East Oregonian : E.O. (Pendleton, OR) 1888-current, August 11, 2018, WEEKEND EDITION, Page Page 11A, Image 11

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    OFF PAGE ONE
Saturday, August 11, 2018
East Oregonian
Page 11A
DATA: Local programs to help staff the data centers
Continued from 1A
Oregon report and infor-
mation from the Morrow
County Assessor’s office.
A memo by Business Ore-
gon reports Vadata employs
130 people at existing data
centers in Umatilla County.
The memo, addressed to the
Oregon Business Develop-
ment Commission, states that
after construction is com-
pleted at new facilities for
which construction started in
July 2017, they will employ
another 100 people, at aver-
age annual wages of $75,000.
Morrow County Asses-
sor Mike Gorman compiled
data that show 149 people
are employed at the site on
Lewis and Clark Drive, and
107 people at a site on Rip-
pee Road, both at the Port of
Morrow.
The data centers provide
high-paying jobs in the area,
but most of the data centers
in the region are also under
some sort of incentive pro-
gram, abating some of their
property taxes.
According to data com-
piled by Port of Morrow
general manager Gary Neal,
Vadata, Inc., was the fourth
largest contributer to the
port’s tax base as of 2017.
The port’s industrial
growth, including from
Amazon, has contributed to a
massive increase in the coun-
ty’s assessed value in a short
period of time.
The two Port of Mor-
row sites qualify for several
enterprise zone agreements,
a program that allows a new
business that meets a cer-
tain employment and wage
requirement to locate in a
certain area, receiving a five-
year tax abatement.
But Gorman said the
exemptions are broken down
even further — it’s possi-
ble for a single site to be
under multiple enterprise
zone agreements, for sepa-
rate aspects of the business.
According to state law, he
said, industrial services have
separate accounts for build-
ings, machinery and personal
property. An agreement on
one of those accounts could
expire, but the business
could still be exempt in other
accounts.
When Amazon builds a
data center building, he said,
they can apply for a five-year
exemption for the physical
structure. When they install
equipment, they can apply for
a three-year exemption for
that equipment. If they add
more equipment later, they
can apply for another exemp-
tion for that equipment.
“Right now we have eight
agreements on these two
sites,” he said.
The company paid $1.2
million in taxes on the Lewis
and Clark site at the Port of
Morrow in 2017, and was
exempt from paying about
$9.5 million in taxes in the
2016-2017 property tax year.
At the Rippee Road site the
same year, the company paid
$749,944 in taxes, according
to Gorman. It was exempt
from paying $6.7 million in
property taxes that year.
Umatilla County Assessor
Paul Chalmers said the tax-
able value for the McNary
data center in the 2017-2018
fiscal year was a little over
$355 million, and the value
of the exempt property for
that location was close to
$402 million. He said the
McNary site is currently the
only valued location.
In Umatilla County, the
data centers also benefit from
tax exemptions, but under
a different program. While
the McNary site in Umatilla
had been under a five-year
exemption, that site and two
new locations applied and
qualified last year for the
Strategic Investment Pro-
gram, or SIP, agreement.
Under the agreement, the
company is exempt from
paying some property taxes
for 15 years on those facili-
ties, in exchange for paying
the county $4 million a year.
The new developments
are between Lind and Old
River roads in Umatilla,
and off Westland Road near
Hermiston.
According to a memo
from Business Oregon, the
agency that facilitates the
SIP agreement, Amazon’s
application states that the
project will consist of at least
five data center buildings of
$500 million in real prop-
erty improvements, and will
house more than $2 billion in
personal property.
Global business, local
resources
Both port managers said
Amazon chose to locate in
the area because of access to
a bevy of resources.
“You need land, water,
power, and workforce,”
Puzey said. “All those are a
resounding yes.”
Puzey said the infrastruc-
ture that made the Columbia
River Basin attractive to data
centers goes back to projects
from the middle of the 20th
century.
“When the dams were
built, there was such an
abundance of hydroelectric
power, we attracted direct
service industries here,”
he said. Several aluminum
plants located on the Colum-
bia, but as the economy
changed, he said, many of
them moved offshore.
“That power became
available,” he said.
Puzey said he doesn’t
know the exact scope for
expansion of data centers in
the area, but suspects there’s
room for growth.
Neal said the Port of Mor-
row has 700 or 800 acres of
shovel-ready land, which
includes access to power,
sewer, water, and fiber.
“We’ve been involved
with opportunities to have
fiber in the ground for 20
years,” he said, “So they
have connectivity.”
A data center site can take
up to about 100 acres, Neal
said.
