City must be prudent with tax incentives for new development

Before Cedar Rapids offers tax incentives to a company to build a data center, I would like more information about what they are bringing to Cedar Rapids (beside construction of the building) and what they are taking from Cedar Rapids. The Gazette article listed a $576M investment, but it only creates 31 jobs. After the initial construction work, what will the facility require of the city? A 20 year tax exemption for 31 jobs seems like a lot.

BAE invested $139M in a new facility that created or saved 800 employees. I am guessing they are not requiring any more from the city than most manufacturing facilities.

The data center, on the other hand, could require tremendous amounts of water to cool the computers. Because the company that will occupy the center is unknown, it could be a Bitcoin processing center which actually creates very little, but consumes a city’s worth of water daily. According to an article in the Wall Street Journal, “Bitcoin mining used more water than New York City last year.” In a state experiencing drought, too much water usage doesn’t sound like a good thing.

I would hope that the city is very careful about giving tax incentives until they know that this investment is a positive for the city in every way, not just a construction project. I am guessing that the $576 investment is largely for the computing power for the data center, not the building.

Patricia Lahr

Cedar Rapids