Congratulations on Cedar Rapids’ recently announced “historic” project that will include a minimum $576 million investment for a data center project on the city’s southwest side.
This is an enormous economic development coup — the largest capital expenditure project ever for Cedar Rapids, a community that has had a string of significant economic projects over the past several years, including BAE Systems and FedEx, according to city officials. It also ranks as one of the top five largest capital projects in the state of Iowa over the past 20 years.
“We have never done a development like this,” Council Member Dale Todd said in a CBJ article. “I would suggest that you could take 30 years’ worth of development agreements and it still wouldn’t add up to what we’re doing here. So it’s a historic moment for (city manager) Jeff (Pomeranz) and your team.”
Under the development agreement, Heaviside LLC plans to develop “one or more” data centers in the Big Cedar Industrial Center, near the intersection of 76th Avenue and Edgewood Road SW.
While Heaviside LLC is listed as the project’s developer, there’s currently no indication of who would own or operate the Cedar Rapids data centers.
Construction of the project is expected to begin within three years of the effective date of the development agreement.
A number of data centers have come to Iowa in recent years, developed by large-scale e-commerce and technology companies such as Google, Meta, Microsoft and Amazon.
Officials also noted that the Cedar Rapids data center development, with its potential for heavy use of utilities, could lead to an overall lowering of local water and electrical rates, and that the project would become a significant contributor to the Cedar Rapids property tax base.
The city and the developer would also agree to create a community betterment fund, under which the company would provide annual community betterment payments to the city “to increase economic development activities, including growth of amenities and infrastructure.” The company would make annual payments of $400,000 per data center for a period of 15 years, with a maximum of $6 million per data center and a $36 million total maximum.
And the agreement would incorporate a number of off-site improvements, under which the company would provide necessary easements to serve the development site, including the extension of utilities. The developer would also cooperate with the city on any potential Revitalize Iowa’s Sound Economy (RISE) Grant, if the city were eligible and applied for the program.
There is a hesitation on some communities competing for data center projects due to relatively few permanent full-time jobs.
We think that concern is overblown. The amount of investment with construction is massive, and the number of new jobs is adequate with at least 31 full-time employment positions, all at or above the high-quality wage rate. Furthermore, data and artificial intelligence is what the future will look like. We won’t be surprised if this company behind this project is actually one of the tech giants.
Being able to land important projects like this one is perfect for Cedar Rapids and the region, and we commend Cedar Rapids officials for making it happen.
Bravo.
