Cedar Rapids mayor defends data center projects amid kickback claims, NDA questions
Cedar Rapids Mayor Tiffany O’Donnell is defending the city's support for two hyperscale data centers, including projects by Google and QTS, amid claims of kickbacks and concerns about water use and utility rates. She highlighted the $25 million in annual property tax revenue during the incentive period, which will rise to $55 million, and cited a third-party study confirming sufficient water capacity. O'Donnell also clarified that nondisclosure agreements were signed by city economic development staff, not council members, and denied kickback accusations.
Cedar Rapids Mayor Tiffany O’Donnell has publicly defended the city's backing of two major hyperscale data center projects, with a third smaller one underway, in the Big Cedar Industrial area. These projects, which began with Google's interest in 2019, represent over a billion dollars in investment and have generated 8,500 construction jobs. O'Donnell dismissed claims of kickbacks to city officials and addressed concerns regarding water capacity, utility rates, and economic impact.
She stated that the Big Cedar site was pre-designated and zoned for large industry, and that data centers, including QTS's closed-loop system, adhere to stringent noise, air quality, and pollution standards monitored by Linn County Public Health. Addressing water usage, O’Donnell cited a third-party aquifer stress test by Black & Veatch, which concluded the city’s water system can sustain the projects even under severe drought conditions. She also noted that QTS's discharged gray water could be resold.
The Mayor confirmed that the city is providing a 15-year tax incentive to the companies to remain competitive, asserting that these projects will still generate $25 million annually in property taxes during the incentive period, escalating to $55 million thereafter. She emphasized the necessity of these commercial property taxes for the city's financial health and the Cedar Rapids Community School District. Furthermore, Google is contributing $350,000 annually to a new community betterment fund, with QTS's total contribution amounting to $18 million.
Regarding utility rates, O’Donnell mentioned that Alliant Energy CEO Lisa Barton has pledged a five-year rate freeze, and any rate increases must be approved by the Iowa Utilities Commission. She clarified that the data center companies covered the cost of necessary water and wastewater infrastructure improvements. While O'Donnell denied signing any personal nondisclosure agreements, she acknowledged that city economic development staff and the economic alliance had signed NDAs with Google and QTS early in the process, which were later obtained via a Freedom of Information Act request. She also vehemently denied any kickbacks to council members.