There’s little doubt that secrecy has paid development dividends for the city of West Des Moines — and it’s about to pay off again. The secret development of the day is a data center under the code name Project Osmium, a project that the Iowa Economic Development Authority will consider giving state tax credits to on July 22. 

But before we get to what some say the hidden name of the company is, the number of jobs that should be expected and the size of the project – those answers are below – it’s worth a look at some of the other secret projects Iowa has landed and the fine line city officials are trying to walk to land those projects. 

It’s a fine line that probably does not violate the letter of the state’s open records and public meetings law, but it does run afoul of the spirit of doing the public’s business before the public, according to one advocate for transparency in government. On the other hand, city and economic development officials believe it is a necessary path to take in order for their communities to grow.

Microsoft Corp. demanded confidentiality when it was considering its first data center on South 88th Street. West Des Moines Mayor Steve Gaer often tells the story about finding out the name of the company the city was dealing with at that time after a staffer noticed a “Property of Microsoft” sticker on a laptop computer.

After that deal was sealed, the company made no secret with city officials that it was planning more data centers and was looking for more land in West Des Moines. But mum was the word on that search until Microsoft fessed up and bought a nearly $10 million chunk of Willow Creek Golf Course for a project that would swamp $1 billion in construction. Microsoft took out a $320 million building permit last month for another expansion at that site along Iowa Highway 5 near Veterans Parkway that will bring its footprint to 1.1 million square feet.

The result for the city has been an explosion of street construction and other infrastructure improvements. Nearby property owners will benefit. Knapp Properties recently worked out a realignment of the Great Western Bike Trail with Polk County that will make way for an office park that has been several years in the planning on Knapp land near Veterans Parkway and Maffitt Lake Road.

Real estate developer Richard Hurd has said the Microsoft development at Willow Creek has sparked interest in development ground he owns in the area.

It should be noted also that before Microsoft located a data center complex in southwest West Des Moines, Colby Interests launched its Fox Valley residential project.

No doubt about it, that’s all good stuff for a city that seems to be forever on the grow.

So little wonder that Gaer and other city officials take heed when a Fortune 500 says, in effect, “Hey, let’s keep this deal under wraps for a while.”

On Monday, the West Des Moines City Council approved an application for state of Iowa development incentives for a “technology” company operating as Project Osmium. It appears the company would like a rebate of the state sales tax it would pay on construction materials, one of many tax benefits under the state’s High Quality Jobs program.

The Iowa Economic Development Authority board will consider the application on July 22. West Des Moines plans a press conference after the meeting. And after that, Gaer said the city will work out the details of its own development agreement with the real company behind Project Osmium. By July 22, Gaer and other city officials will be prepared to say the name.

So, if you want to be in on the secret when the IEDA board determines whether to bestow tax credits for what one local development officials describes as a “real game changer,” attend the meeting or wait for the public announcements after the meeting. If you have an objection before then, too bad.

The argument for secrecy has a couple of tongues. One says that greedy landowners would seek a premium price for their property if they knew the buyer’s true identity. The other says that the company doesn’t want competitors to know what it is up too.

Regardless, local officials don’t want to take the risk of losing the project. So, they agree to keep quiet. Gaer also points out that other cities have found themselves in similar situations, especially when dealing with data centers. Facebook Inc.’s $1 billion data center in Altoona comes immediately to Gaer’s mind, as does Google’s data center in Council Bluffs.

Gaer assured the Business Record before the vote on Monday that council members knew the name of the company.

“The company says we have to keep it confidential,” Gaer said. “I think our citizens would be very frustrated if we lost this project because we leaked confidential information.”

Randy Evans, executive director of the Iowa Freedom of Information Council, has a different take on confidentiality agreements between private business and public entities.

“When providing incentives of one manner or another, if the people don’t know what the business is, who it is, the public is being cheated,” he said.

The confidentiality agreements might not be illegal, but they do violate the intent of Iowa’s open meetings and public records law, Evans said.

“The underlying concept behind the open records and open meetings law is that the people of Iowa deserve to know what is being done in their name,” he said. “That is difficult to do when the public is deprived of one fundamental detail, and that’s who the company is.”

One person who has been briefed on Project Osmium said attendees at that meeting were required to take what amounted to a “blood oath” to keep the details a secret.

Others who are familiar with the project say Project Osmium is a cover for Microsoft. They also say the project will bring 150 jobs to a 350-acre development in southwest West Des Moines bridging Warren and Madison counties that includes 1.5 million square feet of construction. They also point out that many of the details are still being flushed out, including the overall size of the development.

Colby Interests is among the property owners. The company owns roughly 230 acres west of Interstate 35 in Warren County and has an interest in another 64 acres in Madison County. 

Theresa Greenfield, president of Colby Interests, has declined to comment over the last several months on the future use of that land, which is located south of Adams Street about a mile north of the new interchange of I-80 and what is called Cumming Avenue in Warren County and Cumming Road in Madison County. The Colby land straddles the Warren and Madison county border.

Another landowner is said to have recently come to an agreement to sell property for the data center project.

Secrecy surrounding the deal is understandable, said Tom Leners, executive director of the Madison County Development Group. At this point he doesn’t need to know the name of the company that could have a major impact on his county. He has been told that the project is big and that it’s in the northeast section of the county, and that’s good enough for him.

“These deals are shrouded in secrecy for a good reason,” he said. “We respect that because we understand that they need to get their planning together.”

Hollie Askey, executive director of the Warren County Economic Development Corp., agreed that secrecy is an accepted component of big developments, and the West Des Moines project is big, a “game changer,” she said. 

 

She made a promise to keep the details a secret, and she wouldn’t break her promise.