- The Washington Times - Friday, November 3, 2000

Data centers, a critical component of any technology-based economy, have lost favor among District of Columbia planners, but real estate brokers predict these high-tech fortresses will continue to thrive in the suburbs.

There are about 10 centers in the District and between 40 and 50 centers in the suburbs, according to Staubach Co., an international commercial brokerage.

Allen Tucker, a Staubach vice president, said the District's restrictions will not hurt demand in the region for the centers.

"There is no reason to believe it is going to let up," Mr. Tucker said, noting that his research suggests the area ranks with San Jose, Calif., and New York as the top markets in the nation for data centers.

The D.C. Zoning Commission adopted emergency measures last month to restrict data centers, saying it feared a glut of centers in NoMa, the area north of Massachusetts Avenue that the city has designated as its technology business district.

Internet companies use data centers to house the heavy technology equipment that powers their on-line services, and to route on-line traffic around the world. The centers typically have no windows and feature extra-thick walls, floors and ceilings to protect the machinery inside from bad weather.

Because data centers usually employ fewer than 20 workers apiece, the area could become a dead zone instead of a vibrant business district, city planners said.

But developers believe high-tech companies need data centers and will continue to build them, if not in the District, in the suburbs.

Last week, America Online Inc. announced plans for a $555 million data center in Prince William County, Va., and a San Jose, Calif., developer said it will build a $1 billion campus of data centers on 188 acres in western Prince William.

Most centers also have sophisticated wiring that provides the equipment with an uninterrupted power supply, and high-tech air-conditioning systems to ensure the equipment does not overheat.

Mr. Tucker said even though the centers don't employ many people, the typical worker is highly skilled and well paid, with annual salaries that can begin around $80,000.

"One data center engineer can be worth five traditional office workers," Mr. Tucker said.

The centers are embraced in Northern Virginia for the very reason the city has shunned them. Officials in Prince William and Loudoun counties said the small staffs at data centers do not add significantly to the region's crowded roads and schools.

Prince William has even cut its annual tax on computer equipment from $3.70 to $1.50 to help lure data centers, and it promises to approve proposals for new centers within 30 days.

"They don't require a lot in terms of public services, but they still generate tax revenue," said Robyn Bailey, spokeswoman for the Loudoun County Department of Economic Development.

Chris Epstein, a Rockville, Md., developer who builds data centers in the D.C. and Chicago markets, said he will probably continue to build centers in Northern Virginia.

"Companies want their data centers near each other, and Northern Virginia is one of the biggest markets [for the centers]," Mr. Epstein said.

Leonard Eckhaus, president of the Association for Data Centers, Network and Enterprise Systems Management, said the growth of the Web-hosting industry will fuel demand for data centers in the D.C. area and other markets.

Many data centers are used by Web-hosting companies such as Denver-based Qwest Communications International Inc., which helps businesses conduct electronic commerce. Qwest operates a 100,000-square-foot data center in Northeast.

Forrester Research Inc. of Cambridge, Mass., estimates the Web-hosting industry will grow from $2.5 billion in sales this year to $19.8 billion in four years, a 79 percent increase.

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