DH Kass, Senior Contributing Blogger

October 22, 2012

2 Min Read
Apple Breaks Ground on Two New Massive Data Centers in Oregon

Apple (NASDAQ: AAPL) broke ground last week on a $68 million initial phase of project to build two 338,000-square-foot data center facilities in Oregon expected to cost the vendor “hundreds of millions or billions of dollars once it’s outfitted with powerful servers to run Apple’s iCloud service,” according to a report in The Oregonian also picked up here.

Apple has pledged that the new data centers will be powered entirely with renewable energy (wind, hydro, and geothermal power) purchased from local Oregon sources. According to plans filed with Crook County as detailed by The Oregonian, the $68 million figure covers costs associated with one building and two data halls, with Apple eventually adding a second building and 14 more data halls as well as reserving space on the property for still more buildings in the future.

This past February, Apple plunked down $5.6 million for the 160-acre parcel in Prineville, Ore., only two months after first eyeing it. The land acquisition apparently was well-received by Oregon’s Crook County Commissioners, whose chairman Mike McCabe, a county judge, was quoted as saying, “we’re just delighted [Apple] decided to sign on the dotted line and come to Prineville. We’re going to forbear some taxes [but] we’re looking at a couple hundred jobs for quite some time in the construction phase and maybe half that many after that.”

As for those tax breaks, Oregon agreed to provide Apple with a so-called “enterprise zone,” meaning it would exempt computers and other equipment from county property taxes for an undisclosed number of years, a side deal that could be worth several million dollars in tax savings no matter how it’s sliced. No wonder Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG), Facebook (NASDAQ: FB) and Adobe (NASDAQ: ADBE) already own or are building data centers in Oregon with Rackspace (NYSE: RAX) headed there, too. Apple’s Prineville property, by the way, is just one-quarter mile from Facebook’s facility.

Still, it’s not just the allure of the land and tax breaks attracting the attention of IT kingpins, it’s also Oregon’s energy prices. For example, in Morrow County, the site of two Amazon server farms and where Rackspace intends to build, power costs as little as 3.34 cents per kilowatt, about 25 percent of what it costs in California.

“That’s part of why the Northwest is such a popular destination. Data centers find our power –our power rates, to be precise – irresistible,” wrote The Oregonian.

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About the Author(s)

DH Kass

Senior Contributing Blogger, The VAR Guy

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