Wahawk Power Data Center: 80,000 SF Facility Brings $6 Million Minimum Investment to South Waterloo Business Park

By Jared Hottle | Published: 2026-02-24

Wahawk Power Data Center — 80,000 SF, $6M Value in South Waterloo Business Park

Wahawk Power Data Center: 80,000 SF Facility Brings $6 Million Minimum Investment to South Waterloo Business Park

Aerial view of the South Waterloo Business Park, a 183-acre Iowa Certified Site located south of Highway 20 in Waterloo.

The South Waterloo Business Park has its first anchor tenant. On December 15, 2025, the Waterloo City Council reviewed the sale and conveyance of approximately 12 acres of city-owned property to Wahawk Power, LLC for the construction of an 80,000-square-foot data center with an accessory water treatment area and substation. The purchase price: $1.00. The minimum assessed value: $6,000,000. The tax rebate schedule: 10 years at 50%.

The development agreement, includes an option for Wahawk Power to acquire an additional 10 to 12 acres of adjacent land for future expansion—also at $1.00—within five years of the agreement date. The project is expected to create 10 to 30 new jobs in a business park that has been in development for nearly a decade.

Deal Structure: Property Conveyance and Financial Terms

The property sits north of 570 West Shaulis Road in the Southwest Quarter of Section 9, Township 88 North, Range 13 West of the Fifth Principal Meridian, Black Hawk County, Iowa. The legal description covers the East 1,600 feet of the Southwest Quarter lying north of the South Half of the South Half.

The City conveys the land via special warranty deed for $1.00. In return, Wahawk Power commits to constructing the 80,000-square-foot data center with a minimum assessed value of $6,000,000. The project falls within the San Marnan Urban Renewal and Redevelopment Plan Area, being changed to the Amended and Restated South Waterloo Unified Urban Renewal and Redevelopment Plan Area.

The South Waterloo Business Park: 183 Certified Acres

The South Waterloo Business Park totals 183 acres and is located at the southeast corner of Ansborough Avenue and U.S. Highway 20. It earned designation as an Iowa Certified Site through the Iowa Economic Development Authority (IEDA) program, making Waterloo one of only 17 certified sites in the state at the time of certification.

To achieve that designation, the site had to meet eight rigorous criteria evaluated by McCallum Sweeney Consulting, a nationally recognized site selection firm. Requirements included the ability to provide at least 5 megawatts of electric energy, fiber optic connectivity, and 500,000 gallons of water per day of excess capacity. The City's economic development listing notes the park now features a new electric substation on site, fiber optics, and 1.5 to 2 million gallons of water per day of excess capacity.

The certification process was completed in partnership with the Greater Cedar Valley Alliance and Chamber, led by then-President/CEO Steve Dust. At the time of certification, the park was specifically identified as well suited for companies engaged in light industrial, logistics/distribution, and data centers (Cedar Valley Regional Partnership).

In October 2023, the City Council approved the sale of 60 acres within the park to PWM Companies LLC for $2.16 million ($36,000 per acre) to construct two 138,000-square-foot buildings targeted at manufacturing, robotics, agriculture, food processing, logistics, and warehousing (Waterloo-Cedar Falls Courier). Wahawk Power's data center now joins that initial investment as the park's second major commitment.

Infrastructure Pipeline: $3.8 Million in RISE Grants

The State of Iowa is investing directly in the roads that will serve this park. The Iowa Department of Transportation (IDOT) Commission approved a total of $3,797,798 in Revitalizing Iowa's Sound Economy (RISE) grants for the City of Waterloo, covering 60% of the $6,329,663 in eligible infrastructure project costs.

That funding supports the construction of 2,600 feet of Dakota Drive, 470 feet of Wolfe Drive, turning lanes on Ansborough Avenue, and a roundabout at the intersection of Ansborough Avenue and the U.S. 20 eastbound ramps (City of Waterloo). The partnership between the City and the OPUS Group provides additional infrastructure including water, sewer, and electrical service to the park.

The timing is significant. KWWL reported in January 2026 that the latest RISE grant amendment of nearly $700,000 raised the total investment to the $3.8 million figure, with city leaders confirming the funds would support roads and roundabouts at the Highway 20 interchange (KWWL).

Why Iowa for Data Centers: Energy, Fiber, and Tax Policy

Wahawk Power's decision to build in Waterloo aligns with a statewide trend. Iowa hosts 84 to 95 data center facilities across 10 markets, according to industry trackers Baxtel and DataCenterMap. The state has attracted billions in investment from Meta ($2.5 billion campus in Altoona), Apple ($1.4 billion facility in Waukee), Microsoft (multiple facilities exceeding $2 billion in West Des Moines), and Google (multiple facilities in Council Bluffs).

Three factors drive that investment:

Low-cost, renewable energy. Wind generated 62% of Iowa's electricity in 2024, according to the American Wind Energy Association and MidAmerican Energy reporting. MidAmerican Energy delivered the equivalent of 100% carbon-free energy to its Iowa customers in 2024 and has invested nearly $16 billion in wind and solar projects over the past two decades. Iowa's average commercial electricity rate sits at approximately 8.65 cents per kWh, well below the national average. MidAmerican's Iowa customers pay rates that are 39% below the national average for investor-owned utilities (MidAmerican Energy).

