The decision creates a major new obstacle for Verrus’ proposed Oakline at Mill Creek campus days after Salem City Council voted 8-0 to examine future nondisclosure agreements and create a data center task force.
Gov. Tina Kotek has directed the Oregon Department of Administrative Services to terminate the state’s contract to sell approximately 32 acres at the Mill Creek Corporate Center for a proposed data center project.
The state-owned land was connected to Verrus’ proposed Oakline at Mill Creek campus in southeast Salem. Ending the sale creates a significant new obstacle for the project, which Verrus had described as a roughly 75-acre development with three data center buildings and an electrical substation.
“This decision is about my responsibility to make sure state actions reflect Oregon’s values and serve the public interest,” Kotek said.
Kotek said Oregon remains open to technology investment and economic development, but projects of this scale must make sense for local communities, infrastructure and natural resources.
The governor’s office said the state will continue working with local governments, businesses and communities on economic-development opportunities that create jobs while reflecting Oregon’s long-term priorities.
Kotek also convened a Statewide Data Center Advisory Committee in January to recommend policies addressing data center growth, utility costs, infrastructure investment, water use and environmental effects. Its recommendations are due by October.
The decision came days after hours of emotional testimony over the proposed data center at a Salem City Council meeting.
The Salem City Council unanimously approved two policy motions early Tuesday morning.
Neither council motion stopped the project.
The council did not vote to approve, deny, pause or impose a moratorium on Verrus’ proposed Oakline at Mill Creek campus. The project discussion under agenda item 5.1 was an informational report, not a land-use hearing or approval decision.
Instead, councilors voted 8-0 to direct city staff to explore restrictions on future nondisclosure agreements involving data centers. They also voted 8-0 to create a task force that will hold public town halls and recommend data center policies by the end of the year.
Councilor Irvin Brown was absent.
What the Council Voted On
Councilor Micki Varney introduced the first motion, directing staff to “explore options for prohibiting the city from entering into non-disclosure agreements with entities seeking to develop land in Salem for use as a data center.”
The motion does not immediately prohibit those agreements. Staff must study the legal and policy options and return to the council.
Varney said the city’s handling of the Verrus proposal had damaged public confidence.
“Our community learned about a potential data center at Mill Creek Corporate Center only after a non-disclosure agreement signed 16 months earlier was lifted,” Varney said. “That was a violation of public trust.”
She emphasized that the vote did not immediately change city policy.
“This motion doesn’t make any policy change tonight,” Varney said. “It simply directs staff to study the issue and bring back options.”
Mayor Julie Hoy also supported the motion.
“This all did come as a surprise, I think, to each of us,” Hoy said. “We owe it to the public to vet these kinds of opportunities, so to speak, and certainly the companies behind them.”
The second motion created a task force of no more than nine members, including councilors, three residents at large, union representatives and at least one workforce-development representative.
The group must hold at least three town halls, examine policies used elsewhere and return to council by Dec. 31 with recommendations for what the motion called a “rational, reasonable and responsible policy for data center management.”
“This motion doesn’t change city policy tonight,” Varney said during the discussion. “What it does is authorize the task force.”
She said the goal was to ensure that future decisions involving Verrus or other data centers include public and council participation from the beginning.
The council also took procedural votes to pause and resume testimony and extend the meeting. Those votes managed the meeting and did not determine whether Oakline could be built.
Why People Were Angry
Most speakers opposed the project or demanded that Salem pause it while more information is gathered.
Their strongest complaint involved the city’s nondisclosure agreement with Verrus.
The city says the agreement was executed in March 2025. Salem was released from it July 8, 2026, and City Manager Krishna Namburi publicly disclosed the proposal at the July 13 council meeting.
During the confidential period, city employees participated in an introductory meeting, a development-process consultation, three technical meetings and a conversation about preserving Oregon white oak trees.
City staff said no project approvals, negotiations or binding commitments occurred under the agreement. Residents nevertheless said the secrecy prevented meaningful public participation and damaged their trust in the city.
Speakers also raised questions about electricity demand, water use, wastewater, noise, backup generators, traffic, emergency response, wildlife and the project’s three-year property-tax exemption.
Many questioned whether approximately 75 projected permanent jobs would justify the demands of a 75-acre development.
Those concerns are not findings that Oakline will cause those effects. No formal development application has been submitted, meaning the city does not yet have the final engineering studies needed to determine the project’s actual impacts.
Construction workers, union representatives and apprenticeship advocates offered a different view. They said the project could support years of construction employment, training opportunities and spending at local businesses.
What Is Known About Oakline
Verrus is exploring a three-building data center campus and electrical substation near Turner Road SE and Deer Park Drive SE in the Mill Creek Corporate Center.
The company has projected an investment exceeding $5 billion and approximately 75 permanent jobs, in addition to construction work.
