Google revealed as company planning $576 million data center project in Cedar Rapids

Google has been identified as the company developing a monumental data center project in southwest Cedar Rapids – a project that, with a minimum investment of $576 million, will likely become the largest economic development project in the city’s history. Previously, the project had only been identified as being developed by Heaviside LLC, but an agenda for the Iowa Economic Development Authority board meeting, set to begin at 9 a.m. Friday, now lists the technology behemoth “Google LLC” as the company that will own and operate the project. The IEDA board is set to consider awarding financial incentives to the project under Iowa’s High-Quality Jobs program. The incentives would comprise a 20-year, 70% tax exemption, subject to meeting employment thresholds and an approved high-quality jobs application. The project would also include the addition of at least 31 full-time employment positions, all at or above the high-quality wage rate, which was $24.20 per hour in Linn County as of 2022. Under the development agreement submitted to the city of Cedar Rapids, 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 – a project that would subsequently be owned and operated by Google. Construction of the project is expected to begin within three years of the effective date of a final development agreement. The project would comprise the first development in the Big Cedar Industrial Center, Iowa’s largest industrial site at 1,391 acres, which includes an 890-acre parcel designated as the state’s only certified Mega-Site. As proposed, the project would qualify for economic incentives under the city’s Local Match Economic Development Program, which authorizes city sponsorship of Google’s application for state financial incentives. Under the agreement, if the high-quality jobs application is not approved, the city would agree to provide comparable Tax Increment Financing (TIF) rebates in lieu of the tax exemption. Cedar Rapids state legislative leaders announced their full support for the project in a news release Thursday. In the release, leaders said the project is not only a significant development milestone for Cedar Rapids, but also “a pivotal moment for the entire state of Iowa in demonstrating its readiness to support large-scale, tech-oriented investments.” "We stand at the cusp of a new era for Cedar Rapids," said state Rep. Sami Scheetz (D-Cedar Rapids). "This data center will bring long-term job opportunities, enhance our tax base, and further our position as a hub for technological innovation. We extend our gratitude to all stakeholders involved in this project for their relentless pursuit of excellence and progress that has made this partnership with Google possible." "This collaboration underscores a unified commitment to enhancing Iowa's economic landscape," added state Sen. Liz Bennett (D-Cedar Rapids), the ranking Democrat on the Senate Information Technology Committee. "The benefits of this project will resonate for generations, cementing Cedar Rapids' role as a leader in the new digital economy." The Cedar Rapids data center development agreement would include a number of financial incentives, including:

• A 20-year, 75% economic development rebate of franchise fees collected by the city through the electrical provider for each data center constructed.
• A Gray Water Discharge Credit, under which the city would provide a monthly credit of $1.30 per hundred cubic feet of gray wastewater discharge, with a per-unit credit that would escalate annually at 2.5%, up to a maximum of 57% per unit sewer discharge rate.

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 Google 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. Cedar Rapids City Council members have hailed the project as a key economic milestone in the city’s legacy. “We have never done a development like this,” council member Dale Todd said at the council’s Feb. 27 meeting. “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.” At the same meeting, Mayor Tiffany O’Donnell pointed to the “years of work and effort” that’s brought the Cedar Rapids data center development to this point. “You hear me often say that cities are forever,” Ms. O’Donnell said. “And when you look at the timeline of Cedar Rapids, this will be its own bullet point on that timeline in terms of next-level development. Council member (Tyler) Olson mentioned being able to pay for improvements, pay for our future water, and this is how we do that. This is how a city scales. As we look at tightening budgets and lessening funding sources, this is a tremendous opportunity for the city. A move like this is strategic. We can talk about the X’s and O’s on paper as we see them today. We can talk about going from A to B, B to C today, but this conversation is really about A to Z. In 20 years – wow, what a lucky council.”