WHAT IS THE VERRUS PROJECT?

Verrus through its partner Alderstone has submitted a land use application to construct a 650,000+ square foot AI computing data center in the Mill Creek Corporate Center in SE Salem. Verrus is related to Google. Called Oakline at Mill Creek, this project will take several years to build out in two phases, which in total include three buildings, an array of battery storage, 88 secondary backup generators, and a separate PGE electrical substation. The project encompasses 100 acres on 3 parcels, one of which will be split to create a 4^th parcel for the substation. The developer states that this data center campus will be constructed with new lower impact technology that will consume less water and help the energy grid on peak days by accessing stored power from its back up battery system. They are touting the benefits of a closed loop cooling system as lower water use. See the Project Tab for more information.

WHY IS THIS PROJECT BEING BUILT HERE?

The Mill Creek Corporate Center was established in 2005 as a light industrial, manufacturing center intended to support job creation and the regional economy. In 2014, the Employment Center zoning for the Mill Creek area was amended to include data centers as an allowable use by right. Land uses permitted by right only require staff level review for any proposed projects, regardless of magnitude or impact. As a result, the only controls on projects are what are specifically listed in the City’s development code, making Salem a relatively easier place to develop from a developer's perspective than a City with stricter controls and higher level reviews. There are also a number of financial incentives to support companies that locate in the Mill Creek Corporate Center. See the Project Area Sub Tab for additional information.

WHAT ARE THE BENEFITS OF THE DATA CENTER?

Well, depending on who you talk with, the construction will employ a significant number of tradespeople (potentially up to a thousand) over several years (so the trade unions support these projects for their jobs). The final project at build out will employ about 75 professionals (on approximately 75 acres…). The projected valuation of the project is $5.1 billion (compared to the City’s 2026 assessed valuation of $16.1 billion), which means when the approved property tax exemption expires in 3 years, the campus may generate approximately $9 million in annual property tax revenue to the City, which significantly improves the City’s structural budget deficit. The data center would also be assessed franchise fees based on its consumption ~ that amount has not been estimated as of yet.

WHY ARE PEOPLE CONCERNED ABOUT THE PROJECT?

Many people are concerned by the proliferation of data centers across this country and the negative impacts these facilities have had on the surrounding communities and the natural environment. While this data center may be “a new generation” type with more environmentally friendly operating systems, according to the developer, it is a hyperscale facility that will still consume tremendous energy and water resources. And the developer has never actually built one of these facilities. People are also concerned about continuous low frequency noise and air emissions from secondary backup diesel generators. Some people fear a “bust” with so many data centers being constructed, and that the center will have a short life span, leaving Salem with a derelict facility. And some people disagree with the over use of AI being imbedded in everyday business and government contracted surveillance systems. Some say that the job generation isn’t enough to meet the intended purpose of the Mill Creek Corporate Center, and the property tax abatement means that the City will not see that property tax revenue benefit until the exemption expires.

WHEN DOES THE PROPERTY TAX EXEMPTION EXPIRE?

According to the application to Marion County, Alderstone received approval for a three-year property tax exemption beginning in 2027. Effective June 5, 2026, per HB 4084, Oregon enacted a moratorium on property tax exemptions for new data center applications and a moratorium on any extension requests for previously approved exemptions in urban and suburban areas, which includes Salem. The moratorium will expire 90 days after the end of the 2027 legislative session. Unless the law changes, Alderstone / Verrus could apply for an extension after 2027. Previously, extensions were granted for up to 15 years. This is definitely a legislative area to monitor.

HOW MUCH WATER WILL THIS DATA CENTER CONSUME?

That is a key question. According to the developer, the center will utilize a closed loop cooling system that once filled, recirculates water for cooling, using less water than typical data centers, "equivalent to an average golf course in the US" (US average, not Willamette Valley average…). The system will need supplemental water during hot days, up to 3 million gallons per day (gpd); hot being defined as first over 85 degrees, and then “high 80s / low 90s” on its supplemental water information. On August 11, 2026, the developer submitted updated water consumption information at staff’s request, which is available through the City’s land use portal. In that supplement, the developer’s engineer stated there are approximately 20-25 hot days per year requiring supplemental cooling water to mist the equipment. In previously available information, they shared that they used a 50-year average. We used a look back period of 4 years as we believe that climate change has made the valley hotter. On average over the last 4 years, Salem has had an average of 53 days per year at 85 degrees or hotter.

The developer’s engineers estimate that the data center campus at build out will use about 34.4 million gallons total in a maximum (really hot) year or 19.4 million gallons per year in an average year (less hot?). We believe they have underestimated their projected usage because of the lower number of hot days in their basis (20-25 v 50+ days per year at 85 degrees or hotter). And the question remains; can the City’s water supply accommodate that kind of water consumption and daily draw down and still maintain adequate water pressure in its lines? The engineer’s supplement indicates they will add additional water storage on site per the City’s direction to accommodate higher draw down than the system can handle on hot days. The developer should be responsible for evaluating its draw down needs vis a vis the City's water distribution system, not the City. This is definitely an area to monitor.