The governor of Oregon has intervened to block a data center development outside Portland, Oregon.

Governor Tina Kotek this week announced she had directed the state Department of Administrative Services to terminate the state's contract to sell land in Salem to data center firm Verrus.

The state was set to sell approximately 32 acres at the Mill Creek Corporate Center in southeast Salem for a proposed data center project. The deal was first signed last year, and due to close in October.

Verrus, a data center developer backed by Alphabet spin-out Sidewalk Infrastructure Partners, was planning a three-building campus on the site in Marion County, some 45 miles south of Portland. Full details of the project hadn’t been shared, but the first phase was set to offer “dozens” of megawatts on a 75-acre site.

Governor Kotek said the direction reflected her “commitment to ensuring state assets are managed in a manner that advances Oregon's long-term interests, supports local communities, and aligns with the state's priorities around affordability, responsible economic development, and stewardship of public resources.”

"This decision is about my responsibility to make sure state actions reflect Oregon's values and serve the public interest," Governor Kotek said. "I believe in growing Oregon's economy and welcoming new investment, including in the technology sector. But growth has to make sense for the community, for our infrastructure, and for our natural resources. Oregonians have made it clear they expect thoughtful, responsible decisions about projects of this scale, and I agree."

Verrus had said the campus would use a closed-loop cooling system to reduce water use and lithium iron phosphate battery storage for primary backup power to reduce emissions. The campus would dynamically reduce energy when the grid is most stressed via close coordination with utility partners such as Portland General Electric through the startup’s Stabiligrid technology.

In statements to local press, Verrus said it was “greatly disappointed” in the decision.

“While we understand the community’s concerns around data centers, each project should be judged on its merit,” the company said. “This decision was made unilaterally and without consultation - before Verrus had the opportunity to present its design, infrastructure plan and community benefit proposals to address these concerns and demonstrate our shared commitment to Oregon’s values.”

Sidewalk Infrastructure Partners was formed out of Sidewalk Labs in 2019 as an independent entity out of Alphabet; it is also funded by the Ontario Teachers’ Pension Plan (OTPP) and private infrastructure fund StepStone Group.

Sidewalk Infrastructure Partners launched Verrus in 2024. The company aims to develop grid-reactive data centers that can flex their energy use depending on the needs of the grid. The company is known to also be targeting an 180-acre project outside Detroit in Lyon Township, Michigan, known as Project Flex.