Microsoft to Build Data Center in Central Iowa

Microsoft (MSFT) has committed to building a massive 1.2 million square-foot, $1.1 billion regional data center complex on 154 acres in central Iowa, a project officials pledged will create more than 80 jobs in the local area over a four- to five-year phase-in period.

The vendor will receive some $87 million in local and state incentives to build its “Project Alluvion” in West Des Moines, according to the Davenport, Iowa, Quad-City Times. The online report said Microsoft’s new Iowa server farm will house equipment for its online services businesses and web portal services.

Iowa is backing the data center with some $60 million in project contributions and $20 million in investment, research and sales tax credits and refunds. Also included in the deal are local grants, road and infrastructure improvements, and water, power and sanitary sewer provisions.

Microsoft, which has operated a data center in Iowa since 2009, a year ago disclosed plans to plunk down $680 million to expand its existing Des Moines facilities to support cloud services. This additional effort brings the vendor’s investment in the area to some $2 billion, granting it Top Dog status in the state for the largest investment outlay.

“This is a huge day for all of us,” said Steve Gaer, West Des Moines Mayor. Gaer said the project will generate $8.2 million in yearly property taxes for the city, county and local schools, and suggested associated spinoffs and suppliers will deliver additional jobs and tax revenue to the area in the future.

“It really sets up central Iowa as the leading technology center in the United States,” he said, meaning Microsoft doesn’t have Iowa all to itself. Facebook (FB) plans to build a data center in Altoona and Google (GOOG), which opened a data center in Council Bluffs in 2009, is expanding its data center footprint in the state as part of an overall $1.1 billion investment in the local area.

Last December, Microsoft paid $11 million to buy 200 acres of industrial land in rural Port of Quincy, Wash., to build a second data center there, tripling the size of its current 470,000 square-foot server plant, and employing about 100 people. The project is slated for completion early next year.