Microsoft’s latest datacenter project started with $6 million in land

Microsoft’s latest datacenter project started with $6 million in land

Summary: Microsoft's latest data center project looks like a solid win for the community.

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TOPICS: Data Centers
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Microsoft’s $1.1 billion investment in West Des Moines, Iowa was a decision made with a lot of the same incentive types we hear about with other major datacenter projects: government incentives, tax rebates, and the usual economic add-ons that are part of the decision process for where to put your new datacenter.

But for a change, there is quite a bit of information available about this deal. To start, the city of West Des Moines put up $87 million in incentives, which was apparently done with the approval of the local community. With a population of around 60,000, this isn’t the sort of rural area that we often hear about as a prime site for a large datacenter, and the monies promised by the local municipality will be going into infrastructure improvements which will benefit not only Microsoft, but the local community as well.

Microsoft also bought 100 acres of land for roughly $6 million, which will provide property taxes at the current rates. The state also provided a sales tax rebate in excess of $20 million, in effect until the year 2021.

In return for these considerations, and in addition to whatever normal state and local taxes will need to be paid, Microsoft is required to create no fewer than 84 jobs in the completed facility, of which 66 must have a minimum wage of $24.32 an hour. They also will be creating at least $255 million in taxable value with the project, which will add roughly $8 million annually to the local community’s tax coffers.

While I’m not generally in favor of handing out money to corporations to draw in businesses as self-contained as datacenters, it certainly seems like West Des Moines and the state of Iowa are getting decent value for their spending to attract this datacenter project.

Topic: Data Centers

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5 comments
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  • I think it should banned at the federal level

    I think incentives should be banned at the federal level. Governments really shouldn't be competitive, but if your city doesn't do it, it will lose out to the ones that do. Block that for all states creates a level playing field.
    Buster Friendly
  • Necessary to level playing field

    Sometimes these things are necessary to bring businesses to smaller areas that don't have the infrastructure. They can never be competitive without the infrastructure, but without the businesses there to generate the tax revenues, they don't have the money to do improvements. If these types of things are outlawed, you would basically put in place a permanent advantage for the "older" areas of the country - permanently disadvantaging other areas.
    Harlon Katz
    • I think it's the reverse

      The richer areas can have bigger handouts which disadvantages more rural areas.
      Buster Friendly
  • Not in Nebraska or Wyoming.

    I understand the perspective, but Nebraska and Wyoming are hardly the rich areas of the country. They are getting some big business through various incentives. Datacenters, power plants, manufacturing.

    States in the south have attracted new business the same way. It's not a magic bullet to fix all the economic problems of the country, but it does seem to be having some benefit in small doses.
    tojamismis
  • Iowa land

    60,000.oo per acre in rural Iowa? Somebody got reamed again.
    lbshultz