia Tarczynska, a senior research analyst with Good Jobs First, a government and business accountability group.
Data centers provide a relatively low number of permanent jobs for the amount of subsidies they receive, Tarczynska said. Building the data centers can provide an influx of construction jobs, but sometimes the workers are hired from outside the area, she said.
On June 28, 66 workers at Meta’s data center campus lost their jobs after the company ended a contract with an IT services contractor. Meta’s spokesperson said the company plans to rehire a majority of the workers through a different firm.
Research from Good Jobs First has found that Oregon has given up hundreds of millions of dollars in data center tax breaks as education budgets suffer across the state. In 2024 schools lost $275 million statewide, according to the research. The losses more than doubled since 2019. For the Crook County School District, tax exemption totals jumped from $10 million to $29 million as more data centers came online. In 2024 that was the second-highest total in the state — although there’s only a peripheral link between the Crook County district’s budget and the tax losses, because local education taxes are reallocated across the state.
Meta says it has given more than $5 million in direct contributions to Crook County schools and local nonprofits over the years. And Prineville leaders point to the fact that while tax breaks stripped millions from local jurisdictions, data centers’ electricity usage has driven up the fees that power utilities pay for street access, which the City can reinvest in public services. Since 2011, that fee revenue has risen from about $430,000 to nearly $11 million — nearly three times the City’s annual property tax revenue, according to officials.
“We are more financially stable now than we have ever been because of the revenue generated by the data center. That’s a big factor,” Uffelman said.
Still, Prineville leaders agree that they likely won’t negotiate a full property tax abatement the next time a data center comes around.
But the tax breaks helped incentivize a new industry in Prineville, Forrester said.
He acknowledged the state has given hundreds of millions in tax breaks. But, “If they weren’t here, we’d have nothing to give away,” he told the state committee.
Thwarted proposals
Other Central Oregon cities haven’t been so friendly to data centers.
Most recently, the La Pine City Council rejected a data center development proposed for an industrial park where they have jurisdiction over the tenants. That followed a surge of pushback on social media and at public meetings as the City started to explore a potential agreement.
A similar scenario played out in early 2025 in Christmas Valley, a small, unincorporated town 100 miles southeast of Bend. Developers withdrew a proposal to rezone 20 acres of land for a data center after Lake County planning commissioners voted against it.
Data centers are also top of mind in Jefferson County, where Madras Interim City Administrator David Clyne recently took to Facebook on June 10 to dispel social media rumors that a data center was bound for the city.
“The Council and City staff are aware that these types of developments have become a politically sensitive topic in many communities, including here locally,” Clyne wrote, adding, “To be clear, the City is not currently entertaining a proposal for locating a data center in Madras.”
But some say the potential is real. In 2024 Jefferson County approved an ordinance adding nearly 200 acres of land zoned for large industrial uses to the City. The Jefferson County Farm Bureau and land use nonprofit Central Oregon LandWatch appealed, arguing the parcel should be used for farming.
Mickey Killingsworth, treasurer of the farm bureau, is worried about data centers moving into the area, and long-term environmental impacts from the developments. She’s been raising sheep in Jefferson County for nearly 50 years. The County is known for raising about half of the world’s carrot seed.
“We’re not like Prineville,” Killingsworth told the Source. “We don’t support data centers.”
In recent months, candidates running for county commission seats across Central Oregon have come out against new data center proposals, including Julie Thompson in Crook County. She acknowledged the economic benefits and job creation — but said those aren’t worth the costs of high water and power use, potential environmental impacts and aesthetic issues.
She said others feel the same.
“Everybody I’ve talked to, they don’t want more data centers,” Thompson told the Source.
She is skeptical of the City’s assurance that Prineville has plenty of water for the data centers. Prineville has touted its multi-million-dollar underground water storage system developed by the City — and funded by Meta and Apple — built to help ease data centers’ strain on the City’s water supply during hot summer days. The underground storage has about a year’s worth of supply.
Still, the future water supply in the Deschutes Basin is uncertain. Limited water supply and declining aquifer levels have led water regulators to clamp down on issuing new municipal water.
Because it primarily uses outside air rather than water for cooling, Meta’s Prineville campus is more water efficient than others, according to a report that water researchers from several Oregon universities delivered to the state advisory committee in March. The campus used about 70 million gallons of water in 2024, about the same amount as 420 Prineville households used in 2021, and about the same amount as 64 acres of Central Oregon alfalfa watered for a year. Google’s data center campus in The Dalles, which is one-quarter of the size, used five times as much water in 2024.
New polls from Gallup show about three-quarters of Americans oppose data center development in their areas due to environmental and quality of life concerns.
And some in Prineville still feel they haven’t seen the purported economic benefits of data centers.
Karl and Gail Wilkerson are co-owners of Dad’s Place, a diner on Main Street downtown and a Prineville fixture. For Karl, data centers brought the ills of rapid growth: escalating housing prices, a land supply pinch and loss of some of Prineville’s small-town feel.
While Prineville’s home prices are still lower than Bend or Redmond, they are rising at nearly 17% per year, faster than anywhere in Central Oregon, according to one real estate company.
And rising average wages have driven up costs to run the diner, he said.
“To me it hurts the economy, it doesn’t help the economy. It’s not like it’s benefitting us from having that up there,” he said. Prineville’s data centers sit behind the rimrock overlooking the town. “It’d be different if we benefitted from it.”
More data centers eye Prineville
Uffelman, the longtime councilor, said he doesn’t know what kind of agreements the City will reach with future data centers. But he’s confident more will come.
“I know there are several that are looking seriously,” he said.
Prineville has expanded its urban growth boundary several times to make room for data center expansions. That will need to happen again if the City wants to see more.
The City’s economic analysis found that Prineville has enough small industrial sites to accommodate job growth over the next 20 years, but has run out of large sites over 50 acres — the kind needed for data centers. The analysis says Prineville needs to add 755 acres of buildable industrial lands to the City, pulling in three large industrial tracts of land.
For Uffelman, the expansion will be about attracting more than just data centers. He wants to see a variety of different industries move in to create a more diverse economy.
Gov. Kotek’s move to regulate data centers comes in tandem with an effort to boost Oregon’s suffering business climate. To do so, Kotek’s appointed “Prosperity Council” has recommended slashing regulatory burdens and easing strict land use protections — policies Republicans have praised.
Meanwhile, the data center committee is charged with reporting a set of recommendations by October.
This article appears in the Source July 2, 2026.
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Lol, of course Dad’s place doesn’t think they see much benefit. But if he doesn’t think that people that work at the data centers live in Prineville and do in fact sometimes go out to eat, then he’s just wrong. Every restaurant in Prineville benefits from the data centers, it’s just common sense.
Great look at the pros, cons and status of data centers in Central Oregon – I was going to go down that rabbit hole (part of the “AI Hate Wave” for my new semi-retired side gig, but just glad to see all the angles fully explored – well-done!