Cle Elum’s Data Center Debate Is About More Than a Data Center

I have spent much of the last two decades looking at how infrastructure shapes where businesses grow, where capital flows, and where people can build a future. That experience is why I believe Cle Elum’s data center discussion deserves a more complete economic analysis than a simple vote of support or opposition.

The project matters. So do its consequences. But the bigger question is what kind of regional economy Upper Kittitas County wants to make possible over the next 10, 20, or 30 years, and what an individual development would actually contribute toward it.

Infrastructure often comes before industry

Railroads helped connect producers to markets. Roads and electricity expanded where businesses could operate. Telecommunications made whole new categories of work practical. Today, reliable power and fast digital connectivity perform a similar role for many industries, including advanced manufacturing, software, professional services, health care, and logistics.

That relationship is supported by research, not just intuition. The USDA Economic Research Service’s study of rural broadband found that counties with greater broadband access experienced greater subsequent economic growth. A related USDA analysis found stronger subsequent employment and income growth in rural counties with earlier broadband availability.

There is an essential limitation to that evidence: it establishes the value of connectivity, not that a privately owned data center automatically expands internet service for local homes or businesses. If more fiber capacity, open interconnection, or enhanced electrical infrastructure is part of the value proposition, we should identify exactly what will be built, who will own it, who can use it, and on what terms.

Two research frameworks help define the test

Charles L. Marohn Jr.'s Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity (Wiley, 2019) provides an essential municipal-finance lens. A community should measure the durable tax revenue and public value generated by development against the full lifecycle costs of the infrastructure and services it must support. For Cle Elum, that means testing taxable value, citywide versus General Fund receipts, operating costs, capital obligations, and legally available cash flow rather than relying on the proposed construction budget.

Susan Crawford's Fiber: The Coming Tech Revolution—and Why America Might Miss It (Yale University Press, 2019) provides a complementary connectivity lens. High-capacity fiber can enable economic opportunity, but ownership, competition, last-mile service, and access conditions matter. A data center's private connection is not by itself evidence of better broadband for surrounding businesses and residents.

These books inform how we evaluate public benefit. They are interpretive frameworks, not studies that predict the proposed facility's tax receipts, employment, or local fiber buildout.

What is actually proposed?

According to August 2026 reporting on the Blue Fern Development proposal, the facility was described as a roughly $200 million investment with a planned 20-megawatt electrical load and approximately 20–40 permanent jobs. The developer also described a closed-loop cooling system and roughly 80,000 gallons of first-year water use. Those are reported developer estimates, not independent engineering or fiscal findings.

That same reporting quoted Puget Sound Energy describing a reliability review and customer-funded upgrades. Those claims are worth examining through utility documentation, as are the site’s land-use rights and the possible effect of the city’s moratorium. Questions about noise, backup generators, wildfire exposure, water, heat, and long-term power supply are not distractions from economic development. They are part of its cost.

We should also recognize that a data center is not a large employer relative to its investment. Its direct job count should be stated plainly. A credible case must stand on the whole package of measurable public benefits, not an exaggerated promise of employment.

BEAD is separate, but it could be complementary

The federal Broadband Equity, Access, and Deployment (BEAD) program funds qualifying broadband projects in unserved and underserved areas. It is an independent public-access initiative, not a data-center construction subsidy. There is no established BEAD funding connection to the proposed Cle Elum facility.

Washington's original federal allocation was about $1.228 billion. The Washington Department of Commerce's February 2026 announcement identifies $736.3 million in approved federal deployment funding and approximately $1.020 billion in total deployment investment after matching contributions, across 238 project areas. That deployment includes fiber, fixed wireless, and satellite rather than only fiber-to-the-premises.

Where might these two tracks complement each other? Only where confirmed project geography, provider agreements, fiber routes, interconnection opportunities, and funding conditions support it. Coordinating construction may be valuable; assuming that a private data-center network gives a local household broadband access would not be.

Washington provides evidence, not a Cle Elum forecast

Washington’s 2026 legislative audit of urban data center tax preferences found that qualifying facility investments corresponded with at least $111 million in additional assessed value and about $1.2 million in additional property taxes across the reviewed properties. It also reported permanent and temporary jobs. But the auditors could not determine how much of that investment would have occurred without the tax preference.

That is precisely how Cle Elum should approach comparisons with other communities. A result elsewhere demonstrates what may be possible. It does not establish what this project will deliver, how much of the investment will be taxable, or how much revenue will be available to the city after obligations and costs.

What small-town cases actually demonstrate

We also examined seven communities with operating data centers, negotiated agreements or rejected proposals. Their results vary widely, and their tax structures are not interchangeable. That is the lesson: public value depends on the contract, tax treatment, infrastructure cost and accountable reporting, not the headline size of the project.

Prineville, Oregon offers a tangible example of revenue connected to electricity sales. City officials reported that annual power-related franchise-fee receipts had grown from roughly $430,000 in 2011 to nearly $11 million in 2026. That is meaningful operating revenue, but it comes from an established, multi-campus cluster operating under Oregon-specific arrangements and property-tax incentives. Read the reporting and city officials' statements.

Hermiston, Oregon provides an unusually clear view of negotiated payments. The city's published enterprise-zone FAQ identifies a $2.65 million payment in November 2025 and an additional $542,386 in regular property taxes to local taxing districts. Crucially, certain development and annual payments are divided between the city and Umatilla County, while other payments support separate districts. None should be described as unrestricted Hermiston General Fund income. Review Hermiston's payment structure.

