Cedar Rapids City Council OKs amended QTS development agreement

CEDAR RAPIDS — Anticipated investment into a large-scale data center campus in southwest Cedar Rapids has grown to $1.75 billion, per recent communications between the city and data center developer QTS.

The Cedar Rapids City Council on Tuesday unanimously approved an amended development agreement with QTS outlining plans for up to seven project phases — up from the “two or more” outlined in the original agreement.

Cedar Rapids Economic Development Project Coordinator Scott Mather told council members that the amended agreement was drafted to better align with QTS’s organizational structure as it relates to building ownership.

“Each building will have its own property owner, and so as such, they needed to be added to the agreement,” Mather said.

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The minimum required investment remains at $750 million under the amended plan, although Mather said realized investment is expected to be closer to $1.75 billion — if not more.

Each of the project’s phases calls for a minimum 300,000-square-foot data center to be built at the QTS campus currently under construction in southwest Cedar Rapids at the Big Cedar Industrial Center. Investment in each phase is estimated at $250 million.

Per the agreement, each phase will result in the creation of at least 15 jobs at or above the high-quality jobs threshold. If all seven phases are realized, that would equal at least 105 permanent positions — in addition to the more than 1,200 construction jobs created by the project.

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QTS also will contribute up to $18 million to a city-run “community betterment fund” over 20 years to support future economic development in Cedar Rapids, as was outlined in the previously approved development agreement.

City financial incentives also remain the same under the amended agreement, under which QTS will receive a 20-year, 70 percent property tax rebate per project phase and a 20-year, 75 percent rebate of electrical franchise fees collected by the city through Alliant Energy.

Data centers are large facilities that house computer servers, data storage and other technical equipment. Need for such centers has risen alongside the growing popularity of artificial intelligence and cloud computing.

The QTS project is one of two data center campuses currently under construction at the Big Cedar Industrial center, where tech giant Google is constructing its own $576 million campus.

Construction began on both projects earlier this year and will continue throughout the next several years.

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