HomeMy WebLinkAbout~Master - Packet of Communications to Council dated June 12, 2026
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MEMO
To: Mayor and City Council
From: Renee Hall, City Clerk
Date: June 12, 2026
Subject: Packet of Communications to Council
Listed below are the communications to the City Council known to staff as of June 12,
2026:
1. Staff Report, City of Ames – June 16, 2026
RE: Request from Lightedge to consider Data Center Development
on Airport Property
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Staff Report
REQUEST FROM LIGHTEDGE TO CONSIDER DATA CENTER DEVELOPMENT ON
AIRPORT PROPERTY
June 16, 2026
BACKGROUND:
On May 12, 2026, the City Council referred to staff a letter from Lightedge, requesting to
“negotiate” with City staff for the development of a new colocation data center at the
James Herman Banning Ames Municipal Airport. This type of data center is smaller
regional scale facility compared to “hyperscaler” multi-building campuses serving
national and international companies. The company is based in Des Moines. It provides
data center services for clients across a variety of industries, in facilities throughout the
central portion of the country.
Lightedge is interested in constructing a facility of approximately 100,000 square feet
within Ames. Lightedge envisions initially constructing the entire building shell and
approximately 10% of its ultimate buildout of servers. A second phase would expand the
buildout inside the building to approximately 25% of the building’s ultimate server
capacity. The third and final phase would be based upon demand and see the remaining
capacity inside the building occupied by servers.
Lightedge is interested in developing the data center on a n area of City controlled
property containing approximately 10.86 acres on Aviation Way, directly west of the
property occupied by the Sigler Companies. This area is currently farmed, but is shown
within the 2020 Airport Master Plan as land that could be used for non-aeronautical
uses. This area would be compatible with the type of industrial use associated with
operating a data center facility.
Federal Aviation Administration (FAA) Impacts:
Although it is possible to either sell or lease Airport property for a non-aviation
use, it is preferred to enter into a long-term lease. A sale of Airport property initiates
a lengthy process of federal approval. In contrast, a long-term lease requires a less
substantial approval process. In addition, leasing airport land for non aeronautical uses
allows the land to earn revenue for the Airport, as well as serve the interests of civil
aviation by making the Airport as self sustaining as possible.
According to the Airport Master Plan, prior to pursuing a ground lease with a commercial
operator for non aeronautical purposes, the City must formally request the FAA release
the land in question from its federal obligations. A land use change must also be
approved by the FAA. The proceeds derived from the land use change must be used
exclusively for the benefit of the airport. They may not be used for a non airport purpose,
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and they cannot be diverted to the airport sponsor’s general fund or for general
economic development unrelated to the airport.
LEASE CONSIDERATIONS:
The City previously leased the land currently occupied by Sigler Companies. That lease
was entered into in 1997 and continued to 2022, when the City sold the land to Mulmac,
LLC. That lease contained provisions to ensure compliance with FAA regulations, and a
rent rate schedule on a per-acre basis that provided supplemental operating income to
the Airport. City staff believes that lease would serve as a useful model for a lease with
Lightedge, if it was to be pursued.
ELECTRIC UTILITY ISSUES:
The proposed data center would be in the Ames Municipal Electric System’s service
territory. While the data center would create new revenue for the utility, there are up-
front costs and service challenges that would need to be addressed to support the use.
With unique upgrades to serve this one use, there would be costs to Lightedge for
the infrastructure in order to not burden electric ratepayers.
Staff has been informed that it is anticipated that the first phase of the project would
result in up to 3 MW of electrical demand. The second phase would follow shortly
thereafter and utilize 6 MW. The ultimate buildout of the project would demand 25 MW.
The full buildout is estimated to occur in approximately 10 years.
The proposed electrical utilization impacts several facets of the Electric Utility: 1)
Electrical Capacity, 2) Distribution/transmission network and infrastructure, and 3)
Electric rates and charges.
ELECTRICAL CAPACITY:
As reported to the City Council at the April 21, 2026 workshop, the utility is a participant
in the Midcontinent Independent System Operator (MISO) Regional Transmission
Organization. MISO requires that a participant utility maintains enough firm electrical
generating capacity to meet 109% of the peak day demand averaged over the previous
five years. Independent of this data center project, current projections anticipate demand
to grow 1% per year.
The City and Iowa State's 5-year average coincident peak demand for Planning Year
2025-26 is 148.8 MW. The “coincident peak" is the peak demand of a utility at the time
the MISO region is peaking. When the 9% reserve margin is included, plus accounting
for losses, the City/ISU combined total peak demand is measured at 166.3 MW.
The combination of Ames and ISU's generation assets and PPAs result in 165.5
MW of generation, which is 99.5% of the required capacity. By developing the
Ames Municipal Energy Center (AMEC), another 54 MW of capacity is planned to
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be installed. However, this is expected to be a replacement for the increasingly
unreliable Unit 7 (33 MW), for a net gain of 21 MW to provide for some growth
capacity within the service territory.
