How the digital revolution gave a second life to an old timber town

Faced with the fallout from overlogging, Prinville, Ore., has new shoots of a rebounding economy. How the arrival of Silicon Valley data centers are filling the gaps in rural America.

It was not long ago that Crook County had five major lumber mills. Timber was king, and the rural Oregon county was the nation's top producer of ponderosa lumber.

But amid restrictions on harvesting from federal lands, logging started to freefall around 1990. The county's mills began closing. The global recession hit a few years later. Unemployment soared to around 20 percent, the highest in Oregon.

"We had the sawmills close, and then the bottom dropped out of the economy. So, kick us when we're down," said Donna Barnes, Ochoco Lumber Co. accounting manager.

Now, the digital revolution is providing Crook County and its main town, Prineville, with a second chance.

Fifteen years ago, Facebook came looking for a site for its first wholly owned data center. The executives liked that the chilly night air at 3,200 feet (975 meters) above sea level could cool the servers, cheaply and in an eco-friendly way. They liked the 15-year abatement on property taxes, and the fact there was room to grow.

The California-based company completed a 300,000-square-foot (27,870-square-meter) data center in 2011. Within months, it began building a second. Facebook is now building a third on a bluff 400 feet (120 meters) above Prineville. Apple followed suit, and officials recently announced it will also build its third data center in the town of about 9,000.

The future looks sunnier. Unemployment is down to 6.8 percent.

"We were overlogging in the '60s, and now we've been curbed," Prineville Mayor Betty Roppe said. "The pendulum swings the other way. And so we're trying to diversify jobs."

Logging is ingrained in Oregon's culture. A statue of an ax-wielding pioneer tops the state Capitol. Oregonians' favorite local novel is Ken Kesey's "Sometimes a Great Notion," about a logging family. Oregon's professional soccer team is the Portland Timbers, its logo a double-bladed ax over a forest-green background.

But the timber troubles that hit Crook County also affected much of Oregon and the American West.

By September 2014, the pendulum had swung so far that Oregon's high-tech industry accounted for the same number of workers and share of wages as the forest sector did in the 1970s, the state Office of Economic Analysis noted in a report. Most of Oregon's nearly 100,000 high-tech jobs are clustered in the "Silicon Forest" around Portland, said Joshua Lehner, an economist with the office.

That makes Prineville all the more remarkable. The town is a three-hour drive from Portland and light years from its liberal, hipster culture. Locals often wear cowboy hats and boots, not beanies and Birkenstocks.

Other former mill towns also have sought economic alternatives, with varying success. To create a high-tech outpost in the high desert, Prineville and Crook County leaders showed a willingness to cut through red tape.

"Our staff here are really good at bending over backward to help get things permitted," Roppe said.

The data centers spent about $6 million for land that was owned by the town and county. On June 29, the town announced Apple's plans for a new 330,000-square-foot (30,660-square-meter) data center and 70,000-square-foot (6,500-square-meter) logistics building, declaring on Twitter: "We love Apple!"

So many transient construction workers are here that motels and RV spaces are usually filled up. Once the data centers are built, those workers will move on. But locals also are among those building the data centers, and they're being hired to operate, clean and guard them.

The tech giants agreed to pay 150 percent of customary wages in the county, Roppe said. Facebook initially employed around 35 people, and that number has swelled.

"Instead of 35 people, now there are 165 people," County Commissioner Ken Fahlgren said in an interview in the century-old, ivy-covered Crook County courthouse. "Every time they build a new building, they add another group of folks that work for them. We hope that they live here, buy homes here, bring their kids to school here, and we develop an economy around that."

Highlighting Prineville's resurgence, a wetlands is being built on the town's western edge that will increase its wastewater treatment capacity. Some of the water will be filtered and used by Apple to cool its servers.

On the other end of town, Ochoco Lumber is selling the land its mill once stood on, billed as prime real estate along Ochoco Creek. The mill closed in 2001. Only a small building is left that Barnes, the accountant, uses to manage the books of the company's operations elsewhere. On the walls are photos of the mill in full swing, depicting a bygone era.

"The data centers on the hill have been key to our redevelopment, so things look a lot more positive," Barnes said.

Prineville's metamorphosis is rare for a small town with an extractive-industry-based economy, said John M. Findlay, an American history professor at the University of Washington.

He cited as examples The Dalles, which hosts a Google data center, and Quincy, Washington, which hosts Microsoft, Yahoo and others.

"These successes take some imagination – communities have to be able to see past declining industries and envision new ones," Findlay said. They also require infrastructure and political support, such as tax breaks, he noted.

Other timber-dependent towns like Bend and Hood River have capitalized on outdoor recreation and craft breweries, and attracting retirees.

In Prineville, trickle-down benefits of the data-center boom are noted in the Taqueria Mi Tiendita, where customers include construction workers.

"We bought this shop eight years ago," said Lety Toledo, who co-owns the cafe with her husband. "Those were tough times, but we hung on. Now, it is better."

Lehner, the economist, cautions that the total number of jobs in the county is the same as in the 1990s. Some people left; others gave up looking for work, driving down the unemployment rate.

Still, he believes the labor force is poised to grow in coming years.

"The outlook is fairly bright for Crook County, particularly relative to much of rural America," he said.