Yahoo Rethinking Expansion in Quincy

Yahoo is rethinking additional expansion in Quincy, the new data center hub in central Washington. On Dec, 3 Yahoo held a grand opening for its new 140,000 square foot facility in Quincy, which has attracted multiple data center projects with its abundant supply of cheap power from dams on the Columbia River. As the company showed off its new facility, Yahoo executives warned that its plans for additional expansion at the site are unclear after Washington State attorney general Rob McKenna ruled that data centers were not covered by a state tax break.

McKenna ruled that data centers don’t qualify as manufacturing enterprises, and thus must pay a 7.9 percent tax on data center construction and equipment. McKenna found that data centers “do not produce a product which is sold to the companies’ customers or used by the Internet companies as consumers or in manufacturing articles, substances or commodities,” the attorney general said in the letter to State Sen. Janea Holmquist.

Still More Companies Eyeing Quincy

It looks like the data center boom in central Washington isn’t likely to slow down anytime soon. Just a day after Base Partners announced plans for a 400,000 square foot data center campus in Quincy, officials at the Port of Quincy told the Seattle Times that Sabey Corp. is purchasing 39 acres at the port. We reported about Sabey’s interest in the port of Quincy back in April.

Local economic development officials are indicating that there may be even more data center projects in the pipeline for the area. Terry Brewer, executive director of the Grant County Economic Development Council, told the Times that his organization has “responded to requests for information from more than a dozen clients and consultants representing clients who are researching sites for data centers.”

Central Washington already has secured projects from Microsoft, Yahoo, Sabey Corp., Intuit and Ask.com which will add a total of nearly 2 million square feet of data center space in the area. The companies are lured by cheap hydroelectric power from the Columbia River, which is priced as low as 1.8 cents per kilowatt hour.

More Data Centers Coming to Quincy

There will be more data centers coming to Quincy, Washington, the small town whose cheap electricity is transforming it into a major hub in the Internet economy.

Base Partners Inc., a San-Francisco-based developer of data center properties, has acquired a 70-acre development site in Quincy, and plans to build up to 400,000 square feet of data centers for corporate users. The company plans a phased build-to-suit project of four data center facilities ranging from 50,000 to 200,000 square feet. Base Partners will offer tenants the option of using the latest energy efficiency technologies for their facilities.

“The abundant availability of low-cost hydroelectric power and fiber-optic lines as well as the region’s stable geological setting clearly make Quincy a prime data center location,” said Base Partners’ Aaron Wright. “Power costs here are the lowest in the nation, equaling 1.8 cents per kilowatt hour, as compared to 12 cents per kilowatt hour in San Francisco and 6.2 cents per kilowatt hour on average in the U.S., resulting in significant savings to end users.”

Ask.com Confirms Moses Lake Facility

Search engine Ask.com, a unit of IAC (IACI), yesterday confirmed earlier reports that it will build a data center at the TITAN complex in Moses Lake, Washington. The project adds to the growing list of data centers in central Washington state, which already features data centers from Microsoft, Yahoo, Sabey Corp. and Intuit.

Unfortunately, the press release from Ask.com doesn’t add much to what was already public about the project. The company says the new facility will be “eco-friendly” and provide additional computing power its new Ask3D feature, which combines images, video and music as well as links on a single results page.

Sabey Eyes Expansion in Quincy, Wash.

Data center developer Sabey Corp. is looking to expand its presence in central Washington, and has discussed purchasing land from the Port of Quincy, a large industrial park that is also home to Microsoft’s huge new data center. Sabey is already building a 100,000 square foot data center in Wenatchee.

The Port of Quincy is holding a meeting tonight to get public comment on whether it should sell land to Sabey. “They’ve made an inquiry and we’re trying to schedule a joint meeting between the commissioners and the Sabey group,” Port Commissioner Brian Kuest told the Columbia Basin Herald. “We’re not far enough along in the inquiry process to know exactly what Sabey’s needs are.”

Sabey says it is evaluating properties in the area and interested in discussing land values with property owners. It hasn’t made any commitments as yet, but Sabey has made no secret of its interest in the area. “We see North Central Washington as a very logical extension of our data center business,” Senior Vice President of Real Estate John Sabey said last August, when Sabey announced its Intergate.Columbia project. “We’re a long-time Northwest family and a long-time Northwest company, and we’re looking to be a part of East Wenatchee and the greater Wenatchee area for a long time as well.”

