MONEY

Updated: State approves incentives for $1.1 billion Microsoft data center in West Des Moines

Matthew Patane
mpatane@dmreg.com
Microsoft Corp.'s current data center in West Des Moines at South 88th Street and Booneville Road. With Project Alluvion, the company's investment in West Des Moines would grow to just under $2 billion.
  • Four-phase data center project
  • %241.126 billion cost
  • 84 jobs
  • More than 1.2 million square feet on 154 acres

Microsoft will build a $1.1 billion data center in southeast West Des Moines that will be one of the company's largest centers in the U.S., according to plans unveiled today.

Iowa's economic development board approved incentives for the data center today and officially unveiled Microsoft as the company behind "Project Alluvion" -- the project's codename.

Combined with Microsoft's current data center in the city, the Alluvion project would bring the company's total investment in West Des Moines to just under $2 billion.

The Redmond, Wash.-based company plans to take up 154 acres in West Des Moines' southeast corner. Microsoft has been in negotiations to purchase the southern portion of Willow Creek Golf Course, as well as three other plots of land.

Under the deal, the golf course would lose its lower nine holes, but city officials said Willow Creek is looking to expand elsewhere to make up for the lost land.

In total, Microsoft has plans to construct a 1.16 million-square-foot data center. For comparison, that is about the size of 20 football fields.

The buildings will locate on 154 acres of land west of Highway 28 between Pine Avenue and Highway 5 in West Des Moines, city officials told the Register.

Those land negotiations had put the project on hold, as the owner of Willow Creek looked to acquire the other plots of land before selling them to Microsoft.

Project Alluvion was originally scheduled to come before the state board in March, but the project's request was postponed since a property agreement could not be finalized.

During its meeting Friday, the Iowa Economic Development Authority Board approved granting Microsoft a $20.3 million sales tax rebate for the project. That tax rebate would be available until 2021.

Those state incentives come on top of the $18 million in incentives already promised by West Des Moines.

To receive those incentives, Microsoft has promised to add at least $255 million at minimum in taxable value to the city of West Des Moines.

That minimum value, West Des Moines officials said, would translate to about $8 million annually in property taxes the city would collect from Microsoft once the data center is fully built out.

"This is a staggering amount of property tax dollars," West Des Moines Mayor Steve Gaer told the Register.

From the state level, Microsoft has to create 84 jobs by full build out, 66 of which must have a wage of $24.32 an hour. That wage is 120 percent of Polk County's qualifying wage threshold.

At a news conference later today, West Des Moines officials and Gov. Terry Branstad will discuss a "major economic development project." The announcement will take place in the City Council Chambers at West Des Moines City Hall, 4200 Mills Civic Parkway at 11:30 a.m.

Register reporter Timothy Meinch contributed to this report.