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Oregon Gov. Tina Kotek on Thursday directed the Department of Administrative Services to terminate the state’s contract for the sale of about 32 acres at the Mill Creek Corporate Center campus in southeast Salem for a proposed data center, putting the controversial project’s future in jeopardy.

The land accounts for half of the 75-acre plot where tech company Verrus hopes to build the $5.1 billion Oakline at Mill Creek project.

Kotek’s announcement comes days after hundreds of people turned up on July 27 to rally against the proposed data center.

Salem City Council is slated to hold a special meeting on Aug. 3 to consider initiating a moratorium on AI data centers and amending zoning codes to regulate such developments.

Salem City Manager Krishna Namburi stressed previously that the project is 鈥渘ot a done deal鈥� and city leaders want residents to voice their concerns and be included in the public process.

Kotek said she made the decision regarding the sale upon learning of the proposed development. Her office said it reflects 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.

鈥淭his decision is about my responsibility to make sure state actions reflect Oregon’s values and serve the public interest,鈥� Kotek said. 鈥淚 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.鈥�

Her office said the governor supports economic development that creates family-wage jobs, strengthens regional economies, and helps Oregon compete for future investment while balancing impacts on housing, energy, water, transportation, and quality of life.

The state will continue working with local governments, businesses and communities to advance these economic development opportunities, Kotek said.

Kotek, in January, formed a Statewide Data Center Advisory Committee to develop policy recommendations. Committee members are scheduled to meet July 31 and on Aug. 4 will discuss and deliberate a draft report.

Editor’s note: This article first appeared in The Statesman Journal and then was distributed on the USA TODAY Network via Reuters Connect.