Executive Summary
The Dalles is experiencing significant industrial momentum led by Google’s data center expansions and infrastructure donations, though the city identifies a deficit in large-scale (>20 acres) buildable industrial sites. Entitlement risk is pivoting as the city transitions to a professional Hearings Officer system to streamline quasi-judicial approvals. However, developers face rising costs due to new FEMA-mandated habitat assessments and substantial infrastructure requirements for hillslope developments.
Development Pipeline
Industrial Projects
| Project | Applicant | Key Stakeholders | Size | Current Stage | Key Issues |
|---|---|---|---|---|---|
| Google Data Center Expansion (Design LLC) | Google (Design LLC) | City Council, Port of The Dalles | 90 Acres | Right-of-Way Vacation Approved | Management of truck traffic and campus security integration. |
| Six-Unit Storage Facility | Joe Stewart | Planning Commission, AKS Engineering | 3,450 sq ft | Approved (CUP) | Landscaping waivers and commercial zone compatibility. |
| Google Water Infrastructure | Public Works Department | 4.5 Acres (Site) | Accepted by City | Redundancy for city water supply; total improvement value of $19.6M. | |
| Westside Interceptor Phase 2 | City of The Dalles | Oregon Cherry Growers LLC | N/A | Contract Awarded | UPSizing sanitary sewer main; demolition of spur crossing. |
> Additional projects are included in the Appendix below.
Entitlement Risk
Approval Patterns
- Infrastructure Mitigation: The city consistently approves industrial-adjacent projects that mitigate their own impacts, such as Google’s infrastructure donations and right-of-way vacations that shift truck traffic from public streets to private property.
- Staff-Driven Consensus: Major development permits, including Conditional Use Permits (CUPs) for storage and maintenance facilities, frequently receive unanimous approval when staff findings demonstrate compliance with noise and dust criteria.
Denial Patterns
- Retroactive Funding Skepticism: The Urban Renewal Agency (URA) shows a firm pattern of denying reimbursement for project costs incurred prior to formal grant agreements, citing the need to safeguard public funds and maintain program integrity.
- Neighborhood Impact Sensitivity: While the council ultimately follows existing code (the "fixed goalpost rule"), projects on steep slopes or those with perceived geologic instability face heavy scrutiny and organized residential opposition.
Zoning Risk
- Industrial Land Deficit: The 2025 Economic Opportunities Analysis (EOA) identifies a critical shortage of buildable industrial sites larger than 20 acres, which may trigger future pressure for Urban Growth Boundary (UGB) expansions.
- FEMA Flood Plain Mandates: New FEMA "Pikum" mandates require developers in flood-prone areas (Lone Pine, Chenowith Creek) to provide "no net loss" habitat assessments, shifting significant environmental study costs from the city to the applicant.
Political Risk
- Google Sentiment: While the council largely supports Google’s growth due to SIP revenue and donated infrastructure, there is emerging public pressure regarding the company's water and electricity consumption levels.
- Immigration Policy Conflict: The city recently adopted a resolution expressing concern over federal immigration enforcement (ICE), signaling a potential policy friction point between local governance and federal agency operations.
Community Risk
- Public Trust and Transparency: Community surveys indicate that public trust, specifically regarding how "Google money" is spent and the impact of federal mandates, is a top strategic concern for the city.
- Traffic and Pedestrian Safety: Residents are increasingly vocal about industrial truck traffic and the dangers of high-speed micro-mobility (e-bikes) on downtown sidewalks.
Procedural Risk
- Transition to Hearings Officer: The city is moving quasi-judicial decisions (CUPs, variances) to a professional land-use attorney (Hearings Officer) to reduce political bias and meeting cancellations.
- Construction-Related Closures: Major upcoming infrastructure projects (First Street, Federal Street Plaza) will cause year-long closures, creating significant logistical challenges for businesses and industrial transport in the downtown core.
Key Stakeholders
Council Voting Patterns
- Unanimous Reliability: The current council (Richardson, Randall, Ring, McLofflin, Renan) is remarkably consistent, often voting unanimously on infrastructure contracts, budget adoptions, and legislative cleanups.
- Fiduciary Guardians: Members like Councilor Richardson frequently query the "why" behind fee increases and reimbursement requests to ensure taxpayer value.
Key Officials & Positions
- Matthew Cleaves (City Manager): Focuses on fiscal sustainability and regional collaboration (e.g., Klickitat County airport agreements).
- Jake Anderson (Economic Development Officer): Managing the Urban Renewal Agency’s final years and the implementation of new incentive guidelines.
- Joshua Chandler (Community Development Director): A key figure in the transition to the Hearings Officer system and the EOA update.
Active Developers & Consultants
- Google (Design LLC): The primary industrial engine, currently focusing on campus security and traffic management entitlements.
- AKS Engineering & Forestry: Frequently represents industrial and residential applicants (Google, Joe Stewart, Jason Alfred) in complex permit and variance hearings.
- KPFF Engineers: Long-term consultant for the city’s major First Street streetscape and riverfront projects.
Analysis & Strategic Insights
Industrial Momentum vs. Entitlement Friction
The pipeline remains strong for data centers and utility-grade infrastructure, but "flex industrial" and smaller manufacturing may struggle with current site constraints. The EOA’s finding of a deficit in 20+ acre sites suggests that any developer bringing a large-parcel solution will have significant leverage in UGB expansion discussions.
Probability of Approval
- Warehouse/Logistics: High, provided they are sited within the Port area and utilize the city’s new "laydown yard" allowances in non-residential zones.
- Affordable Housing: Very High, as the city is proactively seeking pass-through grants and amending code to allow residential care facilities in all zones.
Emerging Regulatory Tightening
Developers should prepare for Option 2 of the FEMA flood plain compliance, which requires private habitat assessments costing between $5,000 and $20,000. Additionally, the city is exploring a mandatory Business License Program to improve economic data collection, which could introduce new reporting requirements for all industrial operators.
Strategic Recommendations
- Pre-Entitlement Sequencing: Engagements requiring quasi-judicial hearings should be timed for after April 2026 to utilize the new Hearings Officer system, which is expected to be more legally defensible and efficient than the Planning Commission.
- Site Positioning: Avoid properties currently being re-mapped into the 2026 FEMA flood plain areas (Mill Creek, Chenowith Creek) to bypass new habitat assessment burdens.
- Retroactive Requests: Do not begin any physical work before an Urban Renewal Grant is executed; the board has established a hard "no" on retroactive reimbursements regardless of the project's community value.
Near-Term Watch Items
- Wastewater Master Plan Update (May 2026): Expected to dictate future SDC increases and capacity for new manufacturing users.
- Economic Opportunities Analysis Final Adoption: Will set the policy framework for industrial growth for the next 20 years.
- First Street Construction Closures: Anticipated 18-month duration starting early 2026; will impact all logistics routing through the historic core.