Microsoft Announces $1.1 Billion Data Center in West Des Moines

Apr 18, 2014

It's official: Microsoft is behind the 1.2-million square-foot data center coming to West Des Moines. 

Officials announced Friday that Microsoft will build a four-phase, regional data center costing a total of $1,126,218,400. Formerly known as Project Alluvion, the 154-acre site will house servers and computer equipment to operate web portal services like the Cloud and XBox Live. Completion is expected in early 2021.

West Des Moines mayor Steve Gaer says the 154-acre site will require infrastructure improvements such as widened roads, fiber optic cables, and a water storage facility—for an estimated $53.4 million in total. Gaer says although West Des Moines has approved $22 million in tax credits for the company, Microsoft will still pay some property tax for the site as they begin construction.

"That guarantees us now, that we’re going to get enough money from them from their taxes, in order to pay off the bonds that we’re going to sell to build the infrastructure," Gaer said. "That way we don’t put the West Des Moines taxpayers… we don’t expose them to that cost.  

Gaer said he hopes the infrastructure West Des Moines builds entices other technology-related businesses to come to the area, as well as companies that provide equipment for data centers. 

One big-ticket item will be a water storage facility to help supply the site's water-cooling systems. Bill Stowe of Des Moines Water Works says data farms rely on large amounts of water when temperatures rise, often coinciding with times the rest of the city is also using more water. At 90 degrees Fahrenheit, water usage spikes to millions of gallons a day. 

"They’re either an extraordinarily demanding water consumer or an almost nonexistent water consumer," Stowe said.

Friday morning the Iowa Economic Development Authority approved $20,256,000 in sales tax rebates for the project through the High Quality Jobs Program. The application submitted by Microsoft to the IEDA says the new data center will create 84 jobs, in addition to construction-related employment. 

This is Microsoft's second data-center in Des Moines, bringing the company's total investments to nearly $2 billion.