Planning for second Cedar Rapids data center campus progresses

CEDAR RAPIDS — Progress toward construction of a $750 million data center campus continued this week as the Cedar Rapids City Council held public hearings for two proposed urban renewal areas at the site along 76th Avenue SW.

In September, the council approved a term sheet that proposed a development agreement with SNA LLC. The agreement outlined plans for construction of two or more data center buildings on 560 acres in the Big Cedar Industrial Center that would create at least 30 high-paying jobs.

At the time, SNA LLC — a Delaware limited liability company — was the only entity named, and it was unclear who would operate the data center. A similarly named company had been connected with QTS Data Centers, a Kansas-based company that operates data centers in the U.S. and the Netherlands.

QTS is the second company to propose a data center campus in the Big Cedar Industrial Center. Earlier this year, Google proposed building a $576 million data center on land owned by Alliant Energy.

Cedar Rapids assessor records show QTS Cedar Rapids I LLC closed on the purchase of 615 acres in the Big Cedar Industrial Center on Oct. 18. The company paid $25.6 million for the land, which was owned by Iowa Land and Building, a subsidiary of Alliant Energy. Assessor records listed the land value at $1.5 million.

There were no comments during the city council’s public hearing Tuesday for the Big Cedar East and Big Cedar West sites. The council agenda called for first readings of ordinances regarding the collection of property taxes on the data center development, but those readings were pulled from the agenda.

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Scott Mather, the city’s economic development coordinator, told The Gazette city officials will work on fine-tuning the documents before they go back to the city council in December or January. The ordinances relate to collection of tax increments (TIF) on the Big Cedar properties.

Mather said current estimates project the data center development’s property taxes over 20 years may total $1 billion, of which an estimated $529 million would be rebated to the developer over that time.

The QTS project would be the largest development in Cedar Rapids history. It would create a minimum of 30 new full-time jobs that pay at or above the high-quality wage rate, which is between $26.20 and increases to at least $31.44 per hour.

In May, Heaviside LLC, the development entity behind the Google data center, closed on 414 acres of land in Big Cedar.

The Iowa Economic Development Authority board has approved the city’s plan to grant $56 million in tax breaks to Google’s $576 million data center through a 20-year, 70 percent tax exemption for the project.

Combined, the QTS and Google data centers would take up most of the development-ready land in the Big Cedar Industrial Center, which is 1,391 acres.

Tom Barton of The Gazette contributed to this report.