Quincy, Wash., Cashes in on Data Center Boom

Quincy, a small town in central Washington state, has become a big name in the data center world.

“It started in 2005 when Microsoft announced they would build a data center here; within a few months Yahoo announced, a few months later Intuit announced,” said City Administrator Tim Snead. “We had three data centers under construction in 2006.”

Other tech giants with contracts to build half a million square-foot data centers in Quincy during the next couple of years are Dell, Sabey Corp. and most recently, Vantage Data Centers, which broke ground last month.

What’s drawing big companies to this town of 6,500 residents?

“We have better fiber connectivity in our small town than anywhere west of the Mississippi,” said a representative from the Port of Quincy. Multiple fiber lines, which allow data centers to switch lines if one goes down, are uncommon for cities of a similar size, the representative said.

Bargain real estate prices and low electricity costs from hydropower generated from the Columbia River also make Quincy an ideal spot for tech companies looking to take advantage of the cloud computing boom.

Grant County, where Quincy is located, has the third lowest energy rates in the nation, said Sarah Morford, communications manager at the Grant County Public Utility District, because the utility provider owns two dams on the Columbia River that generate the county’s power.

“It’s difficult for other cities to compete,” said Snead. “For the West Coast, Quincy is the most inexpensive place to site a data center.”

Vantage broke ground on phase one of its data center in October and plans to finish the entire three-phase project by August 2012. The company purchased 63 acres of land to build its center and corporate office space.

The data center boom has been beneficial to the city. Like other small towns, Quincy’s economy has struggled in the recession. The unemployment rate is 12.9 percent, up from 8.8 percent in 2008.

With the construction, real estate prices are rising and the assessed value of the city’s land jumped from $250 million to $1.1 billion, said Snead. Tax revenue surged to $2.24 million last year from $700,000 in 2005.

Quincy spent its extra funds renovating city facilities like $1 million on a 50-year-old library and $75,000 for a new museum parking lot. Seventy percent of the streets got repaved, along with city park expansions and upgrades, Snead said. Quincy also bought a used hook-and-ladder truck for the fire department that lowered insurance rates for citizens. Plus the 400 to 500 construction workers on each project bring business to local stores and restaurants.

The data centers are even helping the city’s green initiative.

A recent partnership with Microsoft will save the city millions of gallons of potable water.

For $10 per year, Microsoft will lease to the city of Quincy its water treatment plant that’s used as a cooling system for its thousands of data center servers. The plant will be retrofitted and expanded to support a water reuse initiative, which will allow other nearby businesses and data centers to benefit.

The system will generate approximately 400,000 gallons per day or 150 million gallons per year, using wastewater from local large food processing plants. During a second phase upgrade, the plant is projected to produce 2.5 million to 3 million gallons per day, or 1 billion gallons per year, with about 20 percent being used by local industries and the remaining being used to recharge the aquifer around Quincy.

In return, the city will provide the company with reduced water rates. The plant will be operated, maintained and managed by the city with a right to purchase the plant after 30 years.

Snead said that in Washington this type of industrial reuse facility is pretty unique. The deal will save the city from having to purchase additional water rights. “Water is getting to be very, very scarce,” he said. “It’s a real green project we are doing.”