Council approves urban renewal area, development agreement to clear way for data center projects at Big Cedar Industrial Park

The Cedar Rapids City Council on Jan. 28 approved measures to pave the way for two data‑center projects in the Big Cedar Industrial Park, voting to establish an urban renewal area tied to a proposed Google development and to approve a development agreement with QTS Cedar Rapids 1 LLC for a separate data‑center campus.

The measures set long multi‑phase construction schedules and incentive packages meant to attract the projects. City staff and the city manager described the projects as major investments that will bring significant construction activity and, over time, some permanent high‑paying technology jobs and recurring tax revenue once incentive periods end.

Why it matters: The council approved tax‑increment financing and a development agreement for projects city staff said could total in the hundreds of millions of dollars of private investment in Cedar Rapids. Supporters said the projects would create sustained construction work and position the city to attract additional technology firms; a resident who spoke at the hearing urged the council to keep citizens informed and questioned the cost per job.

Scott Mather of the City Manager’s Office told the council the item for Google began with a December consultation with affected taxing entities and included a first reading of a TIF ordinance; city staff said a second and third reading are scheduled for Feb. 11. At the public hearing resident Myrna Lorline said she had reviewed coverage and said she was “concerned about what I see as a very expensive cost per job,” citing her back‑of‑the‑envelope calculation about the project’s long‑term value and the limited number of direct, long‑term jobs projected in early phases.

City Manager Jeff Pomerantz and economic development staff described both projects as multi‑phase facilities that begin with relatively small operations but generate large numbers of construction jobs and ancillary economic activity. Pomerantz said the QTS project will have multiple phases, that the first phase and follow‑on phases each have jobs “at or above the high quality jobs threshold,” and that each data‑center phase is expected to produce roughly 500 construction jobs over time.

Details in the development agreement and staff presentation for QTS included: - Capital investment estimate: staff described the QTS agreement as a $750,000,000 capital investment (presentation materials used that figure as a baseline). - Phasing and schedule: phase 1 to begin within three years of the agreement effective date and complete within six years of commencement; subsequent phases follow on multi‑year schedules with additional phases allowed up to a 25‑year window. - Employment: the agreement requires a minimum of 15 permanent data‑center jobs per phase (30 jobs for the initial two phases) and anticipates at least 500 construction jobs per data center during build‑out. - Financial incentives: staff described a 20‑year 70% property‑tax rebate per project phase and a 20‑year 75% rebate of city franchise fees (electric provider franchise) used for economic development. Estimated property tax generation over rebate periods was discussed in staff materials, with a portion rebated back to the company during the incentive term. - Community betterment fund: QTS would make annual payments of $300,000 per project phase for 20 years (maximum $6,000,000 per phase; $18,000,000 total across phases) to support local nonprofits, public safety equipment and community amenities, according to staff statements.

During the Google urban‑renewal public hearing resident Lorline said she had reviewed reporting and financial projections and asked that the council “do everything you can to keep citizens informed” because she questioned the project’s near‑term return metrics. Councilmembers and staff repeatedly addressed utilities, saying Alliant Energy and other partners had indicated capacity and that utility regulatory frameworks would not cause immediate rate increases for existing customers, statements city staff said came from communications with Alliant leadership.

Council action: The council adopted a resolution to establish the Google urban renewal area and approved the TIF ordinance on first reading. Council member Poe moved the resolution; Council member Van Orny seconded and the motion carried. The ordinance’s first reading was moved by Council member Scott Olson and seconded by Council member Todd and passed on first reading; staff said second and third readings will be Feb. 11. For the QTS development agreement the council adopted the resolution approving the agreement; the motion was moved by Council member Poe and seconded by Council member Overland.

What they did not decide: Councilmembers and staff emphasized that employment at full build‑out would be phased and that many economic benefits are indirect — for example, construction employment and potential supplier activity — rather than large immediate new payrolls inside the data‑center buildings. Several citizen speakers asked for continued public information as the projects move forward.

The council’s approvals authorize staff to continue with the statutory and contractual steps needed to finalize tax‑increment financing and the development agreement; final engineering, subsequent phases, and later readings of ordinances remain subject to further council action.

Votes at a glance: - Resolution approving establishment of the Google urban renewal area and related TIF actions: moved by Council member Poe; seconded by Council member Van Orny; outcome: adopted. (First reading of related ordinance approved; second/third readings scheduled Feb. 11.) - Resolution approving the development agreement with QTS Cedar Rapids 1 LLC for a data‑center campus in Big Cedar Industrial Park: moved by Council member Poe; seconded by Council member Overland; outcome: adopted.

Ending: City staff said they will continue public outreach and provide additional details as design, utility agreements and formal ordinances are finalized. Council members urged staff to keep residents informed as tax‑increment and utility agreements move forward.