How DId A Small Oregon Town’s Leaders Prepared Themselves For An Amazon Windfall?

When a tech giant opened up shop in one of Oregon’s tiniest counties, it resorted to a modest fiber-optic supplier to link its data centers to the internet.

The obscure nonprofit was created to connect Morrow County schools and hospitals to the internet. It suddenly started serving Amazon.

Amazon has spent $8 billion on four windowless computer complexes along the Columbia River near Morrow. Amazon received tax advantages worth over $50 million a year from a town of 12,000 people.

And a boon for certain public authorities. As Amazon repeatedly asked for tax advantages to fund growth, a small nonprofit lost its lucrative fiber-optic company.

Customers? Two of the nonprofit board’s own members negotiated Amazon’s tax agreements. Some complaint.

Amazon expects to expand, necessitating additional fiber-optic services. Some of those who negotiated with Amazon now stand to profit.

Morrow County Commissioner Jim Doherty: “They set themselves up for a windfall.” I have no doubt we would have constructed stronger accords without three or four people working behind the scenes.

Amazon’s entry into Morrow County brought hundreds of jobs and hundreds of millions of dollars in local construction investment. Popularity:

Amazon also sparked years of harsh recrimination among the county’s inhabitants and elected authorities, played out in public meetings and on social media.

The local utility wants to condemn farms for Amazon’s power cables. They’re unhappy that tax breaks reduce school funding. Residents argue about who should answer 911 calls.

Thousands of Amazon computers are guzzling power, forcing a town to use dirty fossil fuel electricity.

The company’s presence in Morrow County shows how rare 1980s Oregon tax incentives now benefit huge tech businesses, which play small municipalities off one other to maximize their tax savings.

The insider deal for Amazon’s fiber-optic provider shows how freebies distort small-town dynamics. The organization sold the business without competing bids, utilizing contested assumptions and odd features to minimize the price.

The nonprofit and fiber business bidders wouldn’t disclose the transaction. Amazon refused to respond if it knew its fiber-optic provider was owned by port and county officials with whom it negotiated tax and land arrangements.

Amazon claimed it operated appropriately when seeking tax benefits and engaging with the fiber-optic supplier and municipal government.

Amazon benefits from deals it negotiated with local leaders, including some who now run Amazon’s provider. Similarly, its continuous expansion in Morrow County will enrich public officials who arranged land sales or secured tax cuts.

A Small Oregon Town's Leaders Prepared Themselves For An Amazon Windfall
A Small Oregon Town’s Leaders Prepared Themselves For An Amazon Windfall

Oregon Data Centres

Morrow is Oregon’s second-largest port. It’s an economic hub and cause of dispute. The Oregon Department of Environmental Quality fined it $1.3 million in January because its effluent posed a health danger to local neighbors.

Morrow County covers 2,000 square miles but has a 12,000 population. Multiple people keep the community running. Boardman’s police chief is the assistant city manager and port commission president.

Such overlapping functions are essential to Amazon’s tax breaks. Morrow County civic leaders founded Inland Development Corp. 20 years ago to deploy high-capacity fiber links to government offices and hospitals.

Later, Inland served private firms, including Amazon, which constructed its first data center near the Port of Morrow in 2011 and needed fiber to connect its computers to the internet. Inland formed Windwave Communications to serve private enterprises to keep its nonprofit status.

Windwave’s revenues rose from $3.1 million in 2013 to $9.8 million in 2017. Amazon’s share of such business isn’t clear from the records.

In 2016, Inland’s board planned to sell Windwave. Instead of putting it on the market, they decided to sell it to friends.

All four buyers previously served on Inland’s or Windwave’s boards. Two remain on Inland’s board and port commission. The County commissioner and former port director are the others. Before buying Windwave, all four helped Amazon expand in Morrow County.

Gary Neal arranged land sales as port director. In 2017, port commissioners Jerry Healy and Marv Padberg approved land sales and tax reductions while negotiating to buy Windwave. (The port didn’t say how Healy and Padberg voted. After the acquisition, they sometimes recused themselves from voting on tech giant land transactions.)

Windwave’s fourth buyer, Morrow County Commissioner Don Russell, voted for the tax reductions and oversaw the business zone board that negotiated them.

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