Topics of Interest: Verrus' Mill Creek Data Center Project

Verrus, a new-wave data center developer, is exploring development of a potential data center operation to be located in the Mill Creek Corporate Center. With new development comes questions from community members about possible benefits and implications. To assist in providing transparent information, we have answered gathered questions.

Statement from Salem's City Manager

"Verrus' proposal represents a potential opportunity for Salem. The City of Salem is committed to carefully evaluating the proposal and taking necessary steps to ensure it aligns with our community's long-term interests," said Krishna Namburi, Salem's City Manager. "As part of our normal processes, we will continue to evaluate the proposal's economic benefits, infrastructure needs, environmental impacts, and overall community considerations. We are encouraged by Verrus' interest in protecting the environment at the proposed site, creating high paying jobs for our future, and contributing to a more diverse local economy. We will keep the community informed as the process moves forward."

Questions and Answers Concerning the Verrus Project

• Why are we hearing about this company's interest in Salem now?

It can take time - sometimes years - from a company's initial inquiry to site a facility in a community to proceeding through the development process. Responses to initial inquiries allow companies to evaluate available land for their proposed need, whether the employment base is sufficient, and whether road, water, sewer, and electrical capacity are sufficient to support the development.

If the company considers Salem a viable site for a potential investment, they would likely move into a formal development pre-application process. As a formal proposal moves forward, we will continue evaluating the fit of the company to our community. The proposal would be reviewed through the City's planning, development, building, utility, and regulatory processes which includes protections for heritage oak trees. In the formal stage, the status of a development application is accessible on the City's website.

• How many jobs are expected, if this proposal moves forward?

The company anticipates bringing 75 permanent new high-paying jobs to Salem.

• Are there any financial impacts to the City of this type of a proposal?

The company's investment in our community is projected to be more than $5 billion. The City's current tax base is approximately $16.7 billion. The company's investment would be taxable, and after the first three years, those tax revenues would flow to the City's General Fund to help pay for City services like Police, Fire, and other services - as well as the Community Services Levy. A portion of the electric bill paid by the company would generate funds for General Fund services through the City's Franchise Fee, which assesses 5% to all utilities using the City's right-of-way. This fee is assessed on telephone, electricity, natural gas, cable providers, and City of Salem utilities (water, wastewater, and stormwater).

• Are data centers allowed in Salem?

Data centers are an allowed use in land zoned for Employment Centers in Salem, like the Mill Creek Corporate Center. See a land use map for Salem and the Salem Revised Code reference for allowable uses in Employment Centers. The Mill Creek Corporate Center was designed to host larger industrial companies.

• If this moves forward, will there be more data centers in Salem?

If this proposal moves forward, this would be the first data center in Salem. The potential for additional data centers is limited. There are very few sites in Salem that have the necessary acreage and zoning to support data center development.

• Are all data centers the same?

Data centers vary significantly in size, design, and operations. They can differ in energy demand, water use, cooling technology, employment levels, and environmental impacts. Questions regarding electricity demand and potential impacts to other utility systems are important. Initial conversations suggest the proposed facility would be designed as a low-water-consumption data center.

• How can the City protect our community through the development process, if this moves forward?

Through the formal pre-application process and more community conversations, the City can make sure the development projected for the site occurs in a way that fits with our community and directly benefits our community. The City and the company plan to enter into a community benefits agreement, or a legally binding, enforceable tool that allows communities to secure commitments from data center developers for things of community interest. In other communities, community benefit agreements may speak directly to workforce development, employment, site improvements, residents' digital access, well-being, and more.

• Will my utility rates increase if this company chooses Salem?

There are new tariffs specific to data centers so, adding this use won't directly impact community electricity rates. The Oregon Public Utility Commission recently approved PGE request to establish a separate rate structure for large data centers. Under that decision, data center customers will see an average 29 percent increase in rates, while residential customers are expected to see an average 1.3 percent decrease. Verrus also participated in the rate structure discussions and supported the changes.

• What type of customers will the data center host?

The company operates as a developer and landlord, and leases space within the data center to end users. This is a common model around the country, and end users can range from one primary tenant to dozens of tenants.

This article will be updated as more information becomes available.