WATCH: How data centers rescued a struggling central Washington community

By Carleen Johnson
The Center Square

Imagine the value of your home goes way up, but your property tax bill goes down.

Imagine the small town you live in has a brand-new police station, new city hall, a new hospital, a new water and sewer system and a new high school, but your taxes never went up.

That’s the story in the town of Quincy, Washington and it’s all because of data centers.

Microsoft built a massive data center in the Central Washington community more than twenty years ago. The company selected the area in large part because of the availability of inexpensive land and fiber lines Grant County PUD had put in prior to data centers arriving.

Last month, Microsoft celebrated the community as the home of its first data center, by awarding $210,000 in grants to local organizations. The company has created several hundred jobs and contributed to property taxes that have helped fund large infrastructure projects, without raising taxes on residents and small businesses.

“The story of Quincy, Washington, and Grant County is a story of data centers gone right,” Microsoft President Brad Smith said in a recent GeekWire interview.

On Tuesday, the National Taxpayers Union held a webinar to focus on the benefits data centers can bring for American taxpayers. They brought up Quincy in their presentation.

“Seven data centers, no electric rate increase; they use only 5% of the water, there is no noise and data centers pay 57% of the taxes,” said NTU President Pete Sepp. “That’s certainly a way to do it right.”

Sepp said communities pushing back on data center development may end up regretting it in a few years.

“If you’re a community leader and say you just want to go a little slower here, and take a two-year, a three-year time out,” he said. “That might be way too long. It might actually be politically as well as economically suicidal.”

“Our biggest challenge I think is convincing folks that they have it within their power to properly manage the development to their advantage, without just saying ‘no we don’t want to do it ever, go away’,” said Sepp with NTU.

Rep. Alex Ybarra, R-Quincy, told The Center Square in a Wednesday interview that the poverty rate in his town has plummeted from above 30% to around 15% because of the economic boom created by data centers and the tax revenue they generate.

Many members of the Hispanic community who used to work only six months of the year during the busy time for agriculture, are instead working good paying jobs year-round at the data centers doing security work and other support services.

What about the water required for data centers?

“We pulled the meter readings from the data centers. They use 5% of the water. The food producers use 57% of the water for their crops. Small businesses and homes use 33% of the water,” Ybarra said. “So the data centers aren’t taking up our water.”

The main part of the reason why Microsoft’s Quincy water drain is low is because the company built a water-recycling system to reduce reliance on local water supplies. It’s called a closed-loop system. But it’s not cheap, and many data centers around the country are relying on local water supplies.

Declining property tax bills

Ybarra said his own property tax bill before the data centers was around $5,000. One year later, after the data center was constructed, his tax bill dropped to around $1,500.

He said there are twice as many homes in Quincy now as there were before Microsoft built the data centers.

“The only downside is we used to have only one stoplight and now we have two and a roundabout,” said Ybarra, joking this his commute now takes an extra minute.

Still, there is a great deal of opposition to data centers across much of the country, especially from the environmental community. And while data centers have been around for decades, the hatred for them seems to have arrived overnight.

MIT Technology Review points to the speed and scale of recent development and concerns about draining the power grid, which is why some states have required developers to supply their own power.

Earlier this year, Washington lawmakers pursued legislation that sought to require data center operators to cover costs associated with energy deployment and generation. The bill passed the House but died in the Senate after Microsoft publicly opposed it.

As reported by The Center Square on Tuesday, the Spokane City Council imposed a one-year moratorium on new data centers on Monday after Avista Utilities announced a pause in negotiations with an unnamed large load customer.

And the city of Seattle also enacted a one-year ban on large-scale data centers earlier this month.

The council said 98,000 residents emailed comments in recent months, almost all in support of the ban.

Ybarra said he continues trying to educate people about the economic gains and quality of life improvements possible as a result of data centers.

“It’s hard to disprove that data centers have been a benefit for our community…a huge benefit.”