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High-tech companies give Columbia high marks

Sunday, October 21, 2007 | 9:42 p.m. CDT; updated 10:30 p.m. CDT, Monday, July 21, 2008

COLUMBIA — Despite a lack of “shovel-ready” sites, the Columbia area ranks among the top regions in the country for a high-tech company to build a data center, a consultant hired by Regional Economic Development, Inc., told the group on Wednesday.

The presentation to REDI by Angelou Economics consultants Bob Farley and Danny Klingler was the culmination of a five-month study of how Columbia measures up in terms of what high-tech companies want.

A typical data center is a secure warehouse that contains computers and servers needed to maintain a network. A typical data center might occupy a 200,000-square-foot building and a minimum 75-acre plot of land. The people who work there maintain and repair the equipment, which must operate 24 hours a day.

A data center wouldn’t add as many new jobs as a traditional manufacturing company — maybe 100 workers for a facility of this size, Klingler estimated. Klingler said the trade-off is that the workers generally are more educated and earn higher wages, with an average yearly salary around $60,000. The bonus for the business community is that a data center would bring high-tech “name-brand recognition” to the area. REDI might be able to use a data center as a marketing tool to attract other companies.

The consultants said that the Internet explosionhas increasingly made data centers the “backbone” of the computer industry and a good target for communities such as Columbia.

The Angelou consultants compared Columbia to four other communities — Quincy, Wash., Lenoir, N.C., Pyror, Okla., and Goose Creek, S.C. — where data centers have recently been built.

Klingler said Columbia ranks high in terms of the four main factors tech companies consider when choosing a site: the cost of power, the availability of a skilled work force, the risk of disaster and the cost of land.

Columbia’s labor force is especially attractive, Klingler said. A third of the area’s population is between the age of 25 and 44, which is the “young, talented and educated” demographic tech companiesdesire.

The consultants also evaluated specific sites suggested by REDI in a mock exercise to practice pitching sites to a real tech company. REDI provided information on three open spaces: a 138-acre site on Prathersville Road north of Columbia, a 146-acre site west of Hallsville, and a 477-acre site in Ashland that abuts Columbia Regional Airport.

Klingler said the firm would “conditionally recommend” the Ashland and Hallsville sites but not the Prathersville Road site. The Ashland and Hallsville sites had lower land costs and more electricity capacity. Klinger noted that all the sites would need infrastructure upgrades, especially increased water capacities. Data centers need about 1 million gallons of water a day for cooling.

“There’s no one place that’s ideal or ‘shovel-ready,’” Klingler said.

City Council members Laura Nauser, Jerry Wade and Barbara Hoppe attended the presentation, along with City Manager Bill Watkins. Hoppe wondered whether a data center would hire local workers or draw from a labor pool outside the area. Farley said data centers typically employ a staff that’s 75 percent local.

REDI spokeswoman Genalee Alexander said the group will follow Angelou’s advice to “aggressively” market specific sites to data centers.

The Hallsville and Ashland sites are owned by Larry Douglas and Tom Mendenhall, respectively, and both are open to selling if there’s a buyer, REDI marketing director David Meyer said.

Other cities have seen data centers change their communities.

About a year and a half ago, Microsoft announced plans to build a data center in Quincy, Wash. The town, with a population of 5,500, has since seen Yahoo, Intuit and other companies construct data centers in the area. Quincy City Administrator Tim Snead said these data centers have had an “unbelievable” effect on the city’s sales tax revenue.

Before Microsoft came to town, Quincy’s monthly tax revenue was in the $35,000 to $65,000 rangeSince the arrival of the data center, its monthly average is more than $200,000. The city is using the money to upgrade roads and parks.

Snead said the creation of new jobs didn’t contribute to this boom.

“These places don’t really employ that many people,” he said, adding that agriculture and food processing remain his area’s biggest employers. He said the Angelou consultants’ 100-employee estimate seemed “a bit high.”

Data centers are good business for companies that support them, including mechanics that maintain generators and cooling systems, and security and janitorial services.

The Google data center in The Dalles, Ore., has brought less dramatic change. Laura Comini, executive director of The Dalles Area Chamber of Commerce, described the initial impact.

“At first, when it was announced, housing prices went up sky high because everyone thought they’d bring in thousands of people,” she said.

But those thousands never materialized. Google hired some people from the area and brought in others, but it would not say how many people work in its data center or where they came from.

“It wasn’t one of the things we were allowed to know,” she said, adding the impact overall has been positive.

Columbia is different from Quincy and The Dalles, but business and city leaders still hope the area can attract similar development. According to its Web site, it’s the No. 1 strategic goal of the Chamber of Commerce to attract high-tech companies.

City Manager Bill Watkins said Columbia would benefit from a data center because the revenue from property taxes would benefit local schools without adding more students. Watkins said tax gains would still be substantial even if special tax breaks were necessary to attract a data center.

“Half of a large amount is still a large amount,” Watkins said.

“If I took much away from the presentation, it was that our lack of larger, ready-to-go sites with utilities in place is keeping us from being considered for these projects,” he said. He added that this is a larger policy issue the city can keep in mind.


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