One of Oregon's biggest data center hubs is pushing back hard against the state. The Umatilla City Council voted Tuesday to declare a state of emergency over what it calls "the threat of widespread financial loss" from Gov. Tina Kotek's order pausing new data center permits, the Oregon Capital Chronicle reported. Five of the six council members present voted yes.
The governor's order
Kotek's order temporarily stops the Oregon Department of Environmental Quality from issuing new air and water pollution permits to proposed or expanding data center projects until July 2027, according to the Capital Chronicle. A DEQ spokesperson said the agency has paused all permitting work for data centers until then.
The spokesperson said Kotek issued the directive to give herself time to evaluate recommendations from a Data Center Advisory Committee she created earlier this year. Kotek is expected to propose data center regulatory reforms during the 2027 legislative session, which begins in late January.
A Kotek spokesperson said the governor "supports a pause so that Oregon's policies continue to protect the public health and natural resources impacted by rapid development."
What Umatilla is asking for
The emergency declaration formally asks Kotek to withdraw or modify the directive and let DEQ keep processing permits. It also requests a full economic impact assessment of the order and authorizes City Manager Dave Stockdale to work with other local governments on possible legal action against the state, the Capital Chronicle reported.
Stockdale, who drafted the resolution, wrote that city officials have "significant concerns regarding the legality of this action," including whether the pause exceeds DEQ's authority, violates Oregon's Administrative Procedures Act or infringes on cities' home rule powers.
He said another option would be to bypass the state and work directly with the U.S. Environmental Protection Agency, since DEQ administers federal pollution permits on its behalf, but called that "highly unusual."
The money at stake
Stockdale called the potential economic consequences "extraordinary." He said the pause could cost the region more than $5 billion in private industrial development, cost the city $6 million in direct financial losses and cost up to $12 million in planned water infrastructure investments and contributions that data center companies owe under community benefit agreements, according to the Capital Chronicle.
Umatilla has four data centers operating, one under construction and two more expected from Amazon and Sabey Data Centers, with tax incentive agreements already signed, according to the city's resolution. Umatilla County has 22 of Oregon's more than 100 data centers, according to an ECOnorthwest analysis cited by the Capital Chronicle.
Mayor Caden Sipe asked whether other counties were considering similar declarations, whether the city was at risk of bankruptcy and whether there was legal precedent for applying an emergency declaration to the governor's order. The answer to all three was no.
Why it matters for contractors
Eastern Oregon's data center boom has been a major source of construction work for a decade, and Kotek's pause puts the next wave on hold until at least July 2027. The two projects Umatilla expects, from Amazon and Sabey, would normally mean large, multi-year jobs for site, concrete, steel, electrical and mechanical contractors, plus the water infrastructure work tied to community benefit agreements.
The data center already under construction in Umatilla is the big open question. The Capital Chronicle's report doesn't say how the pause affects projects already being built, so contractors on active jobs should confirm their permit status with owners.
For everyone else, the timeline is the key. DEQ won't process new data center permits until July 2027, and the Legislature will likely debate new rules starting in late January. Contractors who depend on this market should plan for a slower 2027, watch the legislative session closely and keep an eye on whether Umatilla and other local governments take legal action that could change the timeline.