SALEM, Ore. — Salem City Council postponed a potentially decisive vote Monday, Nov. 9, on a proposed interpretation of city zoning rules that could prevent the Oakline at Mill Creek artificial intelligence data center from moving forward.
After more than two hours of public testimony, councilors voted 7-0 to close the public hearing, keep the written record open and continue deliberations at a special meeting Thursday, Nov. 12, at 6 p.m.
The delay leaves one of Salem's most consequential development disputes unresolved. The question is no longer simply whether the city should impose new restrictions on data centers, but whether its existing regulations ever permitted facilities of this scale.
City Attorney Dan Atchison presented Resolution No. 2026-46, which would interpret the term "data center facilities" in Salem Revised Code Section 400.110(e) as excluding AI and hyperscale data centers and other facilities primarily dedicated to large-scale, continuous computational processing.
Atchison argued that when Salem adopted the relevant language in 2013 and 2014, the code was intended to accommodate conventional facilities focused on data storage, hosting and telecommunications. Modern AI computing campuses, he said, operate differently.
Under the proposed interpretation, those larger facilities would not qualify as permitted data centers under the existing classification. Although the resolution would not directly decide an individual development application, subsequent city decisions would be required to follow the council's interpretation.
That distinction carries immediate consequences for Verrus, the developer behind Oakline at Mill Creek.
The company's subsidiary, Alderstone LLC, has submitted plans for a data center campus at 4720 Mill Creek Drive SE. The city's land-use portal describes two single-story buildings totaling approximately 600,000 square feet, along with associated infrastructure and a proposed electrical substation.
The project has previously been described by the city as a potential investment exceeding $5 billion, with approximately 75 permanent jobs anticipated by the developer. Those figures remain projections, not completed investments or guaranteed employment.
Business leaders question changing the rules
The proposal drew strong opposition from several business organizations, development representatives and construction workers who argued that changing how existing regulations are interpreted could undermine confidence in Salem's permitting system.
Tom Hoffert, CEO of the Salem Chamber, spoke on behalf of a coalition that included the Oregon Business Council, Oregon Business & Industry, the Oregon Bankers Association, the Home Builders Association of Marion and Polk Counties and regional chambers of commerce.
Hoffert emphasized that the coalition was not endorsing or opposing approval of a particular data center application. Its concern was whether developers could rely on established regulations when purchasing property and committing capital.
Wendy Kellington, an attorney representing Verrus and Alderstone, challenged the city's legal approach.
"You cannot amend codes by interpretation," Kellington told councilors.
She argued that city planning officials had previously identified data centers as a permitted use and that adopting a narrower interpretation after the developer submitted its application would effectively change the rules during the process.
Construction workers raised concerns about the economic consequences.
Molly Muller, a journeyman electrician and member of IBEW Local 280, described the difficulty of finding steady work near Salem and the personal cost of traveling away from her family for employment.
"Having the opportunity to work on a major project right here in Salem would be life changing for us