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Home / Washington Business - January/February 2008 / Community Profile: Quincy: Small town goes high-tech |
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Community Profile: Quincy: Small town goes high-tech |
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Written On: January/February 2008 |
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Written By: by Doug Sly |
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What happens to an eastern Washington farm town when it's selected for more than $1 billion in new high-tech construction?
Some things don't change, like the mini-mart reader board with the message, "Welcome Hunters." Some things have changed, like another mini-mart sign that reads, "Free Wireless Internet Access."
Quincy is blessed with a strategic location at the intersection of two fiber optic network backbones. Microsoft, Yahoo!, and Intuit are building huge data centers — known in the industry as server farms. The high-tech companies are attracted by proximity to redundant fiber optic bandwidth and low-cost, reliable hydropower from the Grant County Public Utility District. Two more Quincy data center projects are in the “due diligence” phase before construction begins.
Quincy is surrounded by some of the most productive irrigated farmland in the world. An incredible diversity of crops is grown here, and yields are high. Quincy also has the BNSF Railway main line from Seattle to Chicago running through town. Quincy's new intermodal rail project has the potential to make the town a center for shipping and receiving agricultural and other goods to coastal ports for export.
"We're taking the step from being a community of 5,400 people to a community of 10,000 people," says Curt Morris, president of the Port of Quincy Board of Commissioners.
The 1,000 construction workers building the data centers fill local motels and RV parks. Local officials say more than half the people working in Quincy these days don't live in the community. Many construction workers commute from Wenatchee, Moses Lake and Ephrata.
L&R Burger Stop in Quincy was known for its lunchtime burgers. Now, the drive-through is open at 5 a.m. for breakfast to serve the first wave of construction workers. L&R also has wireless Internet access, so it's common to see vehicles in the gravel parking lot with the drivers checking messages or sending e-mail from their cars.
Aside from the new faces in town, the biggest change in Quincy is new home construction. Developers have submitted plans to build more than 600 homes, ranging in price from $130,000 to $220,000 in one plat, and $400,000 to $500,000 in another.
"I had just two homes to pick from when I moved to town," said Quincy City Administrator Tim Snead, who moved here three years ago after serving 12 years as a Grant County Commissioner.
Quincy's population is 65 percent Hispanic, and more than 20 percent of residents live below the poverty level. The biggest local employers are vegetable and fruit processors, which account for more than 800 jobs. Many Quincy residents work seasonally at nearby orchards, vineyards and tree nurseries.
"We saw higher home prices in 2006, and that hurt some people," said Jose Saldana, Quincy City Council member. "This is an agricultural community, and wages are not high."
But Saldana noticed home prices coming back down to earth in 2007, and some new affordable homes are being built. He's relieved home prices are down, despite the fact that he owns Quincy Realty.
"Development comes with a price," he said. "But overall, it has been good. Quincy has been 'on idle' for a long time. It's good for the town to have something new."
Even when the data centers are at full employment, food processors and agriculture will still be the biggest local employers. Most data centers employ fewer than 75 people — although at a higher pay scale than the norm in Quincy.
What the data centers really mean to Quincy is a fourfold increase in the property tax base — without a fourfold increase in population that requires city services.
Total assessed valuation of property in Quincy is $273 million. The data centers (three under construction and two on the drawing board) constructed here in the next five years will conservatively be worth $1 billion.
Sales tax impact
Sales tax revenue from data center construction is having an immediate — and historic — financial impact on Quincy, according to Snead.
Quincy historically receives $35,000 to $65,000 per month from sales tax. With the new construction, monthly sales tax receipts are $200,000 to $300,000. One month brought in $900,000.
"It will drop off in a few years as quickly as it appeared," Snead said.
"We aren't that interested in hiring new people. We will invest the sales tax revenue in infrastructure like streets, parks, and acquiring water rights for future city needs."
