(Editor’s note: This is the first of two stories about Monday night’s Marshalltown city council meeting and the ongoing controversy surrounding potential data center development.)
Monday night marked another eventful marathon meeting for the Marshalltown city council as the second and third readings of a four-month data center moratorium passed, a prospective developer of a data center in the Edgewood Industrial Park presented to the council, and two attempts to enter into closed session failed without a sufficient supermajority to do so.
At the request of Councilor Marco Yepez-Gomez, the items related to data centers were moved up on the agenda so that the large crowd gathered to speak and hear about the issue could do so sooner, and Zoning Administrator/Assistant Housing and Community Development Director Clayton Ender informed the council that there had been no changes to the ordinance since the first reading passed by a 6-1 tally two weeks ago. A motion to waive second and third readings at that meeting, however, failed to gain a ¾ supermajority when Councilors Gary Thompson and Mark Mitchell joined Councilor Jeff Schneider in voting against it.
Most of the public commenters who spoke on the agenda item endorsed enacting the moratorium, which does not officially take effect until it is printed as a legal notice in the Times-Republican on Aug. 27, as quickly as possible. Both Mark Eaton and Annie Grieshop questioned the legality of setting the clock on the “four-month” moratorium to end Nov. 23 when it is only now actually taking effect, more than a month after the initial motion on July 13. Schrodinger jokingly referred to it as “Schrodinger’s Moratorium” and urged the council to either change the name or live up to it.
“How are you not getting yourself in hot water in either direction?” Eaton asked.
Ender explained that he believed the motion last month was sufficient to enact a moratorium, though they later received an opinion from the city’s legal counsel that it should go through the ordinance reading process. He also told Councilor Greg Nichols that he felt the Planning and Zoning Commission had sufficient time to draft rules and regulations and invited the public to the upcoming open house at the Veterans Memorial Coliseum beginning at 5:30 p.m. on Thursday.
Sheri Larsen, a resident of Shady Oaks Road, described herself as “in the eye of the storm” regarding the potential annexation and data center development near her home and advocated for the moratorium.
Marshalltown Area Chamber of Commerce President/CEO John Hall, who initially opposed the moratorium, told the council he believed it should be passed while waiving the third reading if for no other reason than to preserve people’s time with more public discussions and Planning and Zoning meetings still to come. He also hoped to get past the “concerns and conspiracies” he has seen on social media and elaborated a bit on the presentation to come, noting that the moratorium would still allow a developer like Swarm Systems to engage in due diligence and site planning work with an understanding that the project would ultimately have to meet the new rules and regulations once they have been enacted.
In response to a point of clarification from Councilor Sue Cahill that the Shady Oaks area is not currently within the city limits, Zachary Hamilton, a resident of said area, noted that it is part of the city’s comprehensive plan (discussed and narrowly approved later in the meeting) for future industrial development and annexation, and Hamilton encouraged the city as a whole to “be productive” during the moratorium.
“My impression of the city council is (that) the votes would currently be in favor of a data center eventually being in Marshalltown, and speaking as someone who could be affected by one next door, I think the worst thing that could happen would be to bicker and argue and get through the whole moratorium and not have any progress made on our zoning ordinances,” he said. “I would encourage the community as a whole to be proactive and involved in these conversations as the moratorium goes into effect.”
Leigh Bauder encouraged city officials to utilize the University of Iowa’s new Data Center Decision Tool, characterizing the process as one that will leave a legacy for generations of Marshalltown residents to come. Jimmy Landt, a resident of North 4th Avenue, hoped the upcoming meeting would present the positives and negatives of data center development and advocated for allowing the public to vote on the matter, which drew a hearty round of applause.
“Let the people that pay the taxes make a determination,” he said.
He also criticized the mayor and council for failing to address nuisance issues in town. Mayor Mike Ladehoff told him the upcoming presentation from Swarm Systems would likely present many of the positives and said the city was not interested in a “bad” project that would negatively impact the community.
“That’s why you elected these people to represent you,” Ladehoff said.
