UPDATE: IEDA Board approves assistance for Davenport data center

Leaders celebrate key step in effort to attract Meta Platforms project

Davenport leaders are celebrating Iowa Economic Development Authority (IEDA) Board approval of a High-Quality Jobs application for a proposed data center in that city that would represent an $800 million investment for the state.

According to a Friday, May 17, IEDA news release Meta will build a new data center in north Davenport. Vemerald, a wholly owned subsidiary of Meta Platforms, Inc., will store and transfer user and customer data for their operating systems.

“This moves the proposed project further along in their due diligence, with the company expected to make a decision later this year,” Bruce Berger, Davenport’s director of community and economic development, told the QCBJ in an email Friday. “If selected, construction could begin in 2025 and expand opportunities for jobs for Davenport and Quad City residents.”

At its meeting that day, the IEDA board granted the City of Davenport the ability to utilize the High Quality Jobs (HQJ) program provision for value-added property tax exemption for this project. The project represents an $800 million capital investment and is expected to create 35 jobs incented at a qualifying wage of $28.76 per hour. 

The Davenport City Council endorsed the property tax exemption incentive for the project at its Wednesday, May 8, meeting. 

The IEDA release said the company plans to construct a data center, which will include office space, servers and support equipment. 

The proposed project would be located on 328 acres near Hillandale Road and Enterprise Way in north Davenport, according to the city. 

Annual impact $78.6M

Mr. Berger previously told the QCBJ that the construction project alone would generate an economic impact of more than $1 billion in the region, and operationally, an annual economic impact of $78.6 million is projected. 

Before Friday’s announcement, the project was known as The Data Center Project with Vemerald identified as the developer. The Davenport site, city documents showed, is part of an ongoing national and Midwest site selection process being conducted by Vemerald, LLC. 

According to those documents, the project would feature construction of two data halls and ancillary buildings totaling 715,000 square feet. The buildings on the data center campus would be used for the remote storage, processing, and distribution of large amounts of data.

Through the Iowa HQJ program, communities are allowed to incentivize business development by providing a property tax exemption to qualifying businesses. Projects must have a minimum investment of at least $10 million and create at least 31 jobs that meet or exceed county wage rates and benefits. 

Iowa’s High Quality Jobs Program allows communities to incentivize business development by providing a property tax exemption to qualifying businesses that have a minimum investment of at least $10 million and create at least 31 jobs that meet/exceed county wage rates and benefits.

The proposed Iowa data center would significantly exceed those minimum requirements. In addition, the economic payoff from the city’s investment in the project would be significant, according to data from the IEDA and an analysis completed by Bi-State Regional Commission.

Construction impact $1B

The new data center also would bring the estimated assessed value of the proposed location – which now stands at $958,000 – to $420 million. In addition, under this plan, the City of Davenport would benefit from retaining the remaining 40% of property taxes on the completed facility.

For example, it’s expected to generate $5.3 million each year in property taxes for Davenport and a total of $107 million over 20 years. Broken down further, the annual estimated property tax generated that will go to local taxing districts would include $2.5 million for the city, $900,000 for Scott County and $1.7 million for Davenport schools.

If the Davenport site is selected and built, it will join about a dozen data centers operating in Iowa by companies including Lumen, DC Mining, Good and Meta. Others may be in the works.

Recently, for example, Google was identified as the company developing a $576 million monumental data center project in southwest Cedar Rapids. It’s likely to become the largest economic development project in that city’s history.

Closer to home in the Quad Cities, if a new Davenport center is built it will join Davenport’s existing Bluebird Data Centers, according to Datacenters.com.

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