Additional development by Sabey would continue the influx of huge data centers in central Washington, including projects by Microsoft, Yahoo, Ask.com and Intuit in addition to Sabey.

Data Centers Create Boom in Quincy

The small town of Quincy, Washington is being transformed by the arrival of a major data center from Microsoft, which just opened the 470,000 square foot first phase of a project that will eventually grow to 1.4 million square feet. Quincy is one of several central Washingon towns that have been chosen for huge data centers due to the availability of open land and cheap hydro power from dams on the Columbia River. Yahoo, Sabey Corp., Intuit and Ask.com also have construction projects in the area. But in assessing the economic impact of the data center boom, much of the attention has focused on Quincy, an agricultural town of 5,300 that is home to the largest of the new projects. A story in The Wenatchee World summarizes the recent developments:

As Quincy celebrates its centennial this weekend, local real estate agents say, prices on prime farmland within or near city limits have skyrocketed 10-fold since Microsoft bought its data center property early last year. In a city that normally sees three or four new homes built per year, city administrator Tim Snead estimates some 1,400 new homes could be built over the next few years. Work is expected to begin this summer on a 125-acre movie theater, hotel and business complex on what last year was a wheat field. … Port and city officials estimate that data center and new home construction has flooded Quincy with 650 to 1,000 construction workers and subcontractors. Local businesses say the in flux has increased their sales by 25 percent or more.

With data center site location decisions for the largest providers being increasingly drawn to rural areas with inexpensive power, we’re likely to see more small towns experience economic revivals. That’s why local government in North Carolina extended generous incentive plans to gain a commitment from Google for a $600 million project in Lenoir, N.C. It will be years before it will be possible to properly evaluate that deal. But the boom times in Quincy suggest that there are changes in store for Lenoir as well.

The Economic Impact of A Data Center

Much of the recent news coverage of Google’s decision to locate a $600 million data center in Lenoir, N.C. has focused on the political debate about the lucrative economic package that helped lure Google to the state. Today’s New York Times takes a closer look at the deal, exploring what it will mean for the town of Lenoir and its residents. This street-level analysis of the impact of the new Google facility site provides a reminder of why economic development officials are now paying much closer attention to the data center site location process.

Lenoir is a town in the Appalachian foothills with an economy that has been dominated by the furniture industry, which has been hit hard by slumping sales and competition from China.

The need for jobs, economic diversification and good news is dire. Lenoir’s furniture industry has been decimated by overseas competition, and the transformation has been swift. The unemployment rate went from one of the state’s lowest, 2.4 percent, in 2000, to 6.9 percent last year, after peaking at 9.8 percent in 2003. Some 5,000 furniture jobs have been lost. Many workers in their 40s and 50s, who raised families and paid mortgages on factory salaries, have had to go back to school. … Google says it hopes laid-off furniture workers, most of whom never graduated from high school, will be among the 250 employees at two facilities on the 215-acre site, much of which was once a lumberyard.

Jobs are always the yardstick by which economic development projects are measured. As a result, it has often been difficult to quantify the impact of major data center projects, as these facilities typically house more servers than employees.

Microsoft Readies Quincy Data Center

Microsoft’s massive new data center in Quincy, Wash. is scheduled to “go live” on March 27, according to the San Antonio Express-News, which got a tour of the new facility as an advance preview of a similar data center Microsoft is planning in San Antonio. The paper notes that there’s no sign in front of the 470,000 square foot center, “but everyone in town knows where it’s located.” An excerpt:

It’s easy to get lost inside Microsoft’s main building, which contains long halls with a tile floor and a maze of rooms centering around five 12,000-square-foot brain centers that contain tens of thousands of computer servers. Each server room has two adjoining rooms lined with refrigerator-sized air-conditioning units to keep the temperature between 60 to 68 degrees Fahrenheit. Another room contains row after row of batteries to kick in for 18 seconds if a power failure should ccur before the truck-sized backup generators fire up.

The new Microsoft facility is one of three major data center construction projects in Quincy, a small town in central Washington state with abundant supply of open space and cheap hydroelectric power. Yahoo and Sabey Corp. are also planning large facilities in the Quincy area.