Verrus has told the city that the project would include closed-loop cooling, battery-first backup power, a grid-interactive electrical system, native landscaping and low-impact lighting. It has also discussed placing Oregon white oak trees under a conservation easement.
Those are company descriptions, not verified city findings.
The city has not received a complete site plan, final water projections, wastewater estimates, electricity requirements, transportation analysis, noise study or generator operating plan.
Verrus has already received approval for a standard three-year enterprise-zone property-tax exemption. The request was submitted to the Marion County assessor May 27 and did not require a City Council vote.
What Modern Data Centers Can Do
Data centers can differ significantly in their electricity demand, cooling systems, water consumption, noise and environmental effects.
During an SBJ podcast interview recorded before the council meeting, developer Aaron Stickney said newer facilities can use closed-loop cooling, behind-the-meter electricity generation and sound controls to reduce some of the impacts associated with older data centers.
“Don’t just say no,” Stickney said. “Research on your own … or just ask the questions.”
Stickney is also leading The Cannery redevelopment on Salem’s riverfront. He has said the broader project represents approximately $300 million in planned investment in Salem across its phases.
When Stickney spoke during the City Council meeting, audience members booed him and a piece of paper was thrown toward him. The presiding officer warned the audience against disruptive behavior as Stickney continued his testimony.
Stickney told councilors that he believed a data center could benefit Salem if enforceable guidelines were established. He also argued that the city should not provide the project with a property-tax abatement.
Stickney later prepared a seven-page pre-development memo outlining ways he believes the project could address concerns raised during the council meeting. The memo discusses closed-loop and low-water cooling, on-site power generation, battery backup, noise controls, traffic management, emergency planning and protections for Oregon white oak trees. It also recommends that commitments involving water use, electricity, noise and environmental performance be quantified, independently verified and included in enforceable agreements or public reporting requirements. The document is not a formal land-use application, a city analysis or a commitment from Verrus; it represents Stickney’s proposed framework for evaluating whether the project could be developed responsibly. Readers can review the full Oakline at Mill Creek pre-development memo here.
Stickney, a co-founder of SilverSphere Capital, supports allowing a data center in Salem if strict conditions are met. His company’s website identifies data centers among the types of development in which he has experience.
He argued that the central questions should be whether a facility places demands on the public electrical grid, how it is cooled and whether it creates unacceptable environmental effects.
Stickney also made broader claims that modern facilities can have nearly zero water use, little noise and no significant environmental impact. Those statements should not be applied to Oakline without project-specific evidence.
Closed-loop cooling can reduce water consumption by recirculating fluid, but the phrase alone does not establish how much water a facility will use. Behind-the-meter power can reduce dependence on the public grid, but Verrus has not submitted a final electrical plan showing whether Oakline would use that model.
Noise barriers and newer cooling equipment can also reduce sound, but Salem still needs a study measuring expected noise at nearby properties.
Councilor Vanessa Nordyke said Verrus must answer those questions directly rather than relying on city officials to represent the company.
“I don’t want to play messenger, not when facts can change,” Nordyke said. “Data can change. Permits can change.”
Verrus representatives had been scheduled to answer council questions but left before the presentation. City staff said they left because they did not feel safe following repeated audience outbursts.
Timeline of the Project
2005: The Mill Creek Corporate Center and its urban-renewal area were established to prepare industrial land for development.
2014: Salem’s development code identified data centers as an allowed use in the Employment Center zone.
March 2025: The city executed its nondisclosure agreement with Verrus.
May 27, 2026: Verrus submitted its application for the three-year enterprise-zone exemption.
July 8: Salem was released from the nondisclosure agreement.
July 13: Namburi publicly disclosed the proposal.
July 27 and 28: Council heard hours of testimony, ordered the NDA review and created the task force.
What Happens Next
Verrus must decide whether to submit a formal development application.
Because data centers are already allowed in the Employment Center zone, the company is not currently expected to seek a zone change.
Once an application is declared complete, nearby property owners and neighborhood associations would receive notice. The public would have 14 days to submit written comments.
City staff could approve the application, approve it with conditions or deny it based on the development standards that apply to the property. Parties would then have 15 days to appeal, with a public hearing expected before Salem’s hearings officer.
The city may separately negotiate a community benefits agreement covering matters such as infrastructure responsibilities, monitoring, reporting or workforce commitments.
The task force and NDA review will move forward at the same time, but neither prevents Verrus from submitting an application.
That timing could be important. City Attorney Dan Atchison told councilors that Oregon’s “goalpost rule” generally requires an application to be reviewed under the regulations in effect when it is submitted.
For now, Salem still does not know exactly how much electricity or water Oakline would use, which infrastructure improvements it would require, how much noise it could produce or which of Verrus’ promises would become legally enforceable.
