Commentary: Tax incentives to attract data centers in Quincy have paid off

By Jim Russell
Empire Press Correspondent

Ron Cridlebaugh, economic development manager for the Port of Douglas County, has heard the criticisms that new businesses like data centers would hog electrical power and wouldn’t generate many jobs. Data centers are warehouse-size buildings with masses of computers routing Internet traffic and storing data for cloud computing.

So he studied the descriptive statistics in the 2015 report on sales and use data from the Washington State Department of Revenue to see how much benefit Quincy enjoys from the eight data centers that located in the Port of Quincy beginning in 2006.

 

Ron Cridlebaugh is economic development manager for the Port of Douglas County. (Provided photo)

Ron Cridlebaugh is economic development manager for the Port of Douglas County. (Provided photo)

 

Sen. Judy Warnick, R-Moses Lake, was the original sponsor of the Washington Data Center Bill that offered tax incentives for data centers moving to Washington state.

The legislation, RCW 82.08.9686, created an exemption from the sales and use tax for qualifying data centers locating on Port of Quincy industrial land. Tax exemptions cut the cost of server equipment and power infrastructure and investments in the charges for labor and services to install them.

Data centers in Quincy have made a whopping improvement in the economic development and quality of municipal amenities for residents.

Cridlebaugh’s analysis shows Quincy had $64 million in taxable retail sales in 2006 and $490 million in 2015, meaning Quincy has $426 million more in taxable retail sales per year.

Property tax revenue also soared.

Cridlebaugh says in 2015, “Quincy’s top 10 property owners by value contained eight data centers, compared to none in 2006.” The total property value of the top 10 companies was $2.054 billion compared to $313 million in 2006.

Quincy’s property tax revenue due increased from $810,000 in 2006 to $3.675 million in 2015, an increase of $2.865 million per year.

Homeowners are paying less in taxes because the tax levy per thousand dollars is $1.13 less than it was in 2006 despite a modest increase in housing prices. In a Port of Quincy video (https://www.youtube.com/watch?v=lN4lSBCJxyM on YouTube), Quincy Schools Superintendent John Boyd said, “Well, it’s a great advantage for a superintendent, where you can collect more money and actually ask the voters to pay less.”

Data centers pay employees well based on Cridlebaugh’s study of employment reports from the Washington Department of Revenue.

Eight out of every 10 employees earn more than $30 per hour. He said, “Over 90 percent of the employees are full time and eligible for medical and retirement benefits,” he said. “Data shows for every one data center employee there are 2.4 direct new jobs such as outside contractors to repair and install HVAC equipment, provide security services and grounds maintenance.”

Jim Hemberry, mayor of Quincy, was quoted Nov. 19, 2012 on “Today in America with Terry Bradshaw” saying, “We’re committed to reinvesting in our community by making improvements in our parks, police and fire protection, community facilities, and projects like our new public library. Quincy Public Library.”

Jonathan Smith, executive director of Grant County Economic Development, said, “Grant County and Quincy in particular have developed over the past eight years a series and set of infrastructure that typically is only found in metropolitan areas like Seattle.”

Quincy took immediate advantage of the tax break, but wooing data centers is much more competitive now. Cridlebaugh recently returned from economic development conferences where municipalities have recognized the significant advantages of attracting data centers. “They are offering millions of dollars in incentives to compensate for the fact they don’t have the low power rates we have.”