Apple plans 'major, major expansion' of Oregon data center

With a new tax law in hand, Apple is set for a "major, major expansion" of its Prineville data center, says Crook County's top administrator.


Gov. Kate Brown signed a bill last week that exempts Oregon data centers from a thorny tax that had threatened to add millions - or tens of millions - of dollars to the companies' annual property tax bill.

It was an unexpected issue for Facebook, Apple, Amazon and Google, which had each negotiated tax breaks for their server farms worth tens of millions of dollars annually, exempting their high-end computers from local property tax rates.

But a new state valuation methodology, upheld last fall by the state Supreme Court, could have undone those savings when data centers' 15-year tax breaks expired.

Amazon said that halted plans for several new data centers at its facility in Morrow County, and lawmakers said Apple had also iced its plans to add a second 338,000 "data hall" in Prineville and add a solar farm to offset its power use.

On a Tuesday broadcast of Oregon Public Broadcasting's "Think Out Loud" talk show, Judge Mike McCabe, Crook County's administrator, said Apple is ready to go ahead with at least some of its growth plans.

"They're planning on a major, major expansion," McCabe said. He indicated that negotiations on the details of that project remain under negotiation.

In a followup conversation, McCabe said he doesn't know specifically what the comapny has in mind.

"The haven't shared it with us," he said, "and we haven't seen the plans."

Apple did not respond to inquiries seeking confirmation.

The new tax law could set off a server farm building boom in Oregon.

Facebook operates three large data centers in Prineville and has said that, with the tax bill passed, it's also open to future expansion. But the company has given no timetable.

Data centers are not big employers - Facebook employs just 126 at its three large buildings in Prineville, for example. But they can have a large impact in small, rural communities. Crook County has just about 5,400 employees altogether and one of Oregon's highest unemployment rates, at 9.5 percent.

Despite their massive property tax breaks, the data centers are nonetheless major contributors to local government - a byproduct of the huge volumes of electricity they use to power and cool their computers.

Prineville forecasts that franchise fees generated by electricity used in Facebook and Apple data centers will fund more than a third of its $4 million budget this year.

An upgraded electrical substation in Crook County has created capacity for many additional data centers in Prineville. With the new tax law passed, and Mayor Betty Roppe said on OPB's show that she expects more will come.

"I want two more," she said. "I think that's doable."