Prospective Marshalltown data center developer fields questions from council, public
Trending
(Editor's note: This is the second of two stories about Monday night's Marshalltown city council meeting and the ongoing controversy surrounding potential data centers.)
A "best case scenario" would involve breaking ground in the second quarter of 2027 and being operational by the end of 2028, and Amir Atefi of Swarm Systems said Marshalltown had "all the right ingredients" to benefit from the "fourth industrial revolution" of AI infrastructure. Because of uneasiness about AI, Atefi said the easiest lever to pull is the word "no," but he cited the history of companies like Lennox, Fisher Controls and MARSHALLTOWN in building and distributing internationally-renowned products.
"Three times over, the future didn't arrive here finished. Someone in this town built it, and the world came asking for it by name," he said. "You can say no to this version of the future. You can say no to the version of the future that you don't want to see but still say yes to your share of it. Those are not the same question. The future is coming at all of us very fast, but there is another way to build it -- a smaller, more organic way, a way where the values stay closer to the ground and more towns and more people get to win, not just the same people who have been winning all along. We believe in that version, and we'd like to help prove that to Marshalltown."
As he concluded his initial remarks and received his own round of applause, Atefi opened the floor up to questions from the mayor, council and the public, telling Ladehoff that the average permanent job at the completed data center would pay a six-figure salary with some close to $200,000 and that those interested in working there could have the cost of their education and training covered by the companies.
Mitchell asked Atefi for examples of centers that he had already built, and he cited an example of a 270 megawatt hyperscale project in Elk Grove Village, Ill., known as "The Data Center Capital of the Midwest." Another project within an industrial park in Marshfield, Mo. was paused back in May, and Atefi explained that after having land under letter of intent (LOI) exclusivity, the seller ultimately sold it to another buyer. He said the residents of Marshfield, which now has a moratorium of its own, were "wronged" by the other buyer after they graded the site without permits or public engagement.
Additionally, Mitchell pressed Atefi on why he touted a lack of NDAs or closed door policies when Atefi and Hall had sent out invitations for private one-on-one meetings with individual councilors last week. According to emails shared with the T-R, Schneider and Nichols accepted the meetings, while Thompson, Fonseca and Cahill did not respond to the requests. Mitchell declined and explained his reasoning in a response email.
"I am respectfully declining because I feel any and all questions need to be presented and addressed in a public forum, such as a council meeting or community roundtable. If you have invited other councilmen or county supervisors to meet with you, I do not agree with these types of private meetings. However, I cannot control the decisions of my fellow councilmen should they decide to meet with you. I want and support full transparency for the public on this data center issue as well as other issues that impact the citizens I represent in Marshalltown," Mitchell wrote.
Atefi did, however, specify in his emails that he would not ask anyone to sign an NDA and that the project should be developed "out in the open."
On Monday, Mitchell went on to ask Atefi how he could be trusted in light of that information, and the developer said the information made available during the public presentation was "more robust" but hoped the private meeting would offer councilors a chance to ask any further questions they might have.
Thompson asked Atefi about his background, which includes work in commercial real estate, private equity, infrastructure construction in his native California and now data center development. He also told Thompson he had fallen in love with Iowa during his time here in response to a joking question about when he would be moving to the state.
Yepez-Gomez told Atefi he had opposed allowing him to present at Monday's meeting and felt that he would be unable to correct "inaccuracies" from the Power Point regarding the land contract for legal reasons. The councilor, citing Atefi's commitment to transparency, asked if he had any issue discussing the land contract publicly, and he did not object to it.
During the public comment period, Atefi fielded a wide variety of questions, indicating that there was no end user in place yet, but it would likely be an "S&P 493" company that doesn't operate a giant cloud, using examples like Principal, JPMorgan Chase and Pfizer. Ladehoff suggested that even local companies like MARSHALLTOWN and Emerson could utilize the center.
Tim Bradbury asked if the fans would result in more blowing snow for residents and whether the area was developed specifically for Swarm, and Atefi said Iowa was actually considered one of the best climates for data centers. Erin Carpenter called Atefi's support of the moratorium a paradox given his presentation at the meeting, and he said he was not trying to "sneak in" or do anything untoward. Carpenter wondered why he didn't simply wait until after the moratorium to purchase the land and cited the potential for being grandfathered in with vested rights.