New Albany, Ohio reported approximately $10 million in 2024 data-center community development charges. Its negotiated community authority charges, income-tax receipts, abatement conditions and minimum-payment arrangements illustrate the value of formal public-benefit terms. They do not establish what Washington law permits Cle Elum to charge. Review New Albany's municipal finance explanation.

Quincy, Washington offers our closest statewide fiscal precedent. Washington's Data Center Workgroup documented a reduction in Quincy's city levy rate from $3.12 per $1,000 of assessed value in 2006 to approximately $0.88 in 2025, alongside a larger tax base. This reflects a multi-campus experience over many years, not a verified benefit attributable to any single proposed facility. See Washington's workgroup findings (PDF).

The counterexamples are equally instructive. In The Dalles, Oregon, city records released to Oregon Public Broadcasting showed that Google's facilities used roughly 434.4 million gallons of water in 2024. The city and Google also arranged significant water infrastructure improvements. That experience highlights both the potential for developer-funded public assets and the need for independent water and utility analysis. Read OPB's documented account and the city's objections.

In La Pine, Oregon, council members declined to proceed with a proposed 20 MW data-center land sale in May 2026. City staff reported discrepancies between developer job and revenue projections and available utility information. That is a particularly useful process comparison for Cle Elum's reported 20 MW proposal, but it was a rejected project, so there are no operating fiscal outcomes to measure. Read the City of La Pine council record (PDF).

Finally, Forest City, North Carolina illustrates both brownfield reuse and concentration. The state's environmental department says a Meta redevelopment became Rutherford County's largest individual tax-revenue source, accounting for roughly 14% of county revenue in its published example. That is a county-level figure, not a Forest City municipal tax estimate, and reliance on one large taxpayer has its own risks. Read North Carolina DEQ's brownfields case summary.

The City Heights judgment changes the financial conversation

Cle Elum faces a serious financial challenge arising from the City Heights dispute and its Chapter 9 bankruptcy case. The federal bankruptcy court’s July 14, 2026 opinion discusses an approximately $26 million judgment as of May 2025. This is a very different scale of liability from an ordinary annual operating expense.

Could a new tax-generating development help? Potentially. A more diversified tax base and sustained, genuinely incremental revenue could improve the city’s financial flexibility. But a project’s construction budget is not equivalent to taxable assessed value, total local taxes do not all flow to Cle Elum, and even municipal receipts may be allocated or legally restricted.

The city’s 2026 budget says that 20% of property-tax revenue is dedicated to the street fund. The Kittitas County Assessor’s levy reports provide the proper baseline for evaluating assessed value and tax rates. Washington’s levy restrictions, changes in assessments, tax incentives, public costs, and any bankruptcy plan all affect how much money might ultimately be available for debt service.

The linked 31-page preliminary assessment tests illustrative revenue and cost scenarios, including a middle-case citywide net-benefit illustration of approximately $436,000 annually before separating fund-level availability and legal constraints. These figures are assumptions for sensitivity analysis, not a finding of what Blue Fern will actually pay.

What we should insist on knowing

Supporters and skeptics should be able to ask the same hard questions and get documented answers. Before treating projections as community benefits, I would want to see:

1. Taxable value and revenue: What new real and personal property will actually be assessed, under which exemptions and levy rules, and on what schedule?
2. Power and costs: Who funds grid upgrades and ongoing service needs, and how are existing customers protected from cost shifting?
3. Water, noise, emergency preparedness: What do independent engineering and environmental analyses show, and what operating conditions will be enforceable?
4. Fiber and broader access: Will this project create an identifiable opportunity for local businesses, providers, public services, or residents to obtain better connectivity?
5. Municipal net benefit: After public costs and fund restrictions, what recurring dollars remain, and could any legitimately support obligations under an eventual debt-adjustment arrangement?
6. Accountability: What is guaranteed in writing, how will it be measured, and what happens if expected benefits do not materialize?

These questions should be answered with documents, independent estimates, and clear commitments. An economic benefit that depends on a promise is not the same as a benefit the community can rely on.

Protecting this place and building its future

I care deeply about what makes Roslyn, Cle Elum, and the surrounding towns special. Preserving their identity matters. So does making it possible for our children, local businesses, and future employers to remain here and succeed.

Those goals do not necessarily conflict. But neither do they automatically align. The real work is separating opportunities from assumptions, short-term excitement from lasting infrastructure, and private benefit from public value.

It would be a mistake to judge this proposal only by the number of jobs inside the building. It would also be a mistake to assume that building the facility will transform our economy. Both conclusions skip the difficult work of understanding the terms.

We have an opportunity to ask better questions, insist on credible answers, and consider what a financially responsible outcome would look like. That is the discussion I hope these reports help advance.

The question is not simply whether we want a data center. It is what the development would measurably contribute to Upper Kittitas County, at what public cost, and under what enforceable conditions.

Prepared by Karl Ohlemann · Oct 2026 · karlohlemann.com · karl.ohlemann@ksigadvisors.com

Editorial disclosure: This is an independent community research perspective, not an official City of Cle Elum report, an engineering opinion, a legal opinion, or an endorsement by a developer. All financial modeling is illustrative until project-specific inputs are independently validated.