Facebook to build $1.5 billion data center in…Iowa

In looking at the geographic dispersion of major data or server centers, it looks like Iowa is pretty popular:

Facebook is building a 1.4-million-square-foot data center on the outskirts of Des Moines, Iowa, according to a local report.

With a price tag estimated at $1.5 billion, the massive facility would join the data centers Facebook has already built in Prineville, Oregon and Forest City, North Carolina, as well as a third under construction in Luleå, Sweden…

Like Oregon and North Carolina, Iowa has become a hotbed for internet data centers. Google runs a facility in Council Bluffs, Iowa, while Microsoft operates a data center in West Des Moines. Facebook’s facility is set for Altoona, a small town north-east of Des Moines.

Companies such as Facebook are attracted to such places in part because local governments provide tax breaks for these enormous computing facilities. According to local reports, Facebook has asked for additional tax credits for using wind power to help the new facility.

It appears tax breaks win again. But, the Des Moines Register also noted some other enticing features of the area:

Iowa has been competing fiercely with Nebraska for the data center, code named Catapult…

City officials and leaders of the companies say Altoona is prime real estate for data farms because it meets all of their primary needs:

• Access to an extensive interstate fiber optic cable system, already installed within the city and running along Interstate Highway 80.

• Proximity to adequate power and water utilities. (A large MidAmerican substation is less than half a mile from the 200-acre site.)

• Open and affordable land with low natural disaster risks. (Coastal cities often face the threat of hurricanes and earthquakes.)

• Transportation access near the crossroads of interstate highways 80 and 35 and U.S. Highway 65.

What would happen if Iowa were to pull these tax breaks? What about having an educated workforce – it looks like Des Moines has a decent share of the “creative class” as measured by Richard Florida.

It would be interesting to put this is a larger Midwestern context. Would these tech companies consider the Chicago area, with or without the tax breaks? How about Ann Arbor or Madison? Are other places even competing for data centers – and if not, why not?

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