"There's nothing about this presentation that's legally binding. It's not in city code. It's Power Point promises. It doesn't mean anything legally," she said.
City Attorney Steve Leidinger, who attended the meeting in person, said vested rights only apply in situations with explicit governmental approval before a new council or board comes in and attempts to shut it down. Carpenter urged the council not to go into closed session if there was no actual real estate deal to be made.
Bauder asked Atefi for "specific names" on his investors, anticipated annual income, and his long-term plans for the site including decommissioning, and he said the investors were primarily the country's largest private equity firms. Sarah Neuroth asked if he had any completed projects, and he said his team had built about three gigawatts of data center projects. Because Swarm is a relatively new company, none are currently operational, and there are "a few" at various levels of preconstruction and predevelopment.
"Data centers are not new to us. Small ones are," he said, noting that his past projects included 270 megawatts in Illinois, a 600 megawatt project in Texas, a 370 gigawatt project in Phoenix and a few smaller ones in California.
Maggie Valentine told Atefi his proposal sounded "as good as we could hope for" if he was to be believed but felt the best way to prove it would be to stop until the moratorium is finished and regulations are in place. April Long urged those at the meeting to read the newspaper in Marshfield, Mo. and said the job numbers at the data center there -- 15 employees -- didn't match up to his projections here.
Thompson asked Leidinger if he could speak on confidential information the council had to counter claims made during the meeting, and after he was cleared to do so, Thompson explained that Atefi had made an offer before the city countered with an offer pushing the date back beyond the moratorium.
"So you guys are exactly right that we're willing to sell the land. We're just wanting to wait until the moratorium's over, and we're back here tonight because Amir did not agree to our counteroffer," Thompson said.
Swarm has made another counteroffer, and Thompson argued that Atefi didn't trust the council not to sell the land out from under an interested party. Ladehoff then banged his gavel and shut down the conversation.
From there, the council considered a motion to enter closed session regarding potential litigation with Yepez-Gomez abstaining due to being the "affected party." Records from the most recent Iowa Public Information Board (IPIB) meeting indicated he filed a complaint alleging that a closed session held on July 27 violated the state's open meetings law. That motion failed 4-2 with Thompson and Mitchell voting no due to the need for a ⅔ supermajority, and the council then moved on to voting to enter another closed session regarding the purchase or sale of real estate. That vote also fell short of the needed supermajority with Thompson, Mitchell and Yepez-Gomez opposing entering the closed session.
With a motion and second to then discuss the second matter in open session, Fonseca argued that it would not be in the city's best interest because it could hurt their negotiating position, and she felt an "actual real estate attorney" should be looking at the documents.
Leidinger responded that he is a "real attorney" and a real estate attorney who personally handles all of the city's real estate transactions.
"I still think that we should have somebody else look it over," Fonseca said.
A subsequent motion to discuss the matter in open session failed by a 5-2 vote with Nichols and Schneider in favor.
In other business, the council:
Approved the consent agenda as listed.
Approved the appointments of Marty Wymore to the Planning and Zoning Commission and Robert Thomas to the Water Works Board of Trustees.
Approved a 5-day Class C Retail Alcohol License for Midnight Ballroom for a rodeo on Oct. 17 at the Central Iowa Fairgrounds and 5-day Special Class C Retail Alcohol Licenses for Lucky Wife Wine Slushies for Oktemberfest from Sept. 24 to Sept. 27 and Thirsty Pigs LLC for Oktemberfest from Sept. 24 to Sept. 27.
Approved a resolution for a 28E agreement with the Marshalltown Community School District for shot put and discus facilities at West End Park.
Approved the second reading of an ordinance amendment regarding weapons on snowmobiles and ATVs by a 6-1 vote with Cahill opposed, and subsequently voted to waive the third reading.
Approved the second reading of an ordinance amendment regarding the percentage of window tint allowed and waived the third reading.
Approved the second reading of an ordinance amendment regarding permitted time frames for fireworks usage and waived the third reading.
Approved the first reading of a zoning amendment for 707 E. Linn St. and 205 S. 8th Ave. as part of the MARSHALLTOWN Company expansion project.
Approved an ordinance repealing and replacing Section 50.027(B) of the city code regarding collection vehicles.
Voted unanimously against the potential annexation of 2342 Odessa Dr.
Contact Robert Maharry at (641) 753-6611 ext. 255 or rmaharry@timesrepublican.com.