Iowa City Council Approves Land Deal for Potential $12 Billion Data Center Park
March 16, 2026
The city council of Norwalk, Iowa, has moved forward with a significant development agreement, underscoring the continued expansion of data center infrastructure into new markets despite growing public scrutiny over resource use and community impact. The vote highlights the balancing act local governments face between pursuing major economic investments and addressing resident concerns.
On March 5, the council approved an agreement with data center park developer Tract for a 282-acre site located west of Highway 28 and south of Delaware Street. The land, previously known as "Project West," is being prepared for potential development, though officials emphasized that any specific data center project would require a separate, comprehensive approval process involving city reviews, state and federal regulations, and public input. "Nothing about Thursday’s vote bypasses or replaces those steps," the council stated.
The scale of the potential investment is substantial. City projections estimate a total investment of around $12 billion, with no tax incentives requested. Upon full build-out, the site could generate a taxable valuation of $400-$500 million, delivering approximately $5 million in annual property tax revenue to Norwalk and a total of $15 million to all taxing entities, including the county and schools. Tract is funding $8.2 million in initial water and street infrastructure. The city asserts that resulting tax revenues would enable it to invest over $20 million to expand area infrastructure. The project is also expected to create about 600 construction jobs and 80 permanent high-quality positions in fields like engineering and IT.
The approval came despite vocal local opposition. Residents raised concerns about potential increases in electricity and water utility rates, impacts on water capacity, environmental health, and the fairness of tax arrangements. The council dismissed many concerns as "rumors" and "misconceptions." It clarified that in Iowa, data centers cannot unilaterally drive up residential electricity bills, as rate changes require approval from the Iowa Utilities Commission, and noted that local utility MidAmerican Energy hasn't raised base rates since 2014. On water, the city acknowledged a heavy user could affect rates but said it aims to prevent that. Regarding taxes, the council argued that expanding the commercial tax base is the most effective way to lower the residential property tax burden, stating this project strengthens the city's finances "without shifting costs to residents."
To bolster its case, Norwalk officials cited positive experiences from neighboring cities with data centers, sharing a fact sheet on Microsoft's operations in West Des Moines. Microsoft reportedly pays $32.2 million in property taxes there, employs over 500 people in Iowa, and its data centers use only 2.6% of the local water supply, peaking at 6%. Microsoft has also committed $25 million to local water infrastructure.
Tract, founded by former Cologix CEO Grant van Rooyen, specializes in developing "shovel-ready" data center parks. The company now controls over 25,000 acres nationwide with more than 25GW of planned capacity, including large campuses in Arizona, Iowa, Nevada, Texas, Utah, and Virginia. In Iowa, it is also developing a site in Altoona capable of scaling to 1GW.
Source: datacenterdynamics