The motion to pass the second reading passed 5-1 with Schneider opposed and Councilor Melisa Fonseca, who was attending the meeting remotely, unable to vote due to communication issues. A subsequent motion to waive the third reading then passed 6-0 with Fonseca still unable to vote.
Swarm Systems presentation
About a half hour later, the council heard from Swarm Systems CEO Amir Atefi on his proposal for a data center project in the Edgewood Industrial Park, but before the conversation started, Thompson objected to its inclusion on the agenda as he felt it violated the “intent and spirit” of the moratorium.
“I know that legal is going to say this is about land, but it’s about land for a data center. So I just want to go on the record and say until the moratorium is over, we should not be having this conversation,” he said to a round of applause.
First, U R Energy CEO Jarrod Ulery, who is working with Swarm Systems on the project, spoke of his local roots and connections and introduced Atefi.
“Amir’s approach is different. They are focused on a smaller, more manageable AI (Artificial Intelligence) inference data center that can fit into a community like Marshalltown while being thoughtful about our resources including water, power, infrastructure, jobs and the long-term impact on our community,” Ulery said. “I believe Marshalltown has the opportunity to be part of the next generation of technology and energy development, but I also believe we need to do it responsibly with the community at the table and with people who understand that this is our home.”
Atefi then explained that his company has put in an offer to buy 21 acres of city-owned land in the Edgewood Industrial Park near JBS, and he clarified that he was not there to ask for approval of the construction of a data center, but rather a land purchase contract to enter into an option to advance due diligence on power, land, environmental and civil aspects to understand what the project could and should look like.
He added that he was not asking for any exemptions from the moratorium, instead offering his support for the action and calling it one of the more responsible and proactive processes he had seen in the country. After explaining the basics of what constitutes the various types of data centers and how they function, he acknowledged that they have gotten a “bad rap” lately because they haven’t always been built correctly and used a lot of power and water.
The industry has since shifted, he said, toward using closed loop water systems that recirculate for approximately 10 years after the initial fill-up and no longer utilizing on-site power generation but tie into the larger electrical grid. Swarm’s proposal is to build a single story 125,000 square foot building about the size of a Home Depot, and Atefi said about 20 of the buildings could fit inside one hyperscale project.
He then broke down water usage among various industrial, commercial and residential properties and said the Swarm project would use less than 500,000 gallons annually. On the noise front, he said the current decibel level coming from JBS and adjacent uses is around 50 decibels, and he indicated that the data center could comply with the already established sound regulations in general industrial areas.
Atefi told the council that the developers would not be seeking any tax incentives whatsoever on a roughly $345 million investment and generate an estimated $3 million in annual property tax revenue along with 50 to 60 permanent high-paying jobs after construction is complete.
“What’s really important here is that those actually become Marshalltown jobs. It doesn’t make any sense for me to tell you there are new jobs and then ship people in to fill them,” he said.
He pledged to work with Marshalltown Community College (MCC) to create dedicated data center technician training programs and utilize local labor, vendors, restaurants and even coffee during the building process. As he shared the location and shared a conceptual plan, Atefi noted that there are residential areas nearby and stressed the importance of being a good neighbor by creating “as much of a buffer as possible” on the west and southeast sides of the property and beautifying the public right of way.
“What if I told you a data center could be beautiful? We intend to build something that you would be proud to have here,” Atefi said.
Building on the neighborly theme, he mentioned contributions to the city’s parks and recreation department and the bridge railing as potential avenues to give back to the community, and Atefi said the company hopes to integrate itself into Marshalltown like other major businesses and industries have done in the past.
“All we’re asking for today is the opportunity to go to bat and adhere to whatever standards you set when you do so. Again, we support the moratorium. We think it’s being done responsibly. We think it’s proactive, and we think it’s the right way forward for Marshalltown,” Atefi said, noting that he would never ask anyone to sign a Non-Disclosure Agreement (NDA). “All we would like to do is spend our own money at our own risk to advance a possible project and put it out in front of all of you for public comment, display and effectively kind of co-building it so we can try to build a project that works for everybody.”
Contact Robert Maharry at (641) 753-6611 ext. 255 or rmaharry@timesrepublican.com.