The city council of Norwalk, Iowa, has voted to approve a development agreement for a 282-acre plot of land that could be used for a data center development.

The agreement, which is with data center park developer Tract, was approved in a city council meeting on Thursday, March 5. The site is located just west of Highway 28, south of Delaware Street.

Officials said the city was preparing the land for potential projects, but it was not specifically for a data center project, and that any future data center project would need to go through “an entirely separate approval process.”

This would include new city-level reviews and approvals, state and federal regulatory requirements, and public meetings and opportunities for community input.

“Nothing about Thursday’s vote bypasses or replaces those steps,” the council said in a blog post.

Norwalk is a city in Warren County, to the south of Des Moines. The site was previously announced as "Project West" and is described on the city's development website as a "future data center project."

The city anticipates the total investment in the project to be around $12 billion, with no tax incentives requested. Total taxable valuation on full build out could total $400-$500 million, with an annual property tax revenue of $5 million per year for the city, and $15 million total to all taxing entities, including the County and schools.

City officials said they expect the project to bring around 600 construction jobs and 80 "high-quality" jobs to the city, including full-time positions in engineering, IT, management, and HVAC.

As part of the investment, Tract is funding around $8.2 million in water and street infrastructure. The city said tax revenue from the project would enable it to "invest over $20 million to expand infrastructure for area development and protect Norwalk's future growth plan."

Local opposition dismissed

There have been some concerns among local residents that a data center project in the city could increase electric and water utility rates, as well as impact water capacity and raise environmental health concerns. Some locals also raised concerns about tax incentives and city revenue.

However, the city council dismissed these concerns, describing them as “rumors” and “misconceptions.”

“A recurring rumor is that data centers cause electric utility rates to rise. In Iowa, this is not how our system works,” the council said, pointing out that the Iowa Utilities Commission must approve any rate changes, and that local operator MidAmerican Energy had not raised its base rates since 2014.

“Data centers do not have the ability to drive up residential utility bills in Iowa. Their energy use is managed through regulated utility planning, not through rate increases on local residents.”

Regarding water concerns, the city said a heavy water user could affect rates, but it aims to prevent that from happening.

On taxes, the city council reiterated the potential tax revenue and stated: “The most effective way to lower residential property taxes is by expanding the commercial and industrial tax base – or by cutting public services. New commercial valuation is what helps stabilize or reduce the burden on homeowners."

“This project strengthens the City’s long‑term financial position without shifting costs to residents. Future tax benefits could be possible, but this is a decision made by your local elected officials. They must carefully balance citizen demands for services and tax reductions.”

Finally, the council also said it was not responsible for setting industry-wide health standards for data centers, passing the buck to state and federal legislators instead.

Surveying the neighbors

City officials said they had communicated with neighboring cities with established data centers and found that “the overall benefits are significant and they have not experienced the issues or concerns currently being raised through media and social media.”

As part of this, the city shared a fact sheet detailing the benefits of Microsoft data centers in West Des Moines, Iowa.

According to the fact sheet, Microsoft is paying $32.2 million in property taxes to West Des Moines, with school districts, counties, and hospitals seeing financial benefits "that will continue in the years to come."

The city said that Microsoft data centers in Iowa employ over 500 people, with a projected 752 full-time employees and contractors working across operational facilities by the end of 2026.

Furthermore, the fact sheet said Microsoft data centers in West Des Moines only represented 2.6 percent of total water pumped to local customers. During peak times, this can just rise to six percent of total usage in the city. Microsoft has also committed to $25 million in water infrastructure to support the local utility.

Colorado-based Tract was founded by former Cologix CEO Grant van Rooyen and describes itself as a company that acquires and develops ‘master-planned’ data center parks. The company aims to get sites zoned, powered, and shovel-ready for other companies to develop data centers on.

After launching in Nevada in 2023, Tract has plans for large-scale campuses across Texas (x3), Virginia (x3), Arizona, Minnesota (x3), Iowa, and Utah. On its website, the company also lists planned developments in Illinois and has been pursuing a project in North Carolina.

In Iowa, the firm is also developing a park in Altoona, to the north of Des Moines, that could scale to 1GW.

The company said it now has more than 25GW of planned capacity and over 25,000 acres of land under control across the country, including campuses exceeding 1,000 acres and 1GW in each of Arizona, Iowa, Nevada, Texas, Utah, and Virginia.

Tract’s parent, Tract Capital, has launched a dedicated data center developer, known as Fleet DC, that will develop on land owned by Tract as well as other sites.