The adopted electric rates include assumptions of the cost for providing electric
capacity. In the event that the Electric utility is unable to cover its historical peak demand
with its generating resources, the utility purchases the difference from a quarterly MISO
auction process. If the capacity to serve this customer from the auction is costlier
than the costs embedded in the adopted electric rates, it would be necessary for
the customer to pay for the difference. This arrangement would need to be further
studied by the utility’s rate consultant and then negotiated with the customer.
DISTRIBUTION/TRANSMISSION NETWORK AND INFRASTRUCTURE:
An electrical demand the size of what is proposed for the complete buildout is not able
to be served along Riverside Drive with the infrastructure currently in place. The
distribution equipment currently in place is estimated to be able to serve a demand of 3
MW.
For the ultimate buildout of the data center project, an extension of 69 kV
transmission is needed, along with a substation to step down the voltage. Three
challenges exist with providing these facilities in the proposed location:
1. There are no nearby high voltage transmission lines on the west side of the
Airport. The nearest lines are located on the east side of the Airport, along S. Duff
Avenue.
2. Extending transmission lines is typically performed using overhead poles, which
cannot cross the airport or interfere with the takeoff and landing approaches.
Although it is technically possible to put transmission lines underground, this is
challenging and costly. There is currently no buried high voltage transmission
infrastructure in Electric Services’ system.
3. A single transmission line to the customer does not provide a backup path in the
event the line is damaged or must be taken out of service for maintenance.
Therefore, a double-circuit path is necessary.
Despite these challenges, staff’s preliminary opinion is that there are three
potential paths to provide transmission infrastructure to this site. The first would
be to extend overhead from the Duff Avenue 69 kV line to the eastern edge of the
Airport, outside of the restrictions for the approach and takeoff areas. The extended 69
kV lines would then be buried under the Airport, emerging on the west side of the
property where a new substation would be constructed to serve the data center. The
new 69 kV lines would be double-circuited (six total conductors). The buried conductors
would be very large and likely encased in concrete. It may be possible to time the
construction of this line with the anticipated reconstruction of the main Airport runway,
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which would reduce the disturbance needed to install the lines and associated
structures.
The second option is similar to the first, but instead of extending 69 kV transmission
lines under the Airport, a substation would be built east of the Airport, and several 13.8
kV distribution lines would be buried under the runways to connect to the new data
center. This approach relies on being able to site a substation on the east side of the
Airport, either on Airport property or on land adjacent. Although it involves potentially a
greater number of conductors to be buried under the Airport, burying 13.8 kV lines is
much more common and far less costly than burying 69 kV lines.
Alternatively, in a third approach, a new overhead line could potentially be extended
south of the Airport and up S. Riverside Road. Overhead line is significantly less costly
per-mile compared to underground transmission line. This approach suffers from several
challenges, however. It would require a greater length of line compared to cutting
directly under the Airport. Additionally, it would need to be engineered to meet the
clearances of the approach path for the main Airport runway. Finally, a significant hurdle
is the fact that this line would need to extend outside the City’s corporate limits. This
path triggers a lengthy approval process subject to the Iowa Utilities Commission’s
review.
Separately from the 165.5 MW of electricity that can be produced by the Electric utility
locally (including purchased power agreements), the utility has the ability to import
energy from three separate transmission lines. Even with one line down, the capability
exists to serve at least two times the historical peak demand of the utility.
ELECTRIC RATES AND CHARGES:
Once direction is provided as to the location of the customer and the approach to
serving it, staff would rely on the Utility’s Excess Facilities Charge to ensure that
the data center alone pays for the improvements necessary to serve the site (e.g.,
transmission and distribution lines, transformers, substation, etc.). These costs
would need to be negotiated in an Excess Facilities Charge agreement.
OTHER UTILITIES/INFRASTRUCTURE:
The proposed development involves the use of a closed-loop cooling system, meaning
that substantial quantities of water are not required on a constant basis in order to cool
the equipment located within. Lightedge has told City staff that it anticipates using a few
thousand gallons of water to initially fill the cooling loop, but that subsequent usage will
be only for typical domestic water needs. The cooling system uses a refrigerant rather
than relying on evaporation to perform the cooling.
The developer indicates that the property does not generate a substantial volume of
vehicle traffic. Fewer than 10 employees would be regularly working on site, with a total
of approximately 20 staff and visitors at any given time.
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The site is zoned already as Planned Industrial (PI). Although the Zoning Ordinance
does not currently explicitly define a data center use, PI is currently a zone where such a
use could be located. Later this summer, City Council will consider a text amendment
defining a data center use and the appropriate zoning districts for such a use. Due to the
location and size of this facility, staff does not anticipate any compatibility issues.
