Quincy Plans Recycled Water for Microsoft

The city of Quincy, Washington is spending millions of dollars to build a system to supply recycled water for huge data centers operated by Microsoft Corp., Yahoo, Intuit and Sabey Corp. The system will allow Quincy to shift the data centers’ water requirements to a separate “gray water” system rather than depleting the city’s potable water supply.  

The water recycling program is similar to one implemented in San Antonio, which Microsoft cited as a key factor in its choice of the city for a $500 million data center. It reflects a trend in which municipalities and data center operators are working to minimize the impact of these facilities on local water systems.

The Quincy project, which will treat up to 5 million gallons of water a day, will cost $9 million. The first phase is being built with a $4.5 million grant from the state, according to the Wenatchee World, which said the city has appealed to federal lawmakers for the rest of the money.

Sabey Confirms Huge Quincy Data Center

It’s official: Sabey Corporation will build a 525,000-square-foot data center campus in Quincy, Wash., the company said today. Sabey will break ground this summer on Intergate.Quincy, which will feature three data center facilities on 40 acres.

Sabey Corp. decided to build the campus in Quincy after its leasing success at its Intergate.Columbia in nearby East Wenatchee, where T-Mobile and VMware signed on as tenants within a year of groundbreaking. Sabey, a Seattle-based developer, began evaluating prospects for a data center in Quincy in 2007, and has listed the project on its web site for several months.

The new development continues the data center building boom in central Washington, where Microsoft, Yahoo, Ask.com and Intuit, have opened large data centers, drawn by the area’s low power rates and clean hydro-electric power from nearby dams on the Columbia River. Sabey notes that while the other projects are company-built and operated, Intergate.Sabey is “wholesale” data center space designed for companies who prefer to lease rather than own.

T-Mobile Moves In, Sabey Eyes Quincy

T-Mobile officially opened its new $250 million data center in East Wenatchee, Washington last week, as local officials touted the impact of local data centers on the township’s tax base. The facility is the first of two major data centers being built at Sabey Corp.’s Intergate.Columbia development, where VMware has also leased more than 100,000 square feet of data center space.

The new data centers are already boosting tax revenues. At last week’s ceremony to mark the opening og the T-Mobile project, Douglas County Commissioner Ike Stanton said the county’s sales tax revenue jumped 280 percent in a single year, increasing from $220,000 in February 2008 to $838,000 in February 2009. “We refer to this in Douglas County as our own, federal stimulus package, because it’s been very good for Douglas County,” Stanton said, according to the Wenatchee World.

Yahoo Mulls Wenatchee Expansion

In its bid to convince Washington state legislators to reinstate a tax break for data center operators, Yahoo is using a carrot as well as a stick. A Yahoo executive said Thursday that the company would consider building a second major data center complex in Wenatchee, Wash. if the state restores the sales tax incentive.

Kevin Timmons, vice president of operations for Yahoo, told the Wenatchee World that the company has scouted land in Wenatchee for a data center “similar in size” to the company’s 140,000 square foot data center in Quincy. If the tax break materializes, Timmons said, Yahoo will continue with its plans to add a second phase of the Quincy data center as well as construct a new data center in Wenatchee. However, those plans are conditional. “Without a tax exemption it makes no sense,” Timmons said.

Legislation in Washington state that would have restored a tax break for data centers won’t be passed in 2008. The tax package was drafted after the state ruled that data centers were no longer covered by a state sales tax break for manufacturing enterprises, and thus must pay a 7.9 percent tax on data center construction and equipment.

Data Centers Boost Tax Revenue in Quincy

New data centers from Microsoft, Yahoo and several other high-tech firms are providing a significant boost to the economy of Quincy, Washington, local officials said this week. Quincy city administrator Tim Snead told the Wenatchee World that the building phase of the new data centers server farms had a huge impact on the city’s sales taxes. After receiving $700,000 in sales taxes in 2005, Quincy’s tax revenue grew to $1.5 million in 2006 and nearly tripled to $4.3 million last year.

Sales tax revenue is expected to recede as a number of data center projects are completed, reducing the volume of construction workers at local sites. Quincy is a small farm town that had 5,300 residents when it was selected for the Microsoft project in 2006. Yahoo, Ask.com, Intuit, Sabey Corp. and Base Partners have since announced projects in central Washington.

Quincy Update: Some Growth, No Starbucks Yet

Can data center clusters transform a rural town into a vibrant tech center? The Los Angeles Times provides an update on life in Quincy, the small farm town in Washington state that has become a case study for the economic development potential of data center projects. An excerpt:

For a town like Quincy, built on potatoes and apples, the arrival of high tech has proved an inspirational and a cautionary tale. With its two stoplights, four banks and almost 6,000 residents - two-thirds of them Latino, many of whom work the fields, orchards, vineyards and packing plants - Quincy seemed an unlikely destination for the likes of Intuit, or Microsoft and Yahoo, which also have built data centers in town. The median income ($35,000) and the median price of a home ($108,000) are far below the state medians. Unemployment is relatively high and education levels relatively low - typical of the divide between Washingtonians east of the Cascade Mountains and those west of them. Still, Quincy has done better than many small towns. Some believe the high-tech utilities - which town officials courted - will further transform it.

The verdict thus far: business is booming for the hardware store, and a new shopping center is coming. But there’s no sign of Starbucks yet. “It’s like we’re still waiting for something,” said Aleeta Merred, executive director of the Quincy Valley Chamber of Commerce. “So far, we’re not really seeing the growth we expected.”

Washington State ‘Server Farm’ Tax Break Fails

Legislation in Washington state that would have restored a tax break for data centers won’t be passed in 2008, leaving Microsoft (MSFT) and Yahoo (YHOO) to mull the future of their plans to continue building in the state. Last month Microsoft and Yahoo halted construction on their multi-facility data center campuses in Quincy, Washington while state legislators debated the tax bill.

The tax package was drafted after the state ruled that data centers were no longer covered by a state sales tax break for manufacturing enterprises, and thus must pay a 7.9 percent tax on data center construction and equipment. Gov. Chris Gregoire requested an exemption in Senate Bill 6666, which would restore the exemption for data centers. The bill was caught up in tax politics, with media terming it a $1 billion tax break for high-tech giants.

“To be honest, we just didn’t have time.” Rep. Mike Armstrong, R-Wenatchee told local media. “We’ll see what we can do for the next session,” which begins in January 2009.

Ask.com and the Quincy Power Advantage

In our recent discussion of the uncertain future of Washington state’s tax incentives for data centers, we wondered whether the tax breaks were big enough to bust the economic model that has drawn so many companies to build data centers in central Washington. The primary lure of Quincy and nearby towns is cheap hydro power from the Columbia River, which offers a significant savings compared to many traditional data center hubs.

Greg Fennewald, senior director of data center strategy for Ask.com, discussed the economics of power at last week’s meeting of the Grant County Economic Development Council. Fennewald spoke about why his company decided to locate in Moses Lake, Washington, where it opened a new data center in December. The savings on electricity, he said, are “quite significant.”