Details announced for Microsoft data center in West Des Moines; will be largest in the country
KENT DARR Jul 22, 2016 | 8:11 pm
3 min read time
802 wordsAll Latest News, Real Estate and Development
Microsoft Corp. will receive nearly $5 million in tax refunds for the first phase of a regional data center in West Des Moines, where city officials say the project will open up 5,000 acres to future development of residential, industrial and commercial properties.
This will be Microsoft’s third data center in West Des Moines, and though its development has been long anticipated, its delivery date has been moved up. Why? Because the company’s multifaceted cloud services operation is running out of storage space at its site on the north side of Iowa Highway 5.
The project, once all phases are completed, could generate up to 150 jobs. Its economic impact will spread through Warren and Madison counties, West Des Moines, Cumming and Norwalk.
Microsoft was approved for $4.7 million in refunds on sales, use and service taxes paid on construction costs for the nearly $418 million first phase of the four-phase development, which is called Project Osmium, on 200 acres of land west of Interstate 35 and south of what is called Adams Street in Warren County and 105th Street in Madison County. That gravel road runs just south of Dale Maffitt Reservoir. Project Osmium will take up 160 acres in Warren County and 40 acres in Madison County.
It is anticipated that Microsoft will obtain more land for the entire project, which will include buildings of 256,000 square feet to 583,000 square feet. Microsoft plans its first multistory, or “double-stacked,” data centers. The total project is expected to cost $1.5 billion to $2 billion and occupy 1.7 million square feet of building space. All phases could be completed by 2022.
This will be Microsoft’s largest data center in the United States, West Des Moines Mayor Steve Gaer said during a press conference.
Including Project Osmium, Microsoft will have invested $3.5 billion in three data center sites in West Des Moines. The first, Project Mountain along South 88th Street, went under construction in 2010. The second, Project Alluvion along Iowa Highway 5 and near Veterans Parkway, was launched in 2014 and is expected to be completed by 2021.
Including today’s award, the state of Iowa has provided nearly $41 million in tax credits for the Microsoft projects.
According to information supplied to the Iowa Economic Development Authority board, the project includes $12.5 million in land acquisition costs. Building sizes for all four phases will range from 256,000 square feet to 583,000 square feet.
For phase 1, Microsoft also anticipates spending $68 million on site development, $219 million on construction and $118 million on machinery and equipment. The first phase is expected to generate 57 jobs, with 11 of those jobs paying at least $27.92 an hour.
West Des Moines plans $65 million in infrastructure improvements based on tax increment finance funds that will be generated by a property tax assessment of up to $307 million on the entire project.
The city is in the process of annexing land for the data center. It also plans to create the Osmium Urban Renewal Area and will create a TIF district within that area to collect property taxes from Microsoft. The TIF funds must be spent on projects within the urban renewal area.
One of those projects is the extension of Veterans Parkway from Maffitt Lake Road south and west through future development ground that today has limited access. An estimated six miles of roadway will eventually turn north, connect with Grand Prairie Parkway and cross the Raccoon River on what is frequently referred to as the Knapp Bridge, before ending at Raccoon River Road. Eventually, Grand Prairie Parkway will connect with Interstate 80. The bridge will cross the river on land that is owned by a partnership of Knapp Properties Inc. and businessman Jim Cownie.
The project moves up development of Veterans Parkway an estimated 20 to 30 years. It has appeared on future planning maps of the Metropolitan Planning Organization, but the costs of its construction have been tied to development. It will cut through land controlled in large part by land brokers and developers, including Knapp Properties, Colby Interests and Lemar Koethe.
The city of West Des Moines plans additional street improvements and realignments. Sewer, water, fiber optic and other utilities must be extended to the Project Osmium site.
West Des Moines Community Development Director Clyde Evans, who has been at the center of negotiations with Microsoft officials, said plans are to complete Veterans Parkway by late 2018 or early 2019. Microsoft wants to start construction on the first data center in spring 2017.
After the IEDA board meeting this morning, Gov. Terry Branstad joined officials from West Des Moines and Madison and Warren counties, as well as economic development representatives from the Greater Des Moines Partnership and Warren and Madison counties in ballyhooing the project and its impact on the area.
Trending News
