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New York's climate played role to draw Yahoo!'s data center State's incentives also contributed

Internet search engine Yahoo! considered sites in 22 states and two foreign countries -- and initially ruled out New York as not competitive -- before ultimately settling on Lockport for its new East Coast data center, a company executive said Thursday.

Over the course of nearly a year, the technology firm explored options across the Eastern Seaboard, as far north as Canada, and then narrowed its search to four states, said Chris Page, Yahoo!'s director of climate and energy strategy.

In the process, it quickly ruled out the two foreign countries and New York State as not meeting its standards.

But as it developed a new and more energy-efficient facility design, its needs changed during the search, and issues such as access to energy and keeping the computers cool took on greater importance, she said.

That, combined with Western New York's persistence and responsiveness, led Yahoo! to take the all-important second look at the region, she added.

"We've been delighted with the cooperation we've received here," said Page, speaking before about 40 local business and political leaders at the annual meeting of the Buffalo Niagara Enterprise, held at the new Embassy Suites hotel at Uniland Development Co.'s Avant Building downtown. "We found that you were all willing to work with us to meet our mission-critical criteria. That was a game-changer for us."

Yahoo! already announced in late June that it would invest $300 million over two phases to build a 191,000- square-foot data center on 30 acres in the Town of Lockport Industrial Park, employing up to 125 technology workers. In exchange, it will receive 15 megawatts of low-cost hydropower from the New York Power Authority, plus local property and sales tax breaks from the town. The company broke ground last month.

Local officials knew the competition for the facility was intense, likely involving several other states such as Virginia, Nebraska, North Carolina, Ohio, Pennsylvania and Illinois. But the disclosure by Page marked the first time anyone has indicated just how extensively Yahoo! searched, and how much competition Western New York faced before capturing the project.

"I don't think we had any idea of the breadth of the search," said Thomas Kucharski, BNE president and CEO. "It tells me we can play anywhere if you just keep trying to find ways to make a situation work."

It also demonstrated how much local and state economic development officials, led by BNE, had to sell the region to Yahoo!, which was skeptical of the state's tax and business climate.

Ultimately, it took the state's decision to provide low-cost hydropower and significant tax breaks, as well as the Buffalo Niagara area's cool temperatures, to seal the deal.

"You probably don't hear this very often, but we love your weather," Page joked. "One of the things that caused us to favor you was your climate."

And BNE plans to use that with other projects in the future, too. "If we have a verifiable strategic advantage, we're going to play it as much as we can," Kucharski said. "So, 'cool' is cool."

Page revealed the extent of the company's months-long search process in the first detailed explanation of the California company's thinking and decision-making. She said the company has "a bunch of criteria to consider" whenever it looks for a new data center location.

She said the facility "will not have the grandeur or beauty" of other buildings in the Buffalo area, but it's of critical importance to the company. She noted that after singer Michael Jackson's death, Yahoo! had 800,000 hits to its home page in 10 minutes, nearly bringing down its entire system.

So having reliable computer operations, across multiple geographic areas, staffed by trained and dedicated personnel capable of maintaining them, is essential not only to ensuring the Web site is fast, but also that it continues running smoothly.

"It's the equivalent of building a stadium for our 580 million end users," she said. "If they all decide to drop by for a cup of coffee, we have to be ready."

Yahoo! launched its search in the fall of 2008, but did not make contact with Empire State Development until December and was not introduced to BNE until March. The company almost eliminated New York from consideration, but Page said BNE kept coming back with new ideas and solutions to its concerns.

"I can't overstate the amount of work and cooperation that went into this to answer our questions," Page said. "We know we're demanding. We're from Silicon Valley. We want everything and we want it yesterday. The tenacity was an important part of this."

And she praised the "town pride" and collaboration among more than 30 public and private entities locally. "There's a huge ability to cooperate here, across entities, that was very impressive," she said. "You don't experience that everywhere and it was very important to us."

e-mail: jepstein@buffnews.com

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