Costco's future uncertain in Grant County

Dark fiber halt impacted decisions by Amazon, Oracle

MOSES LAKE - Retailer Costco wants to open a data center in Moses Lake, but can't because of the "inability to guarantee long-term access to dark fiber," a store official stated.

Dark fiber doesn't contain equipment, while lit fiber does. Some large companies prefer dark fiber because it allows them to better monitor, maintain and control the entire system.

Dark fiber sales were halted in May while Grant County PUD set new rates. The halt was estimated to last two or three weeks, PUD General Manager Tim Culbertson said at the time.

The PUD's Board of Commissioners reached a consensus about a month ago to keep the dark fiber sales halt in place, Grant PUD Commissioner Tom Flint said. Flint and Commissioner Terry Brewer opposed the consensus. The halt was recommended by staff.

"Unfortunately, our combined efforts have fallen short as it relates to meeting Costco's needs for high-speed network connectivity," wrote Costco Infrastructure Director Don Coleman in a Sept. 24 e-mail obtained by the Columbia Basin Herald.

Coleman wasn't immediately available for further comment on Tuesday.

Costco was working with WSS Corporation President Lee Willis on settling in the Titan Building near Moses Lake. The WSS Corporation is the business management and operations company for the organization owning the Titan Building.

Opening two Costco data centers was discussed, but the first data center is no longer on the table, he said. And Costco won't open a second data center unless the dark fiber moratorium is lifted, Willis added.

"What's so sad about this is how many jobs this could have been," Willis said. "It could have easily been well over 100 jobs."

"The problem they have isn't the price of the fiber," Willis said. "Their biggest concern is the fact that (the PUD) has a very limited offering for fiber."

The PUD won't allow other carriers to lease dark fiber like they used to, he added.

Willis said he is working with other companies to use the Titan Building, but expects "it will be the end of it" when they are told they must buy lit fiber.

Software company Oracle and online book, music and movie store Amazon recently backed away from Grant County because of the dark fiber sales halt, Willis said.

Data centers must have a carrier class provider, such as Sprint, AT&T or Qwest to be responsible for the circuit and take total control for the entire distance, he said.

Flint said he supports lifting the moratorium. He said he reached the conclusion because he doesn't want to put any road blocks in the way of creating jobs and bringing new business to the area.

Brewer said he's been in favor of dark fiber all along. He works as executive director of the Grant County Economic Development Council, an organization that works to bring new business to the area.

"I was, I am and will continue to be," Brewer said of supporting dark fiber. "I was disappointed to learn of Costco's decision and hope there aren't too many more like that."

At the direction of the EDC board, EDC board president Lynn Garza wrote a letter to the PUD asking the moratorium be lifted. Titan building owner, The Red Sea Group, also wrote a letter against the halt.

Grant PUD Commissioner Greg Hansen opposes the utility leasing dark fiber, he wrote on his Web site.

"With the current and future growth in Grant County, the PUD needs the unused fiber lines for its own use in future years," Hansen wrote. "Data centers want the PUD to build the fiber lines for them as an inducement to bring their business to Grant County. To me, it's getting a little irritating with companies asking for concessions and having the people of Grant County subsidize their business."

Grant County Commissioner Bob Bernd said he's interested in more industrial development, creating more jobs and expanding the county's tax base.

"It was hard for me to vote to keep the moratorium," Bernd said in part. "That hurt. I traditionally have tried to support industrial growth."

He said he understands Costco is still considering the Titan Building. He referenced a statement in Coleman's e-mail which noted a "short-term strategy" to start studying a better long-term plan for a second data center.

Grant PUD Commissioner Randy Allred supports the moratorium. He said the PUD's lit fiber program more than exceeded the Costco's requirements. Allred said learned from a Costco representative it was premature to suggest an immediate timeline. Also few if any jobs would be created, he said.

Allred also spoke of the business plan the commission agreed upon, which contains lit fiber.

Offering dark fiber "takes the meat" out of the financial picture and it doesn't seem likely both lit and dark fiber can be offered, he said.

The Moses Lake Chamber of Commerce response team meeting will be talking about the issue at 7 a.m. Thursday at the chamber office, said the chamber's executive director Debbie Doran-Martinez.

The group will come up with a list of pros and cons and see what's best for the community, she said.

About 20 members of the community typically participate in the response team meetings, including a wide representation of businesses, school district, a county official and state officials, she said.

It's possible a letter to the PUD will result from the meeting, Doran-Martinez noted.