South Des Moines farmland could be in line for data center development. What to know:

South Des Moines farmland could be in line for data center development. What to know:

  • 17.03.2025 11:49
  • eu.usatoday.com
  • Keywords: NoCompanies, NoImpact

A multi-billion-dollar data center project is proposed for Des Moines' south side, with Cielo Digital planning seven buildings on farmland. The development could attract smaller tech companies as interest in Iowa and Nebraska grows, following investments by major tech firms nearby.

Microsoft Reports

Context

Analysis of Multi-Billion-Dollar Data Center Project in Des Moines

Key Facts and Figures

  • Proposed Project: Cielo Digital has proposed a 500-megawatt data center project on Des Moines' south side, north of the U.S. 69 and U.S. 65 interchange with Highway 5.
  • Scale: The project would consist of seven buildings, each spanning 333,000 square feet, totaling nearly 2 million square feet.
  • Power Usage: Each building is expected to use 72 megawatts of power at peak load.
  • Cost Estimate: Joe Davis, a JLL data center broker, estimates the project could cost $2 billion to $3 billion and take at least four years to become fully operational.

Market Trends

  • Data Center Growth in Iowa/Nebraska: A recent report from JLL predicts that over 1,000 acres may be acquired for data center development in Iowa and Nebraska over the next 12 to 18 months.
  • Increased Interest: The report highlights a "recent increase in interest" in Des Moines, Cedar Rapids, and Omaha, driven by smaller tech companies following the lead of major firms like Google, Amazon, Apple, Meta, and Microsoft.

Competitive Dynamics

  • Existing Players: Major tech companies already have a presence in Iowa:
    • Microsoft in West Des Moines
    • Facebook (Meta) in Altoona
    • Apple in Waukee
  • New Entrants: Smaller tech companies are showing interest in data center development, potentially leveraging the infrastructure prepared by firms like Cielo Digital.

Strategic Considerations

  • Prepared Sites: Cielo Digital often prepares sites for future development without a specific user lined up. For example:
    • In Culpepper County, Virginia, EdgeCore paid $18.8 million for a site that could host a $2 billion data center installation.
  • Utility Infrastructure: Utilities like MidAmerican Energy and Alliant Energy may face delays in connecting new sites due to high power demand, potentially causing project timeline extensions.

Economic Impact

  • Job Creation: Data center projects typically create numerous jobs during construction and operation.
  • Economic Growth: The influx of investment could stimulate local economies, with smaller tech companies following larger firms.

Regulatory and Long-Term Implications

  • Regulatory Challenges: Potential delays in utility connections may require regulatory adjustments to accommodate the growing demand for power.
  • Long-Term Effects: The development could lead to significant changes in land use, infrastructure, and economic activity in Des Moines and surrounding areas.

This analysis highlights the potential transformation of Des Moines' landscape due to data center development, driven by both major tech companies and smaller firms. The region's strategic location, available farmland, and growing interest from investors position it as a key player in the Midwest's tech infrastructure.