Data Centers in Quad Cities
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Quad Cities – Strategic Midwest Hub for Resilient Infrastructure
Executive Summary
The Quad Cities market is an excellent choice for organizations seeking a cost-effective and low-risk central US location for disaster recovery or secondary infrastructure. Its attractive power costs, driven by a high percentage of renewables, and significant tax incentives provide a compelling financial advantage over primary hubs like Chicago. This market is built for businesses that prioritize operational stability and total cost of ownership.
Quad Cities: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A solid secondary market with good regional carrier access. |
| Direct Cloud On-Ramps | 0 — as of September 2025 | Nearest on-ramps are in Chicago; private network extensions are available. |
| Power Cost | $0.07 - $0.09/kWh, as of September 2025 | Includes a ~60% renewable mix, primarily from wind generation. |
| Disaster Risk | Moderate (43.14) — as of September 2025 | Primary risks are typical for the Midwest region; no coastal exposure. |
| Tax Incentives | Yes | Iowa offers a sales and use tax exemption for large data center investments. |
| Sales Tax | 6.00% (Iowa state sales tax) — as of September 2025 | This state-level tax can be exempted for qualifying data center projects. |
Network & Connectivity Ecosystem
The Quad Cities serves as a practical connectivity point for the Upper Midwest, offering reliable infrastructure without the congestion of larger markets.
Carrier Density & Carrier Neutrality: The market provides access to over 2 carriers across 2 data centers as of September 2025. While smaller than major hubs, this ecosystem offers sufficient diversity for most enterprise and disaster recovery needs.
Direct Cloud On-Ramps: There are no direct, in-market cloud on-ramps as of September 2025. Businesses requiring dedicated connections to cloud providers typically establish private network links to major interconnection facilities in Chicago.
Internet Exchange Points (IXPs): Public peering is limited within the immediate market. Most network traffic is exchanged through private peering arrangements or routed through major IXPs in Chicago.
Bare Metal: Bare metal server options are available, providing dedicated compute for performance-sensitive workloads. Providers like Hivelocity and ColoCrossing can service the region.
Power Analysis
Iowa's power strategy is a significant advantage for data center operators, combining low costs with a focus on renewable sources.
Average Cost Of Power: Industrial electricity rates typically range from $0.07 to $0.09/kWh as of September 2025. These competitive rates, supported by a grid with approximately 60% renewables, dramatically lower operating expenses for power-intensive infrastructure.
Power Grid Reliability: The regional power grid is well-engineered and stable. Investment in wind energy infrastructure has modernized the grid, offering reliable power suitable for mission-critical operations.
Market Access, Business & Tax Climate
The Quad Cities provides a business-friendly environment with strategic access to key regional markets.
Proximity To Key Business Districts: Data centers in the area are well-positioned to serve the region's strong manufacturing, logistics, agricultural technology, and defense sectors.
Regional Market Reach: The market offers low-latency connectivity to businesses across Iowa and Illinois, serving as an effective hub for reaching customers throughout the Upper Midwest.
Tax Advantage For Data Centers: Iowa provides a compelling sales and use tax exemption on equipment and energy for qualifying data center projects. This incentive substantially reduces the upfront capital investment and ongoing operational costs for new facilities and major expansions.
Natural Disaster Risk
The Quad Cities region has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.14 out of 100 as of September 2025. The environment is free from major seismic, volcanic, and coastal threats. Key risks are characteristic of the Midwest and include tornadoes, riverine flooding, hail, and severe winter weather, including ice storms and cold waves. These are well-understood risks that can be mitigated with standard facility engineering and operational planning.
