In the last three years, Hillsboro, Oregon has been flooded with direct economic investments for data center projects to the tune of $680 million.
The success of Hillsboro, Washington County and Oregon in developing what is now acknowledged as the premier data center destination on the West Coast is explored in an article in Site Selection magazine.
Washington County had plenty of built-in advantages, including the massive hi-tech presence of Intel, which is the state’s biggest employer with 16,500 employees and a $2.2 billion annual payroll. Intel has showered the state with $20 billion in investments since 1974.
Google and Facebook already have their own data centers in Oregon. Last year, Adobe, Digital Realty Trust and Fortune Data Centers announced they would be opening data centers in Hillsboro.
Fortune, which began setting up a giant data center in a 240,000 sq ft industrial building in Hillsboro last year in October, did a lot of research and explained in detail why they chose Oregon.
Their study says that Oregon is the lowest cost state for leased data center operations in the United States.Oregon does not have a sales tax on equipment purchase, which is the only big ticket item as far as setting up a new data center is concerned.
Secondly, the state has set up “Enterprise Zones” with 5 year property tax abatements per investment. This removes the entire tax burden faced by data centers, since they don’t really produce anything or create a lot of jobs.
As for cheap and clean power, the Bonneville Power Administration hydro-dams generate the lowest carbon footprint power in the country. The power rates are extremely low, coming in at less than 6.7 cents per kWh in the metro areas.
So data center customers (tenants of data center owner/operators like Fortune) in California can lower their power bill by 20 percent and their tax bill by 100 percent by moving to an Oregon data center. This makes for an overall savings of about 40 percent.
“Datacenter siting exercises are looking beyond just local business presence to factors such as power costs, tax implications, and fiber availability,” said Jason Schafer, Research Manager for Tier1 Research, in a statement issued by Fortune. “Oregon presents compelling benefits in this regard and is likely to gain momentum as a viable datacenter location in the coming years.”
Jill Miles, director of business development for Business Oregon, says this kind of “Why Oregon” storyline created by Fortune to attract customers is helping the state pitch Oregon to site selectors.
Miles says Facebook, which is building up a data center in Prineville that’s closing in on a million sq ft and $210.4 million in investments, did an economic impact analysis before choosing Oregon, which Business Oregon is now using as a marketing tool.
The average wage in Hillsboro is now 27 percent higher than Washington County, and 65 percent higher than the average for Oregon.