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 “not a done deal” 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.

“This decision is about my responsibility to make sure state actions reflect Oregon’s values and serve the public interest,” 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.”

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.

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The deal to create a $150 million mixed-use hub at the former home of Truitt Bros. Cannery fell through, but the developer helming the project said his company hopes to revisit the contract if Salem can prove its worth as an investment.

Aaron Stickney, co-founder and managing member of SilverSphere Capital, previously told the Statesman Journal that the purchase was under contract and expected to close this summer, with demolition following shortly thereafter.

Stickney and SilverSphere stepped in after the plan to transform the former cannery north of downtown stalled under previous leadership. The deal fizzled because the seller wasn’t willing to extend the contract, Stickney said.

Almost 800 apartments, a grocery store, an automatic parking garage, a wine bar, and restaurants were planned for the site.

Jordan Truitt, who acted as the property’s listing broker along with Josh Kay of First Commercial Real Estate, confirmed that the purchase and sale agreement had expired.

“The buyer and seller have been unable to reach reasonable terms for any further extensions of the agreement,” he said. “The Truitt family has been a thoughtful and patient steward of this property for generations and remains fully committed to the redevelopment of the cannery site.”

Stickney said he was hopeful they could return to the table and close the deal, but he expressed serious concerns about investing in Salem.

“Several things are stalling any progress in Salem: the growing homeless situation that no one seems willing to address, ongoing City Council infighting, and no real support at the city level for changing anything,” he said.

Stickney recently crafted a white paper �پ��ٱ������“Economic Development & Growth Plan” for Salem City Council and City Manager Krishna Namburi. The proposal calls for introduction of a “Prosper Portland”-style model to spur economic development in the city that could generate $13 million to $34 million in revenue over the next five years.

The proposal also could bring in more than $100 million in private investment and up to 2,600 new jobs without new taxes or bonds, he added.

Stickney told the Statesman Journal in June that a private-public partnership between city leadership and businesses like his could turn Salem around.

“We’re at the point economically that Salem could be the next emerging market,” he said at the time.

He said city leaders showed little interest in his proposals, and he’s yet to see action on any of them.

“I’m surprised that Mr. Stickney is saying that a lack of public-private partnership is his reason for not moving forward with the project,” Community Planning and Development Department Director Kristin Retherford said. “We have had two very productive meetings with Mr. Stickney since he stepped into the lead development role this spring.”

The cannery is a very complex site, Retherford said, with river and creek frontage, potential historic and archaeological impacts, and a rail line running down Front Street. Salem is moving forward with creation of an urban renewal area to pay for infrastructure needed to support the project, and the city has obtained a federal grant to design the long-term improvements to Front Street for redevelopment in the area.

“We have been very excited about Mr. Stickney’s ideas and development experience and the opportunity to collaborate with him on the project,” Retherford said.

When talking to residents and business owners, Stickney said he hears that people want change. They want to clean up encampments, fill vacant storefronts and attract commerce. He said he doesn’t see that same desire to change among city leaders.

“If nothing changes, we may just take out money and go to Portland,” he said. “It’s been really disappointing. We had high hopes for Salem.”

Portions of the cannery were first constructed in 1914 and owned by various food processors until the Truitt Bros. Cannery began operating there in 1973. The business started by brothers Peter and David Truitt canned local pears, green beans and cherries. In peak season, the cannery would employ 800 people.

When the property went up for sale with a $13 million price tag in 2021, Peter Truitt said he had high hopes for the site. He wanted a seller who would honor its history while investing in the community and revitalizing the area north of downtown, he said.

“The lasting legacy of the Truitt family is to leave the property better than when they found it,” he said.

The city, neighbors and the Grant Neighborhood Association have been very supportive during the process, Jordan Truitt said.

“The site carries approved land use entitlements, strong interest from the development community and the continued support of city leadership and the community at large,” he said.

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

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By Whitney Woodworth
Salem Statesman Journal

Marion County, along with a collection of Santiam Canyon cities and agencies, submitted a formal letter June 22 to the U.S. Army Corps of Engineers urging it to cancel any deep drawdown of Detroit Reservoir in 2026 and reevaluate future draining plans.

The letter, which cites serious risks to downstream drinking water systems, local recreation and fish populations, was submitted on behalf of a community coalition that includes Stayton, Sublimity, Mill City, Detroit Lake Foundation, Detroit Lake Marina, Woodburn Area Chamber of Commerce and North Marion Tourism Collaborative.

The city of Salem also sent a letter in early 2026 urging the U.S. Army Corps of Engineers to take more steps to protect the city’s drinking water. It was not one of the cities that signed the June 22 letter.

“Our residents depend on clean, reliable drinking water,” Marion County Commissioner Kevin Cameron said. “The Army Corps should complete the analysis required by law before taking on any risks that could harm that supply.”

Commissioner Colm Willis said the Corps’ own analysis acknowledges the drawdown’s adverse risk to drinking water and recreation.

“The risks to our communities strongly outweigh any perceived, hypothetical benefits from this drawdown,” Willis said.

The drawdown is meant to save endangered salmon, but that could impact water quality for 210,000 and harm the economy of the Santiam Canyon. It has been the source of disagreement between the county and federal agency since news of it was first reported by the Statesman Journal in January 2025.

The move spurred alarm bells in Salem and Marion County over concern the drawdown would flush muddy water into the drinking water facilities for Stayton and Salem.

Salem City Council voted to declare a state of emergency in July 2025. The declaration allowed the city to take immediate action to prepare for the impacts of the drawdown, including constructing new groundwater wells at the Geren Island Water Treatment Plant and adding a new pump station connection with Keizer.

The letter comes after Marion County filed a lawsuit in May against the Corps asking a federal court to pause efforts to drain the lake until the Corps completes a federally required turbidity request.

Marion County also sent letters in December 2025 and in January 2026 asking for a halt to the drawdown. The county also requested a more formal review, pointing to the 2023 Green Peter Reservoir drawdown, “which caused significant damage to downstream water filtration systems and killed hundreds of thousands of kokanee salmon.”

County leaders said despite these warnings, the Corps published its Final Supplemental Environmental Impact Statement in May without completing the required turbidity study.

The joint letter sent on June 22 asks the Corps to refrain from authorizing any deep drawdown in 2026 and to satisfy five conditions before revisiting a draining plan: completing the turbidity report; establishing enforceable triggers for termination if the drawdown impacts water quality, recreation and fisheries; demonstrating that prior drawdowns produced improvements in fish passage; consult directly with downstream water providers and governments for coordination and emergency response; and identify and commit in advance to funding for impacts to water systems and local businesses.

“Any changes to Detroit Lake’s water level must be grounded in data-backed science with meaningful protections in place for our downstream communities,” Commissioner Danielle Bethell said. “We will continue working to ensure that decisions made at the federal level align with the needs of local communities.”

Statesman Journal reporter Zach Urness also contributed to this report.

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