SALEM, Ore. The Salem City Council voted unanimously Aug. 3 to begin the process of imposing a moratorium on AI data centers and to start rewriting the city’s zoning code to address them.
What the council did not do, and what several councilors said plainly from the dais, is enact a moratorium. Nor does the action appear to reach Oakline at Mill Creek, the $5.1 billion campus proposed by Verrus, which filed its application three days before the meeting.
The single motion, read by Council President Linda Nishioka and seconded by Councilor Vanessa Nordyke, directed staff to initiate the moratorium process and adopted Resolution 2026-36 to initiate zoning code amendments. All eight councilors and Mayor Julie Hoy voted aye.
“Supporting this motion tonight doesn’t establish a moratorium actually tonight,” Councilor Micki Varney said before the vote. “It just starts the process, and that process we can stop at any time if we don’t need it.”
The distinction matters. Under state law, a moratorium requires 45 days’ notice to the Oregon Department of Land Conservation and Development, a public hearing and formal findings. City Attorney Dan Atchison said staff expected to send that notice by Monday, Aug. 10, putting the earliest hearing at the second September council meeting: Sept. 21, by his estimate.
The meeting ran nearly six hours. Council suspended its 10 p.m. rules deadline four times, adjourning at 11:45 p.m. Dozens testified.
Council paused public comment partway through to take the vote, then resumed testimony for roughly two more hours. Councilor Mai Vang raised a point of order about the sequence, saying she wanted to hear all testimony before deciding; she voted aye. A later speaker asked council to change its rules so all testimony is heard first.
What a Moratorium Cannot Touch
Verrus submitted its application July 31, the Friday before the meeting.
Under ORS 227.178, a local government must decide an application based on the standards in effect when it was submitted, and Atchison said that statute continues to apply even when a moratorium is in place.
That timing drew much of the evening’s anger, with speaker after speaker describing the filing as deliberate. Whether it was strategic or coincidental, the legal effect appears the same: a moratorium, if adopted, would govern future applications.
Several speakers asked that any moratorium be made retroactive to cover applications filed in the past six months. Atchison did not address retroactivity directly, but said someone opposed to a moratorium could seek an injunction or writ of review, and that a failure as simple as skipping the 45-day notice could void it.
“We have to get it right as well,” he said. “We don’t want it to be overturned on appeal because that just sets us all back.”
That framed the meeting’s central tension, put to Atchison by Councilor Paul Tigan: how does a council move fast enough to satisfy an angry public without moving so fast it loses in court?
A Definition Written in 2014
The site is zoned Employment Center at Mill Creek Corporate Center, where data centers are a permitted use, meaning that if an application meets applicable standards, the city is obligated to approve it. Salem added them to its code in 2014, and Atchison said the term was defined without reference to size or energy use.
“A data center can fit inside an office and could still meet the definition of data center versus one that takes up several acres,” he said.
Planning Administrator Lisa Anderson-Ogilvie confirmed there are no data-center-specific approval criteria; applications are reviewed against generally applicable standards for parking, setbacks, height, noise and traffic. She added that if the city later finds misinformation or falsehood in an application, it can revoke the approval or permit.
That may prove significant. As of the meeting, the city had not received a complete site plan, final water projections, wastewater estimates, electricity requirements, transportation analysis, noise study or generator operating plan.
Which raises the question the code amendment process now has to answer: what should Salem require an applicant to prove before approval, rather than verify afterward?
Power
The statewide picture is not seriously disputed. Oregon data centers consume roughly 11% of the state’s electricity, a share researchers project could approach a quarter within three to four years. The Oregon Citizens’ Utility Board notes that Portland General Electric’s data center growth between 2019 and 2024 was equivalent to adding more than 162,000 households to its system.
Residential rates have climbed. PGE and Pacific Power residential rates are more than 50% higher than five years ago, more than twice inflation since 2020. Analysis of federal energy data has found residential demand on PGE’s system grew roughly 1% a year over the past decade, while demand from the industrial class data centers grew nearly 70%.
The regulatory picture shifted this summer. Under the 2025 POWER Act, the Oregon Public Utility Commission approved a separate rate class for customers above 20 megawatts. PGE data center rates rise about 29%; residential rates fall 1.3%. Commission Chair Letha Tawney said the change ensures costs created by data centers are more accurately reflected in their rates.
Testimony split on what that means. Opponents cited rate pressure as reason to reject the project; supporters said the new structure is precisely what prevents cost-shifting onto households.
Verrus describes a grid-interactive design using battery storage rather than diesel generators, with software allowing the facility to cut demand during peak grid stress. That is load flexibility, not generation: the facility would remain a large net consumer, but one the utility could potentially turn down.
Is a flexible large load meaningfully better than an inflexible one, and if so, how would a city verify and enforce that flexibility over the life of the building?
Water
Nordyke pressed the point that Salem has declared a water emergency and asked why that does not authorize the city to act on land use. Atchison’s answer: emergency declarations cannot suspend state law.
He identified water as his first instinct for moratorium findings, citing the U.S. Army Corps of Engineers’ planned Detroit Reservoir deep drawdown this fall, noting the North Santiam supplies 100% of Salem’s drinking water and that the drawdown is annual, not one-time.
The underlying question, how much water the project would use, remains unanswered.
