Google named as company behind proposed $576 million Cedar Rapids data center

CEDAR RAPIDS — Internet giant Google was named in documents Thursday as the company behind the potential new $576 million data center in Cedar Rapids’ Big Cedar Industrial Center, marking a milestone for the city and state of Iowa in supporting large-scale tech investments.

If the project advances, the company will build one or more data centers along 76th Avenue SW and Edgewood Road SW in the Big Cedar Industrial Center — expanding Google’s Iowa footprint. Until now, the company had not been named, but the Iowa Economic Development Authority board’s Friday meeting packet states it will consider Google’s application for state incentives.

The project is the largest economic development project in the city’s history based on the level of investment. It also is one of the largest projects in state history, City Manager Jeff Pomeranz said.

“This is an extremely important economic development project for Cedar Rapids and our region,” Pomeranz said. “... We have a lot of confidence in Google that this will be a tremendous benefit not just for the company but for the community, and we look forward to the board reviews of the application tomorrow.”

In 2022, Google announced plans to invest another $600 million in what has become a $5 billion Council Bluffs data center complex. When Google first shared it would build there in 2007, the Des Moines Register reported, the initial $600 million investment was hailed as among the largest in state history. Then-Gov. Chet Culver said it would “help create the Silicon Valley of the Midwest in Iowa.”

In 2022 alone, Google’s economic impact report states that it spurred $1.45 billion of economic activity for thousands of Iowa businesses and other entities.

The project’s advancement adds to rapid growth in southwest Cedar Rapids as the construction of massive warehouses and other buildings has taken off around in the area around Interstate 380 and The Eastern Iowa Airport.

“As demand for Google’s services increases, our capacity must grow to meet this demand,” a Google spokesperson said in a statement. “We are always planning for future capacity needs and are currently evaluating the potential for a data center site in the Cedar Rapids area. These are complex projects and development of the site is subject to a variety of factors including but not limited to competitive energy rates along with a sustainable and sufficient energy supply.”

  Buy Photo

‘Milestone’ for Cedar Rapids

In awarding city tax incentives to the company and approving a development agreement, the Cedar Rapids City Council last month lauded the project — the city’s largest ever — as a “historic” milestone in Cedar Rapids’ economic development history.

“As the state’s second largest city, it’s fitting that a project like this be located here,” Mayor Tiffany O’Donnell said. “We have the infrastructure ready for it – all of it very measured, very calculated before we even agreed to have the conversation (with Google). It’s also my hope that having users like this will help support our ability to continue to grow our infrastructure but no increase for taxpayers.”

An 890-acre certified portion of the overall Big Cedar site is Iowa's first mega site, which offers hundreds of acres of development-ready land to potential developers. All 1,391 acres are controlled by Alliant Energy.

Alliant, the City of Cedar Rapids, the Cedar Rapids Metro Economic Alliance, ITC Midwest and the IEDA collaborated to bring this project to fruition.

Pomeranz said the city has been working on this project for over five years, so this is the “culmination of great effort by the community to bring this project to our city.”

“This is an exciting time for Cedar Rapids, the region and the state,” Pomeranz said.

Project will create at least 31 new full-time positions, maybe more

Under the agreement approved with the city, the development would create at least 31 new full-time employees paid at or above the high-quality wage rate, which starts at $26.20 per hour and ramps up to at least $31.44 by the end of the contract performance period. Construction is anticipated to start within three years of the development agreement taking effect.

Development Services Manager Bill Micheel has said staff anticipate the company will employ more than 31 people, but do not yet know the full range of jobs that could be created. There would be seven or eight years of construction and likely hundreds of long-term construction jobs created, in addition to the permanent jobs at the data center.

For comparison, Google says it has created jobs for more than 900 people on its Council Bluffs site. That includes full-time and external supplier roles such as computer technicians, engineers, food services, maintenance and security.

Agreement includes tax exemption, community betterment fund

Under the deal with the city of Cedar Rapids, the company will receive a 20-year, 70 percent tax exemption so long as it meets employment thresholds and the high-quality job application is approved. The tax break would start once the first data center is complete.

Other components of the deal with the city include:

The community betterment payments would far exceed the more than $3 million Google’s website says it has invested in local schools and nonprofits around the Council Bluffs area. In 2011, Google partnered with the City of Council Bluffs to launch a free WiFi network in and around the city.

In addition to growing the city’s tax base, community betterment payments — the first included in a Cedar Rapids economic development project — make for “a partnership that is going to contribute millions of dollars back into making our community a better place for more people,” O’Donnell said.

If the IEDA board does not approve the application for state incentives, according to council documents, “the city agrees to work in good faith to provide comparable Tax Increment Financing (TIF) rebates in lieu of the tax exemption.”

“We’ve already had interest from others that have heard of a data center coming to Cedar Rapids,” O’Donnell said. “Progress begets more progress, so in terms of economic development, this is a tremendous signal that our city is moving in an exciting direction.”

‘Enhancing Iowa's economic landscape’

To attract the data centers that have invested billions in Iowa from tech companies including Google, Meta and Microsoft, state officials tout Iowa’s affordable and ample supply of wind energy, a stable grid, a high density of telecommunications infrastructure and low construction costs.

Iowa also is home to other large-scale data centers including Microsoft’s cloud cluster in West Des Moines, where the company is planning a sixth data center, the Register reported. And Meta’s campus in Altoona is slated to become its largest data center in the world by 2025 with more than 5 million square feet of space.

In a statement from Iowa lawmakers representing this part of Cedar Rapids, the area legislators said the project was “a testament to Cedar Rapids’ potential and dedication to fostering a forward-looking economy.” Affordable energy, a stable grid and a rich telecommunications infrastructure were key to Cedar Rapids being an attractive location for Google’s investment, the lawmakers said.

“This collaboration underscores a unified commitment to enhancing Iowa's economic landscape,” state Sen. Liz Bennett, D-Cedar Rapids, the ranking Democrat on the Senate Information Technology Committee, said in a statement. “The benefits of this project will resonate for generations, cementing Cedar Rapids' role as a leader in the new digital economy.”

State Rep. Jeff Cooling, D-Cedar Rapids, in a statement thanked Google for choosing Cedar Rapids and said “we eagerly anticipate the prosperity and innovation that this partnership will bring to our great city.”

State Rep. Sami Scheetz, D-Cedar Rapids, called this “the cusp of a new era for Cedar Rapids.” He said the data center “will bring long-term job opportunities, enhance our tax base and further our position as a hub for technological innovation.”

Comments: (319) 398-8494; marissa.payne@thegazette.com