Cedar Rapids, Iowa Gets Approval for Two Major Data Center Investments by Google and QTS
The recent approval of Google and QTS Data Centers' projects in Cedar Rapids, Iowa marks a transformative moment for the city's economy and technological infrastructure. With a combined investment of over $1.3 billion, these projects will generate jobs, attract further investment, and establish Cedar Rapids as a major player in the data center industry.
While there are concerns about energy consumption and environmental impact, both companies have demonstrated a commitment to sustainability and community support. As these projects progress, Cedar Rapids is poised to become one of the Midwest’s leading digital infrastructure hubs.
Google and QTS
According to the press release announcing the most recent QTS project, the 612-acre data center campus development is the largest economic investment in the city’s history. The Google data center campus investment has been reported as an estimate of $576 million while the QTS investment is reported as “more than” $750 million.
Both companies are expected to build multiple data centers on the site, in no fewer than two projected stages. Both data center projects were discussed in the fourth quarter of 2024, but the approval for the projects was only granted by the Cedar Rapids City Council at the end of January 2025.
Big Cedar Industrial Center
Google and QTS are both building their new data centers in the Big Cedar Industrial Park, a 1391 acre space in southwest Cedar Rapids. The two projects are being built right next to each other. Both projects were approved at the end of January 2025 and expected to be operational in 2026.
Google and QTS Data Centers have chosen Cedar Rapids due to several strategic advantages:
- Infrastructure: The Big Cedar Industrial Center offers ready-to-develop land with established utility connections.
- Energy: The region is well-supported by Alliant Energy, which can provide reliable power with potential renewable energy integration. Alliant is the owner of the Big Cedar Industrial Center.
- Tax Incentives & Business Climate: Iowa offers competitive tax incentives for technology investments, making it an attractive destination for large-scale data centers.
- Proximity: Cedar Rapids’ location provides access to key business centers in Chicago, Minneapolis, and Omaha, making it a prime spot for cloud and digital infrastructure.
- Workforce & Education: The city has a strong talent pool, with nearby universities supplying skilled professionals in IT and engineering.
The QTS development agreement includes the company contributing up to $18 million over 20 years to the City of Cedar Rapids-owned “Community Betterment Fund." The contributions would start with the completion of the first phase of the data center.
Mayuri Farlinger, President of Alliant Energy’s Iowa energy company and Vice President of Energy Delivery, quoted on the company’s involvement in the data center development, said:
As a trusted energy partner, we are committed to providing cost-effective power to fuel their operations, while also fostering economic growth for the communities we serve. This stands as a testament to the region as a hub for innovation and investment. We look forward to working together to ensure their long-term success.
To mitigate environmental issues, the QTS data center is expected to use water-free cooling technologies as well as a continued focus on their sustainability efforts which include carbon-free energy sourcing, materials recycling, and a focus on operational efficiency to reduce greenhouse gases emissions. Portfolio wide, QTS has a corporate mandate to reduce their water usage by 5% annually.
Financial Incentives
According to reports on the agreement proposed last month, the QTS Cedar Rapids data center project will include multiple incentives. A 20 year, 75% rebate will be provided on the franchise fees that are collected by Alliant energy along with tax increment financing rebates.
The city has also agreed to extend utilityies to the construction sites. Though the developers will need to connect water and sewer to their buildings, and to make necessary road improvements to support traffic to the sites.
Making the presumption that the city conservatively estimates the potential property tax revenue collected at over $1 billion over the life of the project, the rebates could add up to $529 million. There will be 20 annual rebate payments, per development phase, at 70% of the tax increment created.
The development agreement with QTS requires the investment of no less than $750 million, a two phase construction process that must begin within three years and complete within six, and the creation of now fewer than 15 jobs per development phase (not construction jobs).
Significant employment considerations are also in place, with the construction of the data centers likely requiring thousands of jobs during the construction phase, though operational data centers are only expected to provide 30 jobs per data center.
The development agreement with QTS requires at least 15 jobs per data center. When talking about the city attracting additional tech development as it establishes itself as a hub for data center and technology deployment, Cedar Rapids Mayor Tiffany O'Donnell was quoted as saying:
Building these facilities is going to take time, and maintaining those buildings over the next 20 years will also provide consistent, stable work." and "One project begets another project, begets another.
Mayor O'Donnell also said that she expected there to be no fewer than 100 to 200 jobs added to the local economy when the development was complete. Cedar Rapids City Manager Jeff Pomeranz was clear on his thoughts on the value of these data center projects, adding:
Someone spends almost a billion dollars in your city — and we have two of these projects — that means that something’s going on in Cedar Rapids that’s getting the attention of the world.
Cedar Rapids: A Growing Data Center Hub in the Heartland
Leading up to the mega-investments by QTS and Google, Cedar Rapids has quietly emerged as a compelling location for data center investment, leveraging its strategic Midwest positioning, resilient infrastructure, and business-friendly environment. While much of the national attention has focused on hyperscale players, other operators and enterprises are making moves in the region, capitalizing on Iowa’s affordable power, strong fiber connectivity, and low risk of natural disasters.
Enterprise and Colocation Growth
Several regional enterprises have established or expanded their data center footprints in Cedar Rapids, drawn by the city's reliable power grid and access to renewable energy. Local financial institutions, healthcare providers, and insurance firms have continued to bolster their IT resilience with both on-premises expansions and partnerships with colocation providers.
Additionally, ark data centers (formerly Involta), a well-established name in the colocation and hybrid IT space, has maintained a strong presence in Cedar Rapids. The company operates a Tier III data center in the region, catering to mid-market enterprises and organizations seeking managed services, cloud connectivity, and disaster recovery solutions. ark’s Cedar Rapids facility benefits from a high-speed fiber network, offering secure and low-latency access to cloud platforms and business-critical applications.
Infrastructure and Connectivity
Very importantly, Cedar Rapids benefits from a robust fiber-optic network, making it an attractive option for companies looking to deploy edge computing capabilities closer to end users in the Midwest. Providers such as Lumen (formerly CenturyLink) and Windstream have strengthened regional connectivity, ensuring high-performance network routes between key Midwest metros like Chicago, Minneapolis, and Omaha.
Iowa’s competitive energy market continues to be a draw, with utilities such as the aforementioned Alliant Energy supporting sustainability initiatives and offering attractive rates. The state's commitment to renewable energy—including a growing mix of wind and solar—aligns with enterprise sustainability goals, making Cedar Rapids an appealing alternative to higher-cost markets.
Looking Ahead
While hyperscale activity often grabs headlines, Cedar Rapids' data center market is steadily growing in a way that serves enterprises, local businesses, and edge deployments. With continued investment in fiber, power infrastructure, and sustainability initiatives, Cedar Rapids remains well-positioned as a strategic IT hub in the Midwest.
And as demand for AI workloads, cloud services, and edge computing accelerates, Cedar Rapids may stand to see additional investment from colocation and enterprise players looking to tap into its cost efficiencies and geographic advantages.
