Quincy Rises

Tech inspires rural boom, and fear it could go poof

Los Angeles Times

Monday, May 05, 2008

By Hugo Kugiya, Special to The Times

QUINCY, WASH. — When the wind blows across the arid river basin, dust swirls and scatters over the sun-​​heated earth of this small farming town, sneaking into buildings on pant legs and the tops of shoes.

Once the dust settles, someone invariably walks into Dan Gates’ hardware store on E Street looking for a push broom and a box of a cleaning compound called Kleen Sweep. Gates used to sell about a box a week. Lately he has been selling boxes by the pallet.

My customer count is higher, transactions are up, my inventory is up,” said Gates, owner of the local True Value franchise.

It’s a good customer who buys Kleen Sweep by the ton — which is how Gates came to appreciate the people down the road who are building a data center, the town’s third.

Rural America — particularly the inland Northwest, where wind– and water-​​generated electricity is some of the cheapest in the nation — is suddenly coveted by technology companies. They construct sprawling buildings with massive computer servers, the hidden muscle and bone that process the seemingly weightless, rapidly growing data of people’s everyday lives. The technology that supports technology is strikingly old-​​fashioned: cast-​​iron pipes, reinforced concrete, sheet-​​metal ductwork.

Dust is the sworn enemy of computer equipment. When crews from software maker Intuit needed to clean up during construction, they went to Gates’ store.

My goal is to keep people from going out of town,” Gates said. That means stocking shotguns, rakes, cases of Mountain Dew, coolers, softball bats and as much Kleen Sweep as he can find.

For a town like Quincy, built on potatoes and apples, the arrival of high tech has proved an inspirational and a cautionary tale.

With its two stoplights, four banks and almost 6,000 residents — two-​​thirds of them Latino, many of whom work the fields, orchards, vineyards and packing plants — Quincy seemed an unlikely destination for the likes of Intuit, or Microsoft and Yahoo, which also have built data centers in town. The median income ($35,000) and the median price of a home ($108,000) are far below the state medians. Unemployment is relatively high and education levels relatively low — typical of the divide between Washingtonians east of the Cascade Mountains and those west of them.

Still, Quincy has done better than many small towns. Some believe the high-​​tech utilities — which town officials courted — will further transform it.

It wasn’t blind luck,” said Curt Morris, head of the Port of Quincy’s board of commissioners and owner of an insurance and real estate business that his grandfather started. “We got ourselves ready.”

The port, which manages the town’s transportation infrastructure, invested millions buying up land, laying water mains and cable and paving roads in order to make Quincy attractive to light industry. Microsoft opened its 460,000-square-foot data center last year, the first of its kind for the company. The Quincy facility, which employs about 40, resembles a bunker: plain, almost foreboding, surrounded by a metal fence.

The arrival of Microsoft and Yahoo triggered a wave of local real estate development last year. There were rumors of a Starbucks and a Blockbuster coming to town, though those haven’t been realized.

Scores of new homes went up for sale on both ends of town. Earthmovers broke ground on a shopping complex called Quincy Center.

This is the only boomtown I’m going to experience in my lifetime,” said Mike Nicholson, 64, a real estate developer from Spokane who brokered the deal that started Quincy Center. “Over the next five years, the population will triple and people will be making good wages.”

The growth of the Internet just about guarantees the future of server farms, as the data centers are sometimes called. But how they will change or benefit places like Quincy is not fully understood.

Skeptics say the arrival of these high-​​profile companies has inflated expectations.

We’re still waiting to see what this all is,” said Aleeta Merred, executive director of the Quincy Valley Chamber of Commerce. “It’s like we’re still waiting for something. So far, we’re not really seeing the growth we expected.”

Though many new homes have sold — Quincy for years suffered a housing shortage — many others have not.

Take Serenata, a planned subdivision of about 50 upscale two-​​story homes, in this town dominated by modest ramblers.

With grand entries and vaulted ceilings, the homes speak to high, perhaps unrealistic, hopes. Developers originally asked for around $400,000. They recently cut prices 25%. Few of the homes have sold; dozens remain empty, and poured foundations have been left to the weeds.

There was a feeling of a gold rush when these Fortune 500 companies came to Quincy,” said City Administrator Tim Snead. “There was a lot of excitement. You could say things have leveled off. What we hope these companies will do is diversify the economy, which we sorely needed.”

Data centers employ dozens, not hundreds. Some are technicians and engineers, but most are electricians, plumbers, heating and cooling specialists: skilled tradespeople, but not the makings of another Silicon Valley. The hope is that every job at the data center will support two or three other jobs in town — a subcontractor or a short-​​order cook, a teacher or a landscaper.

The tech buildup has provided an infusion of tax revenue. The 10-​​table L&R Cafe and the local Subway franchise were crushed by hungry construction workers at breakfast and lunch. The school, the fire station, play fields, all gleam of new construction and fresh money. In the last four months of 2007, Morris said, Quincy’s sales tax revenue went from $250,000 a month to $1 million a month.

Down at the local Windermere real estate office, agent Tom Parrish is more thankful for the sudden buyer’s market than he is fazed by slow new-​​housing sales. Last year, he said, when home prices jumped about 20%, talk around the office was about how Quincy was going to be the next Bend, Ore., a tony resort town.

It created a perception that didn’t happen,” Parrish said. “The growth is probably going to be slow. And that isn’t all bad.”