Microsoft to invest $1.1 billion in new Iowa data center

Is this data center heaven? No, it’s Iowa.

Iowa’s emergence as a major data center hub took another large step forward last week when Microsoft announced it would invest $1.1 billion to build a new facility in West Des Moines over the next half decade.

The investment comes on the heels of a $900 million data center Microsoft completed in Iowa in 2010 and joins data center projects from Google and Facebook in the states.

“The efforts that we put in developing a relationship with Microsoft has really led to today’s announcement and the significant investment in our community in central Iowa and in our state,” said Clyde Evans, West Des Moines’ director of community and economic development.

The new data center will be built on approximately 2,000 to 3,000 acres and include a number of infrastructure upgrades, including improvements to nearby roads and water lines.

About $20 million in incentives through the state’s High Quality Jobs program, which give tax credits to eligible businesses to offset building costs, has been provided to assist Microsoft carry out the project.

“We look at this as a partnership where the state does provide assistance, but we also see significant benefit not only to the taxpayers here, in the school districts and the county and the city, but also to the people of Iowa in terms of the quality of jobs and the other economic opportunities it opens up,” said Iowa Gov. Terry Branstad.

The new Microsoft center is expected to generate $8 million in property taxes each year for the city while creating 80 jobs, all of which are expected to be high paying.

Iowa has become a data center hub for a number of reasons, but perhaps the main one is its location on top of some major transcontinental fiber routes, along with low electricity rates.

The state also has a burgeoning wind energy utility, led by MidAmerican Energy, which has made Iowa one of the largest wind power generators in the country.