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Tech Giants Look to Grow on Farmland

April 13, 2006|From the Associated Press

QUINCY, Wash. — 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 although neither agreement has been finalized, local officials are hopeful that Grant County will become 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 developments come as Microsoft, Yahoo, Google Inc. and Time Warner Inc.'s AOL, as part of efforts to compete for customer loyalty, are boosting e-mail, video and other services that require lots of storage space.

"Data centers like this are what contains the family jewels," analyst Rob 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 rail cars 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.

The city sits hundreds of miles from Microsoft's lush Redmond headquarters near Seattle, yet the Fortune 500 company has signed an agreement to buy 74 acres in one of 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.

And as tech companies take work as far afield as India and China, the company clearly sees an advantage to boasting of local expansion.

"Washington state is our home. It's where the bulk of our employees reside and work, and here's another example of Microsoft in our state," he said.

Documents filed with the city show plans for as many as six buildings, totaling nearly 1.5 million square feet, to house racks of computers to store data. The plans include an electrical substation and a diesel-powered generator for backup power "because they can't afford to let it go down for a minute," City Administrator Tim Snead said.

Gellos said that Microsoft would probably start small in Quincy, then potentially grow to reach the size proposed in plans filed with the city. He added that Microsoft had data centers around the world, and the Quincy site was just another in that plan.

One of Microsoft's rivals, Yahoo, also has signed a tentative agreement to purchase 50 acres in another 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, $6-million lease to set up a data center in Wenatchee, about 30 miles away.

Port of Quincy's Morris estimates that the two companies could double Quincy's tax base, currently at $800 million, providing valuable money to local schools and the city's hospital. And that doesn't include high-tech suppliers that might choose to relocate there too, he said.

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