“I don’t think we’ve
reached that limit yet,” he
said. “It’s really driven on
timing and connectivity to
the grid. Transformers have
to be built, and that takes a
process.”
Local companies have,
thus far, been able to keep
up with Amazon’s electric-
ity needs.
Bonneville Power sup-
plies wholesale power to
Umatilla Electric Coopera-
tive at four locations between
Boardman and Hermiston,
and Neal said two of them
are at the Port of Morrow. He
said as the port grows, a third
may need to be added.
“They continue to add
capacity,” he said.
Steve Meyers, member
services administrator for
Umatilla Electric, said the
company doesn’t talk about
the accounts of specific cli-
ents. But he said in general,
Oregon’s electricity rates
are some of the lowest in the
nation — the 41st most-ex-
pensive rates for residential
customers, to be exact.
“Industrial rates are
lower,” he said.
Meyers said another rea-
son many industries choose
to locate in the area is that the
source of power is renewable.
“It’s flexible, but about
78.5 percent is large hydro-
power,” he said. “About 7.5
percent is nuclear. Ninety
percent of our power can be
clean.”
Industrial customers now
make up about 61 percent
of UEC’s revenue base. In
2010, before the first data
centers came online, only
about 25 percent of the com-
pany’s revenue came from
industrial customers.
“Some substations serve
multiple member classes
(industrial, commercial, resi-
dential),” he said. “But a sub-
station can also be built to
serve an individual member.”
Data centers need access
to sufficient water to cool
down servers.
“I have a water supply
agreement with the client for
all data centers under con-
struction or anticipated,”
Puzey said.
According to a letter
from Vadata to the Umatilla
County Planning Department
in March 2017, it takes about
400 gallons of water per min-
ute to keep the servers cool.
There are local programs
to help staff those data cen-
ters. Blue Mountain Com-
munity College has a data
center technician program,
from which many alumni go
directly into jobs at Amazon.
“The data center techni-
cian program was created
in response to client needs
to have certified data cen-
ter technicians in our areas,”
Puzey said.
Neal said the data cen-
ters have given people the
opportunity to develop skills
that can help them earn more
money than most other jobs
available in the region.
“While it’s not a huge vol-
ume, if you look at the total
numbers of workforce in the
region, it helps with some
diversity and good paying
wages,” Neal said. “It cre-
ates another sector in our
economy.”
Despite the unknowns
about the massive company’s
operations on local property,
both port managers said it’s
been a positive development
for the area.
“I think they’ve been more
open today than in 2010 —
they didn’t want anybody to
know what they were doing,”
Neal said. “Now they’re
becoming part of the com-
munity. It’s evolving.”
Puzey said he hopes more
will be constructed.
“This is a once-in-a-life-
time economic develop-
ment opportunity,” he said.
“The employment opportu-
nities are second to nothing
I’ve ever seen. [They] allow
people in this area to buy
real houses and have normal
lives.”
COMPLEX: ‘If you don’t know where you’re going, then any road will get you there’
Continued from 1A
other sports such as Soccer.”
The proposal will come
before the city council on
Monday night, during its 7
p.m. meeting at city hall, 180
N.E. Second St. The city has
appointed an EOTEC advi-
sory board made up of repre-
sentatives from the city, Uma-
tilla County Fair, Farm-City
Pro Rodeo, hospitality indus-
try and community at large,
but major decisions such as
the lacrosse fields are still
brought before the council for
a vote.
The committee and Venu-
Works are also working on
a written long-term plan for
EOTEC, which opened its
event center in the spring of
2016 and hosted the its first
fair last year.
They are providing several
outreach opportunities to the
public, including an online
survey in English and Span-
ish at www.eotecsurvey.com.
Anyone who fills out the sur-
vey will be entered to win a
$50 Visa gift card or family
passes to the Hermiston Fam-
ily Aquatic Center. The city
will also solicit feedback spe-
cifically from EOTEC cus-
tomers, partners and others
with an interest in the project.
City Manager Byron
Smith said the city was
pleased to continue EOTEC’s
partnership with the fair and
rodeo and the goal of the stra-
tegic plan would be to sup-
port their success while also
attracting other uses through-
out the year.
“If you don’t know where
you’re going, then any road
will get you there,” he said
in a statement. “We want to
use this process to get a clear
message from the commu-
nity about what the EOTEC
facility should look like 10
years from now, and that
will allow us to avoid short-
sighted opportunities which
may compromise our path
toward the community’s ulti-
mate goal.”
———
Contact Jade McDowell
at jmcdowell@eastorego-
nian.com or 541-564-4536.
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