High-tech firms eyeing Quincy area

  • Associated Press
  • Wednesday, March 29, 2006 9:00pm
  • Business

QUINCY – In the heart of potato country, a high-tech boom is taking place.

Technology giants Microsoft Corp. and Yahoo Inc. are planning to build massive data storage centers amid the sagebrush and farm fields of rural central Washington. The draw appears to be the region’s relatively cheap land, inexpensive hydropower and wide-open space, and while neither agreement has been completed, local officials say the growth could make Grant County known as more than the nation’s leading supplier of spuds.

“This could be a real boon to Quincy and to Grant County,” said Curt Morris, Port of Quincy board president. “It’s bringing renewed optimism to the people of the town, especially the business owners. We’re interested to see where it takes us.”

The tentative deals come as Microsoft, Yahoo and Google Inc. are boosting the amount of data such as e-mails they’ll offer to hold for people, part of efforts to compete for customer loyalty. That translates to huge demand for storage, analyst Rob Enderle said.

“Data centers like this are what contains the family jewels,” Enderle said. “They’re looking for low-cost real estate and stable sites in terms of weather and geographic activity. It means they’ve done some work and determined it’s one of the least-expensive, safest places they can build.”

Quincy, population 5,300, has long been an agricultural hub in Washington. Trains carry railcars loaded with apples, potatoes, onions and hay to points both east and west, and food processors and packing sheds comprise most of the city’s industrial base.

Located about 10 miles east of the Columbia River in central Washington, the city sits hundreds of miles from Microsoft’s lush Redmond headquarters west of the Cascade Mountains. Yet, the Fortune 500 company has signed a tentative agreement to buy 74 acres in one of the Quincy’s five rapidly filling industrial parks. The price: $1 million.

“The Quincy area is attractive to Microsoft for a number of reasons: space available, the land, the access to power, and the close proximity to our headquarters here, which is always good for us,” Microsoft spokesman Lou Gellos said by telephone from Redmond.

Microsoft hasn’t released many details about the deal, which could be completed by the end of March. Documents filed with the city show plans for up to six buildings, totaling nearly 1.5 million square feet, that would house racks of computers to store data. The plans include an electrical substation, as well as a diesel-powered generator that would provide backup power, “because they can’t afford to let it go down for a minute,” said Tim Snead, city administrator.

“My understanding is their objective is to increase their capacity for the Internet, search engines,” Snead said. “All I know is there’s a lot of computers.”

Whether those computers will hold consumer information or miles of code – or will back up other servers elsewhere – remains unknown. Gellos declined to provide further details, saying company officials were still finalizing plans for the site.

Microsoft has data centers around the world, and the Quincy site is just another in that plan, Gellos said. The company will likely start small, then could eventually grow to reach the size proposed in plans filed with the city.

The city does not offer tax breaks to businesses just to locate there. State tax credits for companies that set up shop in economically depressed or rural areas, such as Grant County, are limited to manufacturing and research and development.

“Without knowing what their plans are, I can’t speak to whether they would qualify specifically,” Mike Gowrylow, state Department of Revenue spokesman, said about Microsoft and Yahoo. “But just building a data storage center doesn’t qualify.”

However, the Grant County Public Utility District, a consumer owned-utility, operates two hydropower dams that provide inexpensive, reliable power to the region. The utility also operates one of two fiber-optic networks that stretch to Quincy.

Internet giant Yahoo also has signed a tentative agreement to purchase 50 acres in an industrial park in Quincy. The company, based in Sunnyvale, Calif., has until the end of April to seal the deal for $500,000. The company also has signed a 10-year, roughly $6 million lease to set up a separate data center in Wenatchee, about 30 miles away.

Morris estimates the two firms could double Quincy’s tax base, currently at some $800 million – providing valuable money to local schools and the city’s hospital. And that doesn’t include high-tech suppliers that could choose to relocate there as well, he said.

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