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The city of Eugene has rejected an argument that modern data centers qualify under E-1 zoning for several reasons, including that the small number of employees would not meet “economic diversification objectives.”
A data center cannot be operated at the former Hynix semiconductor plant, the city of Eugene has decided.
Planning and Development Director Alissa Hunter on Tuesday, Sept. 8, notified an attorney representing an unidentified client affiliated with the former Hynix plant at 1830 Willow Creek Circle that a data center would be prohibited under existing zoning for the property.
The attorney, Bill Kloos, had asked the city in July whether a range of possible uses — including a data center, or a manufacturing or research and development facility — would be permitted at the 1.2 million-square-foot factory, which sits on 200 acres in west Eugene.
Kloos — who has represented numerous prominent businesses in Lane County land-use matters — is working with a client who has the former Hynix campus “under contract” and wants to “redevelop, reuse, and market the property for one or more uses,” per the July request.
But the client appears to have been most interested in a data center project. The city’s response to Kloos’ request said he only requested verification for a data center under the property’s zoning, despite his application requesting a broad range of industrial uses.
Kloos argued that a data center would be permitted under current zoning under a land-use category for “Information Technology Services.”
But the city rejected that argument, saying the category, which was added to Eugene code in 2001 – before modern cloud computing and artificial intelligence took off – was never intended for modern-day data centers.
“Back in 2001, the City Council could not have intended the ‘Information Technology Services’ use to encompass the large modern data centers described in the zone verification application,” Hunter wrote.
Hunter also noted that in 2014, when the council revised certain zoning rules and created the E-1 category that the Hynix plant is zoned under, councilors did not add data centers as an allowed use in any zones, despite cloud computing being “widely available” and modern data centers being developed in Oregon at that time.
The city detailed other reasons why a data center would not be permitted under E-1 zoning, which is “designed for firms that will help achieve economic diversification objectives” and typically have a large number of employees per acre, according to Eugene city code.
In contrast, the described data center would be “almost self-operating, with little human presence or interaction on site,” Hunter wrote, instead of “employees utilizing the campus-like setting” as what was “intended” under E-1 zoning.
Firms working in the E-1 zone also must not “generate offensive external impacts and usually do not tolerate substantial noise, pollution, or vibration from surrounding uses,” according to city code.
Hunter said data centers “notoriously” have external impacts that “may be offensive” to other nearby uses, like diesel generators that create noise and exhaust, and water use linked to water temperature increases, excess sediment, nitrates and polyfluoroalkyl substances often referred to as “forever chemicals.”
The size and traffic impacts of the potential data center were other issues.
Kloos’ application didn’t specify whether a potential data center project would use some or all of the plant, require construction of additional buildings on site, or a combination of the two. Given that limited information, Hunter said the city couldn’t determine if a proposal would meet building-size criteria outlined under E-1 zoning rules.
On parking and traffic, Kloos’ application stated that the proposed data center would have “limited routine visitor activity” unlike retail or customer-facing uses.
In response, Hunter said the city normally considers traffic generation to ensure traffic impacts are less intense than intended under a certain zoning. But it is “equally as relevant” to a land use that takes up an “immense amount” of employment land with “extremely little” employee traffic, Hunter wrote.
“For all the reasons articulated above, the data center use described in the zone verification application is prohibited in the E-1 zone,” Hunter wrote.
A city spokesperson said in July that Kloos’ was the first zone verification request that “makes the claim that a data center, as defined in the letter, is a permitted use” in E-1 zoning.
The Willow Creek circle property used to be a Hynix semiconductor plant, the region’s biggest factory, which closed in 2008 and laid off 1,400 workers. The empty plant has sold multiple times since — most recently, in 2020, to Stratacache, an Ohio-based digital sign company. Since buying the property, Stratacache’s operations on the site have gone dormant.
Kloos previously said he is working with a client who has the former Hynix campus “under contract.” But in her letter, Hunter said the unidentified client “wishes to purchase the property.”
The city’s decision can be appealed to the Oregon Land Use Board of Appeals.
Lindsay Selser, a spokesperson for the Planning & Development department, said the city has created a new webpage about data centers in Eugene after Kloos’ zone verification request generated “significant interest and questions within the community.”
“Communities across the Pacific Northwest are also having similar conversations about how [large modern data centers] may affect their area,” Selser said. “To support this, we’ve created a dedicated webpage where Eugene residents can learn more and stay up to date on this topic. The page will be updated as new information becomes available.”
The Eugene City Council is also “tentatively scheduled” to discuss “Data Centers in the Zoning/Land Use Code” on Dec. 14, she said.
Kloos did not immediately return a request for comment.
