Factory or farm? Oregon could transform land use for chipmakers


NORTH PLAINS, Ore. — Aaron Nichols walked past rows of kale growing on his farm, his knee-high brown rubber boots dotted with some of the richest soil on earth, and eyed the fields in the distance with concern. A gigantic building belonging to the semiconductor chip manufacturer Intel towered just over the horizon.

For exactly 50 years, the farms and forests surrounding Oregon’s metropolitan areas have been protected from urban sprawl by the first statewide law imposing growth limits on cities. Cities cannot expand beyond these limits unless they make a request and justify it. City and county approvals can take months or even a few years (major expansions also require approval from the Oregon Department of Land Conservation and Development).

But now, a bill being considered in the Oregon legislature could authorize the governor to unilaterally expand those limits as part of Oregon’s drive to attract chip companies and give them land to build their factories. The measure would also net chipmakers $200 million in grants.

Farmers and conservationists are deeply concerned about the proposal and what it will mean for a state that values ​​its open spaces.

“One of the reasons we bought our farm right here is because we knew we were going to be farms for 50 years and everyone around us was going to farm,” Nichols said. “And now we’re not so sure. Now it’s up to the governor’s decision. And that’s a scarier place.”

State officials and legislators, on the other hand, are striving to bring more semiconductor fabs to Oregon while billions of dollars in federal funding are available to boost the industry.

They were pissed off by Intel’s decision last year to build a massive $20 billion chip manufacturing complex in Ohio rather than Oregon, where suitable building land is scarce.

Oregon has its “Silicon Forest” – a counterpoint to California’s Silicon Valley – and has been the center of semiconductor research and production for decades. But Oregon is competing with other states to house multibillion-dollar microchip factories, called fabs. Competition intensified after Congress passed the CHIPS Act in 2022, which provided $39 billion for companies that build or expand facilities that make semiconductors and those that assemble, test and package the chips.

A dramatic expansion of semiconductor design and manufacturing in Oregon would create tens of thousands of high-paying construction jobs and thousands of manufacturing and supply chain jobs, the Oregon Semiconductor Competitiveness Task Force said in an August report.

But the task force warned that Oregon needs more buildable industrial land near infrastructure, a talented workforce, and specialized suppliers to attract and retain semiconductor companies, and called for “urgent legislative attention.”

“This is about a generational shift,” said Democratic State Senator Janeen Sollman, a lead sponsor of the bill, during a recent tour of an HP Inc. campus in Corvallis, Oregon. “This is the opportunity that students will have for their future when they get into these types of jobs.”

Today, thanks to a former Republican governor, you can be within minutes of farm or ranch country from many Oregon cities, unlike many states where cities are surrounded by sprawling malls and housing developments.

Tom McCall, who was Governor of Oregon from 1967 to 1975, had successfully lobbied to protect Oregon’s beaches to ensure they remained public. In 1973 he urged lawmakers to push for a tough new land-use law.

“Sagebrush subdivisions, coastal ‘condomania,’ and rampant suburban rampages here in the Willamette Valley threaten to belittle Oregon’s status as this nation’s environmental model,” McCall said in a 1973 speech before the Legislature.

The legislature complied, passing legislation establishing the nation’s first statewide city growth limit policy.

Washington State and Tennessee followed Oregon’s lead. In 1982, a voting measure called for an annulment in Oregon. McCall, who was dying of cancer, campaigned against it. Voters validated Oregon’s land use system by voting against the measure two months before McCall’s death.

According to Oregon’s system, an urban growth limit indicates where a city is expected to grow over the next 20 years. Once land is included in an UGB, it can be attached to a city. These UGB lines are regularly expanded. From 2016 to 2021, 35 were approved according to the Oregon Department of Land Conservation and Development.

But the process takes time. McMinnville, in Oregon’s storied wine country, has struggled for 20 years to expand its borders, said Robert Parker, director of strategy at the University of Oregon’s Institute for Policy Research and Engagement.

Obtaining the permit could take months or years, depending on the controversy, said Gordon Howard of the Oregon Land Protection Agency. Appeals to the courts or a governmental body cause further delays.

That’s too long a wait for chipmakers, especially those looking to take advantage of funding from the CHIPS Act.

“Other states offer a more streamlined approach that is more in line with the speed of the market,” according to the Oregon Semiconductor Task Force, which included the then-government as a member. Kate Brown.

Under the bill, the governor can designate up to eight sites for UGB expansion: two larger than 500 acres (202 hectares) and six smaller sites. All appeals will go directly to the state Supreme Court.

The Oregon Farm Bureau, which represents 7,000 family farmers, said efforts should instead focus on lands already within the urban growth limit.

“The conversion of agricultural land to paved industrial land is a permanent destruction of our natural and working spaces,” said Bureau Vice President Lauren Poor. “Once paved, soil and its ability to sequester carbon, support our food system, and generate income for Oregonians is gone forever.”

Washington County, where Nichols Farm is located, produces more clover seeds than anywhere else in the world thanks to its unique soil and rainy climate, said Nicole Anderson, an associate professor in Oregon State University’s Department of Crop and Soil Science.

“I hope that science and consideration of our land resources will be considered when this bill is voted on,” Anderson told the Legislature’s Joint Semiconductor Committee on March 13.

On Friday, the Ways and Means Committee sent the bill to the Senate for a vote. The Senate will consider priority legislation this week.

“I am thrilled that this bill will pass the committee and look forward to seeing it through to the finish line,” said Rep. Kim Wallan, a Republican and the bill’s lead sponsor.

Parker, the land-use expert, doesn’t think its passage would mark the beginning of the end of Oregon’s cherished policy.

“Will there be more challenges and bumps along the way? Yeah, I think so,” Parker said. “But I feel like it’s so well established in the state at this point that it has the inertia to carry it through these challenges.”


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