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August 22, 2012 | Categories / Uncategorized


August 22, 2012 – The national economy is still dragging. Oregon’s unemployment rate is up to 8.7 percent. And the Portland housing market is slumping again.

But Eric Hulbert sounds like the dotcom boom is beginning all over again.

Hulbert is chief executive officer of Opus Interactive, a data center looking for new clients. He is leasing space for search engine, social media and other Internet-reliant telecommunication companies.

“The economy is picking up and businesses are deciding that if they want to grow with it, they need to make some decisions now about who is providing services for them — their own in-house IT (information technology) departments, which are expensive, or someone like us, who can do the same thing for less,” Hulbert said.

Hulbert is not alone is saying the demand for data centers is growing. The Wall Street Journal reported Aug. 16 that the Silicon Valley and other tech centers in California are booming again. Big companies like Apple, Google and Facebook are in the news for planning additional large facilities in Central Oregon. And three new data centers are in the works in Hillsboro.

But Hulbert’s facilities are in downtown Portland, on the third and fourth floors of a building in the Brewery Blocks, the five-block redevelopment project by Gerding Edlen development company that began in the early 2000s.

That doesn’t mean Opus Interactive is thinking small, however. The two floors include 40,000 square feet of hosting space. Hulbert said when it is fully occupied with racks of servers and related equipment, the center will consume enough electricity to power up to 150,000 homes.

“That’s a lot of power, it really is,” Hulbert said during a tour of the center last week.

In fact, the two floors were originally designed to be a data center. They sat largely empty after the first dot-com bubble burst just as the project was completed. Hulbert is convinced the time is right to make them work like they were intended.

“Part of the fun of this is finishing a project that was started over 10 years ago,” he said.

Massive electrical cables

Most Brewery Block residents, business owners, workers and visitors probably have no idea that a data center was planned for the building at the corner of Burnside Street and Northwest 12th Avenue. Today, it is best known as the home of the Whole Foods grocery store, which occupies most of the first floor and has its main entrances along Northwest Couch Street.

Built as the A.B. Smith Automotive Building, it housed a Chevrolet dealership until the Henry Weinhard Brewery across the street bought it for warehouse space. After Gerding Edlen bought it for the project, the developer was approached by TyCom Inc., a large telecommunications company that was interested in using two floors for a data center.

With that in mind, the building was gutted, then rebuilt within the three-story façade to meet the highest seismic standards. Massive electrical cables were run into the building to provide both AC and DC power. A chilled water plant was built on the roof to serve the development — including the data center — and other buildings in the area. Diesel-powered generators were installed on the roof to provide emergency electricity in case of power failure.

But TyCom never finished the data center after the building opened in 2002. It only landed a handful of clients, including a search engine company and a social media company, before the dot-com bubble burst and telecommunication companies began collapsing. TyCom eventually sold its telecommunication unit, including the data center, to Tata Communication, a global telecommunications company. The India-based giant did not finish the center either.

Meanwhile, Opus Interactive needed more space. It started in a Northwest Industrial District building with just 1,000 square feet of space. Hulbert knew how the Brewery Block building was designed because he attended the opening ceremony. So after Tata acquired it, he put together a plan to sublease the space and began calling company officials in India.

“A big company like that is too busy for someone like me, so I just kept calling every day and leaving messages on different answering machines. Eventually someone finally called back and said, ‘What can we do to get rid of you?’ I said, ‘Come out to Portland and listen to my proposal.’ They did, and we were able to come to an agreement,” Hulbert said.

For now, Hulbert is working to lease the finished rooms on the third floor, which are already equipped with air conditioners, fire suppression systems and redundant electricity sources. The next step will be to complete the unfinished fourth floor.

Active street life

Many of the key features of the Brewery Block building are clearly visible from surrounding streets, including exterior steel beams and large cooling towers on the roof. The front door, next to a vacant retail space, looks like the entrance to any other office building, however.

“I call it security by obscurity,” Hulbert said.

There are several other data centers inside the city limits. Some are based in the Pittock Block, a building occupying a city block between Southwest Stark and Washington streets, and Southwest Ninth and 10th avenues.

The one in the Brewery Block building is different from those that sprung up in town during the original dot-com boom, however. At the time, they were called “telco hotels.” Some went into vacant buildings and warehouses in the Pearl District and along the Portland Streetcar line. The windows were sealed for security reasons, making the buildings look empty from the outside.

Portland’s City Council was concerned this was counter to the active street life it hoped the streetcar line would encourage. Several ideas were discussed, including a proposal from former Commissioner Erik Sten to encourage them to locate in the Northwest Industrial District. In December 2000, the council directed the Bureau of Planning to initiate a project to limit their impacts in parts of downtown and Northwest Portland. In May 2001, the council adopted a requirement that new data centers use half of their buildings for housing, retail stores or office space.

Although the Brewery Block redevelopment project was well under way by then, the building that houses the data center was already designed to largely meet the new standard. In addition to the entrances on Couch, Whole Foods has a coffee shop that can be entered from Burnside. It’s unlikely that most customers have any idea there’s a growing data center over their heads.

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