SALEM, Ore. (KATU) — Gov. Tina Kotek has ordered the state to withdraw its land sale for a controversial data center near Salem.
Kotek ordered the Oregon Department of Administrative Services (DAS) to cancel the state’s contract with California-based technology company Verrus at the Mill Creek Corporate Center in southeast Salem.
Kotek announced the decision Thursday, saying the state should manage public land in a way that benefits local communities and reflects Oregon’s priorities for affordability, responsible economic development and protecting natural resources.
“This decision is about my responsibility to make sure state actions reflect Oregon’s values and serve the public interest,” Kotek said in a press release. “I believe in growing Oregon’s economy and welcoming new investment, including in the technology sector. But growth has to make sense for the community, for our infrastructure, and for our natural resources. Oregonians have made it clear they expect thoughtful, responsible decisions about projects of this scale, and I agree.”
In a statement to KATU, Verrus said it was disappointed in the governor’s decision.
“While we understand the community’s concerns around data centers, each project should be judged on its merit,” it said in part. “This decision was made unilaterally and without consultation — before Verrus had the opportunity to present its design, infrastructure plan and community benefit proposals to address these concerns and demonstrate our shared commitment to Oregon’s values.”
Salem leaders only recently revealed details of the $5.1 billion data center proposal that would have been one of the largest private investments in the city’s history.
According to a DAS spokesperson, DAS contractually agreed to sell a 32.23-acre section of land within the Mill Creek Corporate Center in May 2025, with a closing date for the transaction set for October 2026.
READ MORE | Massive $5.1B data center proposed for Salem draws praise and pushback
The proposal drew both support from local construction unions and concern from residents during recent council meetings.
“The protests that came out at last Monday’s City Council meeting was the most intense and emotional; in just the sheer numbers they’ve ever seen on any subject in Salem,” said Salem resident Brian Hines.
He went on to say, “I had mixed feelings, but now I think I’m happy [with Kotek’s decision], because it shows, like the sayings go at every protest that I’ve been to, you know, this is democracy in action when people come out loud, angry, sometimes impolite, but it got the city’s attention, and it looks like it got Gov. Kotek’s attention.”
Kotek said she supports economic development and new investment, including data centers but believes large projects should be evaluated for their impacts on infrastructure, water, energy and local communities.
“I’m proud to live in Oregon because the green, the cleanliness of it, but when you start bringing these data centers in, that’s not gonna be clean and green anymore,” said Hannah Shooting Bear, Salem resident and founder of Indigenous Now.
Verrus told KATU the data center would be built in a way that uses less water and electricity and would bring 75 permanent jobs and millions in tax revenue to Salem.
“Verrus came into the local community actively listening and seeking meaningful conversations with residents, neighbors, and business leaders,” Verrus told KATU in its statement. “That is why we proactively announced Oakline before a formal application was filed. We wanted to give everyone in the Salem community – including residents, neighbors, tribes, and city leadership – the opportunity to ask hard questions and help shape the project with a formal community benefits agreement.”
“We set out to show that Oregon could set an example for how better data centers can be built – ones that address the issues local communities face with digital infrastructure projects,” it continued. “Verrus has been participating in Oregon’s Data Center Advisory Committee and recently presented members with an overview of the Verrus’ model of responsible data center development that reduces water use, supports the electric grid, and delivers strong community benefits.”
“I mean, it’s true that if the United States doesn’t develop artificial intelligence, other countries will, and they may do it less responsibly than we can,” Hines said.
Hines said the issue for some is not the project itself, it’s what could potentially come as a result.
“With artificial intelligence, experts say we’ve got years, a couple of years to adjust, before the impacts on society are so great, you know, and so many people start being laid off,” he said. “You could see the outcry the City Council made last Monday; multiply that all across the country where people are losing their jobs, and just going, ‘No, we need to shut this whole thing down.’ I mean, it could become, you know, ugly fast.”
Salem City Council plans to meet this Monday to discuss a potential moratorium of AI data centers across Salem.
“I can see in the future that some other, you know, model is acceptable, but to me it would just have to be, you know, way more water resource, water and electricity efficient,” Hines said.
