Amazon doubles up in Morrow County

Published 6:44 pm Sunday, March 25, 2012

Apple is starting small with its new data center in Prineville.

Amazon, meanwhile, is going big. It just started work on a second large data center in Morrow County.

And officials at the Port of Morrow are optimistic that data hosting specialist Rackspace will exercise an option to buy 99 acres for a new facility near Boardman by its March 31 deadline.

Oregon’s data center industry is flourishing this spring, with government assistance. The Bonneville Power Administration has accelerated plans to upgrade Central Oregon’s power supply, while the state Legislature voted last month to guarantee the industry’s lucrative tax breaks.

Data centers arrived in Oregon in 2006, when Google built its first major data facility in The Dalles. Activity took off last year, when Facebook opened its first company-owned server farm in Prineville and Amazon opened a long-awaited data center near Boardman.

Data centers, tightly packed with hundreds or thousands of high-octane computers, cost a fortune to equip. Google has spent more than $1 billion outfitting its facility in The Dalles.

Construction brings an infusion of jobs to remote areas with few other economic opportunities, but data centers don’t provide many long-term jobs. Once the facilities are up and running, the computers need very little human supervision (Facebook employs just 55 running its Prineville data center, though hundreds of people helped build it).

Apple confirmed plans for its Prineville data center last month after buying 160 acres from Crook County for $5.6 million. Within weeks, work began on a relatively modest, 10,000 square-foot server farm on the bluffs overlooking town.

“It’s just kind of a first phase that they’ve thrown together to get things started on the ground,” said Prineville city planner Josh Smith.

“It’s just a small, initial phase,” Smith said. “I assume they’ll build something larger.”

Apple is just across the highway from a massive, 333,000 square-foot data center that Facebook opened last year. Facebook is already at work on a second, matching building and has room for more.

Upgrades in Central Oregon’s power network make the growth possible. The BPA has accelerated plans to upgrade its Ponderosa power substation, increasing capacity by 400 megawatts. The upgrade, originally scheduled to be complete by the summer 2013, is now due to wrap up next January.

Though the BPA provides the infrastructure, both Facebook and Apple will draw on PacifiCorp to power their energy-intensive facility. When it was exploring plans for Prineville last year, Apple described a 31-megawatt data center — enough energy to power five cities of Prineville’s size.

Apple confirmed its Prineville plans last month and told The Oregonian that it intends to operate a “green” data center. Apple is building a large solar array next to an existing data center in North Carolina, but it’s not clear whether it plans anything similar in Oregon and Apple didn’t respond to inquiries last week.

Power upgrades open the door for a cluster of data centers in Oregon’s high desert, according to Roger Lee, executive director of Economic Development for Central Oregon. Other companies are also contemplating Prineville data centers, he said, along with potential projects in La Pine, Redmond and Bend.

In Morrow County, Port officials say, Amazon began construction of a second, 120,000-square-foot data center earlier this month. The company opened a matching facility there late last year.

The Port has actively courting Rackspace — which goes by the code-name Boardman Acquisition LLC in negotiations — since last year.

Port officials say they are finalizing details and are “optimistic” the Texas company will green light the project this week, before its option to buy land for the facility expires at the end of the month.

Relatively low energy costs make the state attractive to power-hungry data centers, which need the electricity to run thousands of computers that store clients’ photos, songs, movies, corporate data and all manner of other online information. Oregon’s real attraction, though, is its tax structure. The state has no sales tax, so data centers save substantially when they buy new computers.

And state law gives cities and counties the ability to establish rural “enterprise zones” that exempt data centers’ equipment from property taxes that other businesses pay. Those exemptions can save big data centers tens of millions of dollars annually.

Last year, Facebook expressed concern that the state might try to override local tax breaks by categorizing data centers as utilities. The state has never levied such taxes on data centers, but in February the Legislature removed any doubt by exempting data centers from “centralized taxation.”

“The results of the legislative session were critical for us continuing to do this,” Lee said.

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