Verrus has described closed-loop cooling, and the distinction is real. Roughly 80% of water withdrawn by data centers using conventional evaporative cooling evaporates, according to the Environmental and Energy Study Institute. Closed-loop systems recirculate coolant in sealed piping; Vantage Data Centers reports peak use of about 22,000 gallons per day at a closed-loop Wisconsin campus, against roughly 5 million for a comparable evaporative facility.
Published research complicates the label. A 2026 analysis of data center demands on public water systems found a facility described as closed-loop had nonetheless secured 8 million gallons per day of capacity for evaporative cooling during peak heat. Several speakers noted that closed-loop systems also require an initial fill and flush, and discharge chemically treated water.
So the question is narrower than it has been asked. Not what the facility averages, but what peak-day water and wastewater capacity Verrus is requesting, and how that interacts with a drawdown year.
Noise
Multiple speakers described low-frequency noise. The technical literature supports the general claim: cooling systems and generators produce sound in the 20-to-200-hertz range that travels farther and penetrates buildings more readily than higher-frequency noise, and acoustic consultants report generator load tests can remain audible up to a mile on still nights.
The regulatory gap is documented. Most ordinances, including Salem’s, rely on A-weighted decibel averages, which discount low-frequency content, meaning a facility can be technically compliant while neighbors report disturbance.
Mitigations are also documented. Acoustic louvers and shrouds cut source noise by 5 to 15 decibels, variable-speed fans reduce output in cooler hours, and immersion cooling largely eliminates fan noise. Some jurisdictions apply a decibel penalty unless a developer proves through frequency analysis that its noise is not tonal.
In Michigan, Verrus told officials a comparable project would hold sound at or below roughly 50 A-weighted decibels at the property boundary. Whether Salem asks for a similar commitment, in what units, measured by whom and enforced how, is now a code amendment question.
The Applicant
Verrus emerged from stealth in 2024 as a venture of Sidewalk Infrastructure Partners, an Alphabet spin-out. CEO Nelson Abramson spent 20 years at Google, including a decade in data centers, and later led infrastructure at X. Its head of energy previously directed energy strategy at Meta. The company says its team has collectively deployed 13 gigawatts of capacity.
That capacity was deployed at prior employers. Verrus has not completed a data center of its own. Its flagship project, Project Flex in Lyon Township, Michigan, remained unapproved as of this summer after a fourth application that included a $10 million community benefits package. In May, an attorney representing the company notified the township that further delay would bring legal action including injunctions and damages. Crain’s Detroit Business reported officials there viewed the project as effectively unavoidable under state zoning law.
Salem’s circumstances differ, but the posture, asserting a by-right entitlement under industrial zoning and filing before local rules change, is recognizable. How much weight should a city give a company’s design commitments when it has no operating facility to point to?
The Money
Verrus applied to the Marion County Assessor on May 27 for an enterprise zone property tax abatement and was approved for three years, according to the city’s published project page. House Bill 4084, which revised Oregon’s enterprise zone rules, took effect June 5.
Varney raised the abatement from the dais, asking whether an exemption follows the tax lot when a project changes footprint. Community Planning and Development Director Kristin Retherford said the city does not process enterprise zone applications and had not seen this one, and committed to research it and report back.
The scale is unusual: the city puts Salem’s tax base at roughly $16.7 billion against projected investment above $5 billion. A supporter testified the city would eventually collect $10.5 million annually: $9 million to the General Fund, $1.5 million to the Community Services Levy.
No one at the meeting tested that figure, and two things complicate it.
Under Measure 50, new construction enters the tax roll at real market value multiplied by the county’s changed property ratio, not at construction cost. Marion County’s aggregate assessed value has run near 45% of real market value, though the ratio is set by property class. A $5.1 billion investment does not become $5.1 billion of taxable value.
The $10.5 million also appears to describe the city’s share alone. The consolidated rate for Salem properties in Marion County has run near $20 per $1,000 of assessed value, of which the city collects roughly a third. The rest flows to Salem-Keizer Public Schools, Marion County, Chemeketa Community College and other districts, and the three-year abatement suspends their share too.
Statewide, data centers will avoid more than $450 million in Oregon property taxes in 2026, and the Oregon Center for Public Policy reports Oregon schools lost $275 million to such abatements in 2024.
One revenue stream is not abated: the city’s 5% franchise fee on utilities using its right of way, which begins on day one. No public estimate of it exists.
The projected 75 permanent jobs also drew skepticism. Industry figures put roughly 9,300 direct data center workers across Oregon’s 120-plus facilities: fewer than 80 per site. Salem’s Employment Center zoning states its purpose as providing long-term employment opportunities.
What Happens Next
Staff will prepare findings, schedule a hearing and send the 45-day notice. Atchison estimated code amendments realistically take 90 to 120 days, against a moratorium of 120 days with possible extension. Resolution 2026-36 is silent on Planning Commission referral, so amendments return directly to council unless that changes.
The Verrus application proceeds under existing code.
Nordyke, who seconded the motion, defeated Hoy in the May primary and takes office as mayor next year. Much of the code-writing will land on the council she leads.
One piece of context sits alongside all of it. Pew Research Center reported in June that 49% of U.S. adults use AI chatbots and 60% read AI-generated summaries in search results. The demand these buildings serve is widely distributed. Where they go, and on what terms, is what Salem now has roughly four months to decide.