5,000 acres of land opened for development by new Microsoft data center
KENT DARR Jul 22, 2016 | 10:06 pm
3 min read time
821 wordsBusiness Record Insider, Real Estate and DevelopmentProject Osmium is a Microsoft cloud – or perhaps more technically a cloud-computing data center – that is sure to be a rainmaker for the city of West Des Moines. The project will open 5,000 acres to development, could double the size of a rural school district and add millions in valuation to a county that is confronting a courthouse crisis.
West Des Moines Mayor Steve Gaer said during a news conference Friday that revealed details about Microsoft’s third data center project for the city that annual property tax revenues in his city alone will increase by $12 million a year.
The reason: Microsoft and the city have agreed to an annual valuation of $307 million a year for a project that will span 200 acres, add an estimated 1.7 million square feet of structures and generate a total investment of up to $2 billion when the project is completed in 2022.
First, $65 million of those property taxes will be used to build a long-sought highway that will drop out of Polk County south into Warren County, then head west into Madison County and eventually veer north into Dallas County. By the way, those are the four counties touched by the West Des Moines city limits. Tax dollars also will be used to extend water, sewer and utilities to Project Osmium.
For officials in Warren and Madison counties, that highway, now called Veterans Parkway, represents the key to future growth. That growth translates to property tax revenues that can be used for a range of projects.
Doug Shull, chairman of the Warren County Board of Supervisors, estimates that the commercial valuation for his county, which now stands at about $200 million, will double as a result of the Microsoft data center and the additional development that will follow additional infrastructure, such as water and sewer lines, in the northwest section of the county.
The revenues generated by those assessments could go a long way toward helping the county deal with the shuttering of its courthouse because of health and safety issues. Voters rejected a $35 million bond referendum that was intended to solve the problem. Now the county is working on a scaled-back plan.
In Madison County, the highway will open up about 10 square miles of land for development. Some of that land is held by farm families, and some of its controlled by developers and land brokers who have been waiting more than a decade for Veterans Parkway to be extended.
“It takes something like this to stir up development,” said Tom Leners, executive director of the Madison County Development Group.
Dr. Susie Meade, superintendent of the Winterset School District, said residential developments that are expected to sprout as a result of the highway could double enrollment. Already, school officials are reconsidering future development plans, including whether to build satellite schools in the northeast section of the district.
The school district currently is the largest in the state by geographic area and has 1,800 students, the majority living in Winterset. The district’s bus drivers log an average of 1,300 miles a day.
Meade said the district is attempting to accelerate the schedule of its bond payments in order to be prepared to build additional facilities, possibly in the northeast part of the county, if needed.
The highway presents a “wonderful opportunity,” she said.
When Veterans Parkway originally showed up on a wishlist of Greater Des Moines road projects more than a decade ago, the completion of its final leg was forecast for 2050.
With property tax revenues from Project Osmium, West Des Moines plans to finish six miles of the road, including a bridge over the Raccoon River, by 2019.
Bill Knapp II, chairman of Knapp Properties Inc., said as he was leaving Friday’s news conference that it was “time to get some road maps” into the company’s offices in West Des Moines.
Knapp Properties owns about 1,800 acres south of Raccoon River where development will benefit from the completion of Veterans Parkway. The bridge over the Raccoon River frequently is referred to as the Knapp Bridge.
Knapp Properties President and CEO Gerry Neugent said that company founder William C. Knapp started acquiring that land near Raccoon River in the 1990s. The company recently bought another addition to the property. Businessman Jim Cownie is a partner in the Raccoon River land.
So far, the company has had vague concepts for its development, including estate lots on the bluffs overlooking the river and higher density residential development on the property’s open spaces. In addition, areas near where Veterans Parkway jogs north and becomes Grand Prairie Parkway could support some commercial development, Neugent said.
In addition, Knapp Properties also owns land where the extension of Veterans Parkway will begin at Maffitt Lake Road. That property could support an office development.
Knapp Properties is looking at a range of public and private funding for the bridge over the Raccoon River, Neugent said.
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