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Pendleton agrees to delay data center payments

Package of incentives still on the table, $300,000 sewer extension completed
Antonio Sierra

East Oregonian

Published on January 23, 2018 7:42PM

Last changed on January 24, 2018 11:41AM


While data centers have turned into a legitimate industry on the west side of Umatilla County, Pendleton is still waiting for its first.

It’s not from lack of trying. In 2015, the city signed a 30-year lease with Makad Corp. to open a new, $45 million data center on the Airport Road extension.

More than two years later, the city is still without a data center or a rental payment for the 12 acres it leased to the Vancouver, Wash., company.

At an October 2015 meeting, Makad officials told the city council that the subsidiary that was going to handle the project, CyDat Industries, needed a two-year grace period on $2,460-per-month rent while it conducted feasibility studies.

The rent deferments are supposed to deliver longterm benefits if the data center opens: 45 jobs and up to $8 million in property tax revenue over the life of the lease, in addition to revenue from the rent, which will increase annually.

If Makad’s project came to fruition, the city would introduce its own set of incentives, including waived sewer connection fees, free electrical and fiber connections, a 5 percent reduction of permitting fees per job with a 50 percent reduction ceiling and assistance in qualifying for Pendleton’s enterprise zone, which would exempt the data center from paying property taxes for three to five years.

A $300,000 sewer extension has already been completed.

But most of those incentives aren’t close to being activated yet.

City manager Robb Corbett said Tuesday that the beginning of the lease payment had been pushed back to Jan. 1, 2019.

This is the second time the city has agreed to change the lease, which was supposed to start after Aug. 31, 2016. In November 2016, the city and Makad announced that the lease start date would be pushed back to Dec. 31, 2017.

Corbett declined to talk about the status of the data center project, referring questions to Makad.

When an email inquiring about the project was sent to Tawni Camarillo, Makad vice president of operations, Allan Fulsher, general counsel and vice president for Makad, responded.

“Progress continues to be made on the proposed data center,” he wrote. “When CyDat is prepared to announce any significant milestones in the development, you will receive a press release making that announcement.”

Corbett said Makad hasn’t started work on the land yet, but he’s still confident the project will move forward. Although the city has already made infrastructure investments at the property, Corbett said they can serve future industrial projects even if the data center falls through.

Makad has a spotty project development record in Eastern Oregon.

Although Makad developed the River Lodge and Grill in Boardman, its plans to build an ethanol plant and a fertilizer plant at the Port of Morrow in the early 2000s never got off the ground. Another port project — a 31-megawatt power plant — operated for a short time before it got wrapped up in a lawsuit with a partnering company. It was eventually shuttered and sold.

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Contact Antonio Sierra at asierra@eastoregonian.com or 541-966-0836.



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