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Google lights up Iowa's economy with expansion in Council Bluffs


Written by Donnelle Eller
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Google will invest an additional $200 million in its Council Bluffs data center operations, bringing its Iowa capital investment to $1.1 billion, the tech giant said Friday at a news conference with Gov. Terry Branstad and other leaders in Des Moines.

It’s unclear how many jobs come with the growing investment. “We’re focused now on construction, but there will be jobs connected with the expansion,” said Chris Russell, manager of the Council Bluffs data center. The company now employs about 130 workers.

In April, the Mountain View, Calif.-based tech giant announced it was building a $300 million data center in Council Bluffs, just south of its existing $600 million data center that opened in 2009. The company said this spring it would create 35 jobs, with the potential for 15 more jobs.

Friday’s announcement would add $200 million to the new data center, about doubling the space, Russell said. Construction is now under way. The expansion announced in April received $9.6 million in state tax credits, but the most recent project will not, state leaders said.

“Wow, it’s been a good couple of months for economic development in Iowa,” said Debi Durham, the state’s economic development leader. She said Iowa has seen projects totaling $5.2 billion announced over nearly two years. The investments include two fertilizer plants that each are investing more than $1 billion.

Google’s interest in Iowa has raised the state’s profile with other companies looking to expand, Durham said. “When Google comes to town, the world takes notice. ... It’s like getting the Good Housekeeping seal of coolness,” she said.

Council Bluffs leaders said Google also is kindhearted.

It has invested about $600,000 in local nonprofits, schools and community improvement projects — including donating computers to schools and providing wireless Internet access in Council Bluffs’ downtown and in a large park.

Google also made a strong investment this week in Iowa’s renewable energy industry. On Thursday, the Internet search company said it would invest $75 million in a wind farm near Perry, part of the company’s ongoing initiative to green the grid.

The investment in RPM Access of West Des Moines will enable the company to invest in more wind farms in Iowa, Google said.

Branstad, Council Bluffs Mayor Tom Hanafan and Iowa Senate Majority Leader Mike Gronstal, D-Council Bluffs, said Google has helped revitalize Council Bluffs.

“Google has created good opportunities for our people,” said Hanafan, adding that the initial $600 million investment created jobs at a critical time for a state struggling with the recession. “It was the people who push dirt, the people who pour cement, the people who are electricians, and the plumbers,” he said.

Google’s Council Bluffs investment has generated an estimated $182 million in economic activity, the company said Friday.

“That’s a lot of people who have gone back to work,” Hanafan said.

Gronstal said the state’s economic development incentives had to be changed to better attract technology projects.

The first Google project, a secret at the time, prompted the Legislature in 2007 to exempt property taxes on computers, server cooling racks and other equipment used inside the data center.

Data centers also can avoid sales tax on the tremendous power needed to run the centers.

Nebraska recently changed its laws so that it could better compete with Iowa for data center projects. Both states are fighting for what is believed to be an enormous $1.5 billion data center. Altoona is believed to be the Iowa location being considered for the project.

Branstad said in April he hoped Google would consider expanding its data center operations in western Iowa. “Little did I know it would be so quick,” Branstad said. “For Google to make one, two, three, four investments in Iowa in this short of time says a lot about Iowa.”