Salem Weighs $5 Billion Data Center Proposal as Power and Water Demands Raise Concerns

SALEM, Ore. — The City of Salem has officially acknowledged a proposal from Verrus, a developer specializing in data center infrastructure, to potentially establish a facility at the Mill Creek Corporate Center.

Proposed Data Salem Center: Economic and Development

The proposal includes three data center buildings with a utility substation designed to support cloud computing, artificial intelligence, and enterprise services.

While the project is still in its early stages, the city has released preliminary details to address community interest and questions regarding the scale of the investment.

Data centers are currently an allowable use within the Mill Creek Corporate Center, which was originally designed to host large-scale industrial operations. Verrus proposes a capital investment of more than $5 billion for the data center.

This is a significant amount for a city with a current tax base of approximately $16.7 billion.

City officials confirmed that the facility would be subject to taxation, with revenues directed toward the General Fund after the first three years to support municipal services, including police, fire, and community levies.

Additionally, the city expects the facility to generate revenue through existing franchise fees applied to utility usage, and Verrus also anticipates the creation of 75 permanent, high-paying jobs.

Salem Data Center Community Concerns

But Verrus has not yet released estimates for the project’s water or electricity use, indicating that these numbers will be available as the design is finalized. And the city has been holding meetings, including one on preserving heritage oak trees on the property held before the project was announced.

City officials noted that the Verrus facility would be Salem’s first data center, and further development is limited by a scarcity of sites with the necessary zoning and acreage.

While the city emphasized that it is moving through a standard evaluation process to determine if the site is a viable fit, including reviews of environmental impacts, infrastructure requirements, and community benefits, concerns have been raised.

The city and Verrus intend to establish a legally binding community benefits agreement to secure commitments regarding workforce development, site improvements, and resident well-being. On concerns over utility costs, the city noted that the Oregon Public Utility Commission has authorized a separate rate structure for large data centers.

Under new OPUC tariffs, data center operators can expect higher rates, while residential customers may see a slight decrease. Verrus has expressed support for this rate structure. The proposal remains subject to ongoing regulatory and planning reviews, with the city promising transparency as the process moves forward.