State tax incentives. Iowa offers sales tax exemptions for data centers investing as little as $1 million, with larger incentives for projects exceeding $200 million. There is no property tax on equipment. Under House File 976, signed by Governor Kim Reynolds on June 6, 2025, data centers in cities with populations over 30,000 can claim energy purchase exemptions for 10 years on new construction. Waterloo's population exceeds that threshold (Iowa Department of Revenue).

Low natural disaster risk. Iowa ranks among the lowest-risk states for earthquakes, according to the USGS Earthquake Hazard Program, and experiences fewer blackouts than coastal markets—a critical factor for data center uptime requirements.

Cedar Valley Fiber and Connectivity Landscape

Waterloo and Cedar Falls already have a foundation of digital infrastructure that supports data-intensive operations.

Bluebird Network completed an 11.74-mile fiber expansion in Waterloo in June 2022, establishing a Point of Presence (PoP) in the community and connecting the market toward Chicago via a diverse Midwest fiber route. Bluebird operates over 10,600 miles of fiber across the Midwest (Business Wire, June 7, 2022).

Metronet completed its $30 million fiber-optic network in Waterloo in February 2025, offering residential speeds up to 5 gigabits per second and business speeds up to 10 gigabits per second. Ookla's Speedtest Intelligence named Metronet the fastest internet provider in Waterloo for the second half of 2024 (Metronet).

The City of Waterloo itself passed a referendum in September 2022 to fund a municipal fiber-optic broadband network capable of exceeding 10 Gbps at deployment, connecting city operations and offering fiber-to-the-home/premise service (City of Waterloo).

In Cedar Falls, the TEAM Companies (now VISI) data center at 1205 Technology Parkway has operated since 2004 as a 60,000-square-foot, Tier III, SSAE-16 Type 2 certified colocation facility with carrier-neutral connectivity and three fiber entrances. South Front Networks also operates a data center at 206 West 13th Street in Waterloo.

Wahawk Power's 80,000-square-foot facility would be substantially larger than any existing data center operation in the immediate Cedar Valley market.

Development Timeline and Construction Requirements

The development agreement establishes clear deadlines that reflect the City's expectation for rapid execution:

Commencement Deadline: Company must obtain all permits and begin construction within 6 months of property conveyance.
Completion Deadline: Construction must be substantially complete within 14 months of conveyance.
Extension Possibility: The Community Planning and Development Director may consent to a 6-month extension; longer extensions require City Council approval.
Minimum Assessment Completion Target: If improvements are not substantially completed by December 31, 2026, the parties agree to execute an amendment extending the timeline.

If Wahawk Power fails to meet these deadlines, subject to force majeure provisions, the City retains the right to terminate the agreement and revert title to the property. The company cannot recover any costs expended on the project in such a scenario. The development agreement even includes a power of attorney provision allowing the City to execute a deed on the company's behalf if the company fails to return the property within 30 days of written demand.

Expansion Option and Right of First Refusal

The development agreement includes two forward-looking provisions that signal the potential for a larger campus:

Option to Purchase. For 5 years from the agreement date, Wahawk Power holds an option to purchase an additional 10 to 12 acres of abutting land for $1.00. Exercise requires written notice and execution of a new development agreement and minimum assessment agreement comparable in scale to the initial project.

Right of First Refusal. During the same 5-year period, if the City receives a bona fide third-party offer for any portion of the option property, Wahawk Power has 15 days to match the offer terms at the $1.00 purchase price, provided the company enters into comparable development commitments.

The option property's legal description (Exhibit A-1 in the agreement) is listed as "to be determined by formal plat of survey." If exercised in full, the total campus could encompass 22 to 24 acres—a footprint consistent with regional data center expansion patterns.

Tax Impact: Minimum Assessment and Rebate Mechanics

The Minimum Assessment Agreement (MAA), signed concurrently with the development agreement and certified by the Black Hawk County Assessor, establishes the following terms:

Minimum Actual Value: $6,000,000
MAA Termination Date: December 31, 2037
Base Value (Pre-Development): $73,957
Tax Rebate: 50% annually for 10 years on taxable value added above the $73,957 base
Rebate Source: Tax Increment Financing (TIF) through the Urban Renewal Area
Rebate Conditions: Subject to annual City Council appropriation; Company must have paid all property taxes due before receiving a rebate for that fiscal year

Key Takeaways for Property Professionals

First anchor tenant in the South Waterloo Business Park positions the 183-acre certified site as an active, investable market—not just a future plan.
$1.00 land conveyance with a $6 million minimum assessment follows a model the City has used successfully in other business parks, including recent transactions on Titan Trail in the Northeast Industrial Park.
10-year, 50% TIF rebate is funded through tax increment financing, meaning the rebate comes from new tax revenue the project itself generates—not from existing City budgets.
Expansion option for 10-12 additional acres suggests Wahawk Power has a phased campus plan. The 5-year exercise window aligns with typical data center build-out timelines.
14-month construction deadline signals an aggressive schedule, typical of modular or pre-fabricated data center construction approaches rather than traditional commercial builds.
Fiber infrastructure density in the Cedar Valley—with Bluebird Network, Metronet, Waterloo Municipal Fiber, and the existing TEAM/VISI data center in Cedar Falls—creates a connectivity ecosystem that supports data-intensive operations.
Iowa's energy cost advantage (commercial rates approximately 8.65¢/kWh, with 62% wind-generated electricity) directly impacts data center operating margins, where power typically represents 40-60% of ongoing costs.
State sales tax exemptions for data center equipment and energy purchases, combined with local TIF incentives, create a layered incentive structure that reduces both capital and operating expenditures.

Sources

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