Kotek pauses data center permits. Here's where Salem's Verrus project stands
Gov. Tina Kotek has told Oregon's environmental regulators to stop issuing air and water pollution permits for new or expanded data centers until July 1, 2027, a move widely described as a de facto statewide pause on large projects. In Salem, the company behind a proposed multibillion-dollar AI data center in the Mill Creek Corporate Center says the order does not change where its project stands today.
Kotek made the request in an Oct. 9 letter to Oregon Department of Environmental Quality Director Leah Feldon. Neither the governor's office nor the agency announced it. The letter became public Tuesday after Oregon Rural Action, a La Grande nonprofit, began sharing it, and OPB obtained the exchange from Kotek's office.
What the order does
"This time limited pause will provide an opportunity for me to evaluate and digest recommendations forthcoming from the Advisory Committee, and to provide space for policy and/or regulatory reforms that may be considered in the upcoming 2027 session of the Legislature with my support," Kotek wrote, according to the Oregon Capital Chronicle.
OPB reported the letter also tells DEQ to stop processing requests from cities and counties that want to renew or modify their wastewater permits to take discharge from data centers. Without air or water permits, OPB noted, most large "hyperscale" data centers could not be built in Oregon on public or private land.
DEQ told the trade publication Data Center Dynamics that it is "still evaluating implementation of the order, but we have put a pause on the issuance of new or renewed air and water quality permits for data center facilities." The agency said the pause covers both new and pending applications and that it will contact applicants and affected communities once its analysis is done.
The order builds on earlier steps. Kotek previously paused state land deals for data center projects through the same July 2027 date, and over the summer she directed the state to end its contract to sell about 32 acres at the Mill Creek Corporate Center for the Salem project, the Statesman Journal reported.
Where Salem's Verrus project stands
Verrus, a Silicon Valley developer, is proposing a data center campus called Oakline at Mill Creek in southeast Salem. The Salem Reporter has described it as a $5.1 billion project. According to the City of Salem's project page, the company expects to bring 75 permanent jobs, and its investment is projected at more than $5 billion.
On Wednesday, the Salem Reporter reported that Verrus said the governor's directive will not affect the current stage of its buildout. That stage is local land use review. Verrus, through its subsidiary Alderstone LLC, filed a land use application with the city on July 31. On Aug. 28, the city notified the company the application was incomplete. Under state law, the applicant has 180 days to supply the missing information or tell the city it will not, according to the city's page, which still listed the incomplete status as of its last update.
The project also faces a local pause. Salem city councilors approved a 120-day moratorium on new data center development on Sept. 21. It runs until Jan. 19, 2027, unless the council extends it for roughly six more months, KATU reported. City Attorney Dan Atchison told councilors the city must keep processing the Verrus application, which was filed before the moratorium, but construction cannot happen while the moratorium is in effect, according to the Salem Reporter. A city Data Center Task Force is expected to bring recommendations to the council in December.
Salem's concerns have focused in part on water. City findings supporting the moratorium cited the risk to Salem's drinking water from the planned deep drawdown of Detroit Lake, the Salem Business Journal reported. Willamette News covered that drawdown fight earlier this month. The city's project page says early conversations suggest the Verrus facility would be designed to use little water.
Reaction
Amazon, which runs more than a dozen hyperscale data centers in Morrow and Umatilla counties, criticized the order. "This directive was issued abruptly, without meaningful stakeholder engagement of the workers, businesses, and municipalities it will affect," Shannon Kellogg, vice president of Amazon Web Services Public Policy for the Americas, said in a statement reported by OPB. The Capital Chronicle reported Kellogg also said the pause would "halt billions of dollars in planned investment."
Supporters of a longer moratorium welcomed the pause but said it is only a start. "What needs to happen at the Legislature, we need new laws to protect all of Oregon from these massive corporations," Kaleb Lay, Oregon Rural Action's director of policy and research, told OPB. Food & Water Watch called the move a "massive victory," Data Center Dynamics reported, while continuing to push for a three-year statewide moratorium.
The order also lands in the middle of the governor's race. Kotek's Republican challenger, state Sen. Christine Drazan, told KGW in September that Kotek "should issue a moratorium immediately." The Oregonian reported that Drazan's office had no immediate response to the permit order on Tuesday, when she was preparing for the candidates' final debate, and that Kotek's office declined to elaborate on the order. Kotek had previously said she lacked the authority to impose a statewide moratorium without the Legislature.
What comes next
Kotek's Data Center Advisory Committee is taking public comment on its preliminary report until 5 p.m. Oct. 24, the Capital Chronicle reported, and Kotek is expected to propose data center policy when the Legislature convenes in January. In Salem, the next milestones are the task force's December recommendations and a council decision on whether to extend the local moratorium past Jan. 19.
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