Lee Fehrenbacher//February 28, 2012//

Server farms are quickly becoming Oregon’s new cash crop, and construction contractors stand to reap the benefits.
鈥淚 think Oregon is poised to grab an outsized share of the data center market for both this nation and the world,鈥 said John Sheputis, CEO of San Jose, Calif.-based data center development company Fortune Data Centers.
Sheputis said Oregon’s geography, seismic geology, taxing structure and infrastructure access make it prime real estate for server farm development. Companies like Amazon, Google and Facebook already have established data centers in the state in recent years.
In Hillsboro, ground was broken in November on a data center for Digital Realty Trust, and permitting is under way for a building for Adobe Systems Inc.
And Fortune last week held a small celebration to recognize 100,000 hours of accident-free labor at the site where a 240,000-square-foot data center is being built in Hillsboro. He said work is expected to wrap up in the next couple of months.
Sheputis wasn’t able to comment on Fortune’s capital cost, but he said it would be in the tens of millions of dollars, with more to come.
鈥淥f the total capital involved you’re going to have 10 to 20 percent of that a year in maintenance,鈥 he said.
So when Apple last week paid $5.6 million for 160 acres in Prineville to accommodate a future data center, it was a big deal for the jobs-deprived city, said Jason Carr, manager of the Prineville/Crook County Economic Development program.
At 15.3 percent, Crook County’s unemployment rate is 6.4 points higher than the state’s. A big reason for that, according to Carr, is that changing technology and environmental policies have affected the logging and agricultural industries.
鈥淲e just don’t have the same type of jobs in those industries that we used to, and unfortunately, over the last 20 to 30 years, a lot of those jobs that we lost in those industries haven’t been replaced with something else,鈥 he said.
But data centers may at least provide a lift. Carr said he doesn’t know the exact details of Apple’s planned project 鈥 i.e., size, cost, start date 鈥 but he has a good idea of what it will mean to the local economy. He saw the impact of Facebook’s effort to construct a 330,000-square-foot data center in Prineville.
鈥淚n less than a year, there were points in time where there were upwards of 350 to 400 construction workers on-site at any one time,鈥 Carr said. 鈥淎nd when your county has a total population of 20,000, and the city is 10,000, you can imagine the type of activity that creates at our local hotels, our restaurants and other facilities.鈥
Try $1.2 million as a result of per-diem spending by nonlocal workers alone. That’s according to a report by Portland economic consulting firm ECONorthwest, which Facebook contracted to assess the economic impact of its facility construction.
According to the report, the total capital cost for the Prineville data center was $210.4 million, which resulted in $75.7 million of capital spending across the state, including $24.4 million in Central Oregon, where personal income totaled $9.2 million.
Facebook is now building a second data center in Prineville, equal size to the first, Carr said.
鈥淪o we’re realizing the impact from construction this year again and we’ve heard rumblings that they could possibly build a third, maybe even a fourth in the future depending on business needs,鈥 he said.
That could keep construction going in Prineville for the next five to seven years, Carr said.
Recently, the Oregon House of Representatives set the stage for future development by passing Senate Bill 1532, which gives Facebook special tax-exempt status despite the state’s tax-laden classification of the media giant as a communications company.
Sheputis believes the Legislature made a good move.
鈥淵ou guys have an amazing opportunity here,鈥 he said of the state. 鈥淚 don’t think all these people are choosing Oregon by accident, but if you persist in trying to muddy the waters in what you’re offering people, it’s not going to help.鈥
Meanwhile, 175 miles north of Prineville, Hoffman Construction last week broke ground on a 120,000-square-foot data center for Amazon in Boardman. It will join one completed last year for the online retailer.
Gary Neal, general manager for the Port of Morrow, said the latest project could generate as many as 300 construction jobs and as much as $150 million in capital spending to the area.
Neal said the port also has an option agreement with a company called Boardman Acquisitions LLC to purchase a 100-acre plot of land for data center construction. Boardman Acquisitions, according to a recent application to Business Oregon for a tax exemption, appears to be San Antonio-based company Rackspace Hosting.
Neal said the sale would be the first phase of a three-part plan to sell the company a total of 200 acres.
Following construction, a data center doesn’t employ as many people as a manufacturing plant, but Carr said the impact is still significant. He said the operating Facebook facility has 60 full-time employees and that for every 10 jobs created by the data center, 10 more pop up in the economy. That translates to an additional $5.5 million of payroll circulating through the community annually.
Neal said that even small boosts are important for his part of the state.
鈥淓ven if it’s not 10,000, 20 to 30 or 50 jobs in our economy is just as important as 500 jobs in Portland,鈥 Neal said.