Gov. Terry Branstad joined with local officials to announce Microsoft's so-called "Project Alluvion," which is expected to total more than $1.1 billion and create more than 80 full-time jobs. West Des Moines Mayor Steve Gaer said construction will happen over the next four or five years.
A data center completed in 2010 resulted in about a $900 million investment from the company.
"The efforts that we put in developing a relationship with Microsoft has really led to today's announcement and the significant investment in our community in central Iowa and in our state," said Clyde Evans, West Des Moines' director of community and economic development.
The area surrounding the new center will undergo infrastructure upgrades — including improvements to nearby roads and water and sewer lines — in an effort to prep the 2,000-to-3,000-acre space for other potential industrial, commercial and residential opportunities.
About $20 million in incentives through the state's High Quality Jobs program has been provided to assist Microsoft carry the project out, Evans said. The program gives tax credits to eligible businesses to offset costs when building or expanding a facility in Iowa, and West Des Moines is set to match the offered rebate.
"We look at this as a partnership where the state does provide assistance but we also see significant benefit not only to the taxpayers here, in the school districts and the county and the city, but also to the people of Iowa in terms of the quality of jobs and the other economic opportunities it opens up," Branstad said.
Gaer said the hope is businesses that directly service or support Microsoft or other data centers begin to develop in the area. Gaer also estimated an economic impact of $8 million each year in property taxes for the city, county and school districts once the overall project is complete.
Branstad said Iowa's central location makes it an ideal location for Microsoft and other companies that have recently opened data centers. Google opened a data center in Council Bluffs in 2009, and announced in 2012 its plans to expand it. Facebook is building a data center in Altoona that should open early next year.