Outside city hall stands an old water tower. The rest of Quincy's water system is the same age. Quincy will have to increase water and sewer rates to upgrade and expand those utilities, Snead said. Other revenue — like sales tax — can't be mixed with a municipality’s water and sewer funds.
Water issues also may lead to a unique partnership between high-tech data centers and Quincy's food processors, Snead said.
Food processors use large volumes of water and data centers need water for cooling. A feasibility study is underway to determine if industrial discharge from food processors can be used to cool the data centers.
If you're not growing, you're dying
The Port of Quincy played a crucial role in accommodating the data centers by selling the land to Microsoft and Yahoo! rather than leasing it.
"The Port could have leased the land. But by putting it on the tax rolls, all taxing districts benefit more," Morris said.
The school district and city hall are obvious beneficiaries of an increase in the property tax base. Morris is also excited that taxing districts for fire protection, libraries, cemeteries, parks, and hospitals will have more revenue.
The Quincy School District purchased land to build an elementary school and a high school to address serious overcrowding. A developer proposed Quincy Commercial Park, which will have offices, wine shops, hotels and cinema.
"If you're not growing, you’re dying. And Quincy hasn't grown in a while," Morris said. "We've never had much retail. There are still only four franchise businesses in town. But now people have ideas for wine shops and art galleries."
Morris said the new companies have been good neighbors. "Yahoo! employees worked on improvements to Veterans Memorial Park and worked on a building for the historical society," he said
Property tax base
One of the promises of industrial development is that it will lower everyone's property taxes. With Quincy anticipating a fourfold increase in the property tax base, the city can receive less per $1,000 valuation in property tax and still see increased revenue. The hope is that local tax rates will decline as the value of the data centers is recorded on the tax rolls.
"But if my house increases in value from $100,000 to $150,000, will I pay more or less property tax?" asks one Quincy area farmer. "There should probably be more information provided about this."
Running ahead of plan
Land use planning under the Growth Management Act is a difficult exercise that can take years and have political fallout. The goods news is that Quincy has completed its 20-year comprehensive plan, showing future residential, commercial, and industrial growth.
The bad news is that Quincy is already 70-percent finished with its 20-year plan.
"We have run past our comprehensive plan, so we need to sit down and revise it," Curtis said.
Growth close to Quincy
Quincy is the closest community to The Gorge Amphitheater, the Cave B Inn resort, and the growing Crescent Bar resort community. The Gorge is one of the most popular concert venues in the nation. Crescent Bar is a playground for people who enjoy condos, golfing, and boating on the Columbia River. Cave B Inn at SageCliffe is a working winery and world-class resort that attracts visitors from around the country.
"It's always nice to talk to new people, to learn where they are from and what they do," said Saldano. “We have some new faces. But Quincy hasn't changed much — yet."
One change is the sight of hunters from Seattle in a Quincy parking lot using wireless Internet to check their e-mail messages. That's progress!
SIDEBAR - Server farms and dams: A marriage made in computer heaven
Server farms—like the Microsoft and Yahoo! farms planned for Quincy—are large clusters of computer servers that can perform computing tasks far beyond the capability of one machine. In many cases, server farms have both primary and backup servers that perform a single task so that if a primary server fails, a backup server can take over. These farms typically also have network switches or routers to enable communication between the different parts of the cluster and the users of the cluster.
Because computers produce a lot of heat and enormous data-storage centers use tremendous amounts of electricity, the performance of cooling systems and the cost of electricity are critical concerns at server farms. That's why designers of these systems focus on performance per watt instead of performance per processor.
The Grant County Public Utility District, which serves Quincy, owns and operates the Priest Rapids and Wanapum dams. Together, Grant County PUD's dams are one of the largest hydropower developments in the United States. While the dams serve a county with a population of only 74,698, they have the capacity to produce 2,000 megawatts of electricity, which is enough to power a city the size of Seattle. As a result, Quincy's combination of servers and cheap, plentiful energy is a marriage made in computer heaven!
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