Nestle Waters' plan to bottle water from a spring near Cascade Locks appears to be dead, after Gov. Kate Brown directed state officials to stop an exchange of water rights that was crucial to the deal.

In a letter to the Oregon Department of Fish and Wildlife on Friday, the governor asked the department's director to stop the exchange for fiscal rather than environmental reasons. The agency will comply with the governor's request, spokeswoman Michelle Dennehy said on Monday.

Brown did not say how much it cost state agencies, including the Oregon Water Resources Department, to work on the water rights exchange. But she said it would require "significant staff resources and legal costs" going forward.

"This is of particular concern given the uncertainty around the city's plans for a Nestle plant," Brown wrote, referring to a local ban on such plants. Voters in Hood River County passed a measure in May 2016 to ban large water bottling operations.

The Oregon Department of Fish and Wildlife holds water rights to Oxbow Springs, which it uses to supply a salmon hatchery. Two months after Brown took office in 2015, the state agreed to a deal to transfer those rights to Nestle Waters in exchange for the city of Cascade Locks' well water rights.

The governor's decision on Friday leaves Cascade Locks with the option to use city water for the Nestle bottling plant.

Nestle has been trying to nearly a decade to gain approval to bottle water from Oxbow Springs, on a hillside just outside Cascade Locks. The company would build a bottling plant at Cascade Locks' port and bottle 100 million gallons of the water annually under the Arrowhead brand, The Oregonian/OregonLive has reported.

On Monday, the national group that opposed the plant, Food & Water Watch, claimed victory. "Gov. Brown's decision to back out of this wrongheaded deal is a hard-won victory for the communities in Hood River County that have waged a nine-year battle to keep Nestlé from seizing their water," the group's executive director Wenonah Hauter said in a press release.

The plant would have brought jobs and additional tax revenue to Cascade Locks, and Brown acknowledged in her letter that the city needs an economic boost. Brown wrote that she directed staff in her office and at the state's economic development agency to work with the city "to redouble efforts to address key economic development needs, more important than ever in the wake of the devastating Eagle Creek fire."

In a statement on Monday, Nestle Waters said the company learned from Cascade Locks officials that the water rights exchange "will not be going forward. We are grateful to the residents, elected officials, neighborhood business owners and leaders who welcomed us to Cascade Locks, and who have supported our interest in bringing good paying jobs to the community."

-- Hillary Borrud

503-294-4034; @hborrud