ALTERNATIVE PROPERTIES:
Staff is aware that Lightedge is contemplating alternative properties within Ames for its
project. As noted by the Planning Director in a recent memo about 300 Airport Road
(former Danfoss operation) related to a requested change to allow industrial uses, it has
been discussed as a site for a data center as well. Currently the use is not permitted at
this location by zoning.
From an electric utilities standpoint, this property is more readily servable than the
Airport property west of Sigler, since the electric transmission infrastructure would be: 1)
able to extend entirely overhead, and 2) need to be extended less than ¼ mile (as
opposed to at least one mile for the property west of Sigler. The former Danfoss
property also has available property for the siting of the necessary electrical substation.
However, this property may not be preferred by the developer due to the
modifications and/or expansion needed for it to serve its needs. From the City’s
standpoint, this site is relatively uncomplicated to serve with utilities, but its use
would result in no additional revenue to the Airport such as would exist with the
property west of Sigler.
Another location being considered by the developer is property within the Dayton small-
lot industrial park (Bailey Avenue). The site is zoned General Industrial (GI), which
would allow for data centers. Additionally, the City's development agreement for the
subdivision did not limit development to specifically smaller sites and users and a data
center would be permissible.
Of the sites discussed in this report, this property is the most challenging to serve
electrically. The clearest path to provide electric transmission service involves obtaining
easements on private property through woodlands to the west. At least two private
property owners would need to consent to the easements necessary to extend this
transmission line. However, those properties are outside the City’s corporate limits, and
therefore a lengthy approval process involving the Iowa Utilities Commission would be
triggered. In addition, this site will not generate much-needed revenue for the Airport.
NEXT STEPS:
Lightedge is actively trying to facilitate a project to meet regional customers’ needs
within central Iowa. Lightedge desires to have control of a site in the next few months to
proceed with a project. The overall implementation of the project and needed
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infrastructure has long lead times and it is highly desirable to Lightedge to know if the
City's property is in fact available so they can proceed.
If the City Council is interested in pursuing this prospect on Airport property, it would be
appropriate to place this memo on the June 23 agenda so the City Council may
consider:
1. Authorizing staff to negotiate a lease of real estate and to facilitate any FAA or
other governmental studies or approvals necessary for the development,
2. Authorizing staff to negotiate an excess facilities charge to recoup the costs of
extending electrical infrastructure to the development, and
3. Directing staff to work with the City’s electric rate consultant to develop an
appropriate rate classification for the data center that would account for the
electrical capacity required and avoid cost impacts to other electric utility
customers.
STAFF COMMENTS:
Developing the 10-acre airport property has substantial benefits to the Airport operations
budget and it would create additional tax base for the City. Staff believes that the
development challenges can be resolved in a timely and cost-effective fashion to: 1)
meet Lightedge’s needs, 2) protect the Electric Utility’s and customers’ interests, and 3)
avoid impacts to the Water Utility’s resources.
Although some data center facilities are controversial due to scale and use of resources,
a smaller regional-sized facility that is air-cooled avoids many of the negative aspects
and concerns ascribed to data centers. The Airport location is in an industrial area and
the use should be compatible with the surroundings. Other locations may not be as
compatible and may not match intended uses for other industrial areas of the City as
well as this location. Therefore, should the City Council desire to proceed with this
data center project, City staff believes the Airport location is the preferred site.
The next step would be for the City Council to place this item on the June 23
agenda for discussion.
May 7, 2025
Dear Ames City Council Members,
I am writing on behalf of Lightedge to request the opportunity to negotiate with the City of Ames
on the development of a new colocation data center at the Ames Regional Airport.
Lightedge is a Des Moines-based company with over 30 years of experience delivering secure,
reliable IT infrastructure. We serve more than 1,400 customers with a team of over 400
employees and operate data centers across Minnesota, Iowa, Nebraska, Missouri, and Texas. Our
clients span healthcare, financial services, technology, consumer packaged goods, and
manufacturing. These are industries where the stakes are high and where system reliability is not
optional.
Our business is built around the companies that anchor regional economies. We work with local
and regional enterprises in heavily regulated environments, helping them manage complex IT
infrastructure and navigate demanding audit and compliance requirements. We handle mission
critical IBM and VMware platforms, and cloud connectivity under one roof, so our clients do not
have to juggle a dozen vendor relationships to keep their operations running. The business
leaders we work with are not shopping for more technology vendors. They want fewer, local
relationships, more accountability, and a partner they can count on. That is what Lightedge
offers, and it is the kind of support the businesses investing in Ames deserve to have close by.
Ames is a natural fit for our next facility. We already serve a dozen customers in the Iowa State
University Research Park, and we have watched this community grow into a serious technology
hub. The energy infrastructure is strong, property valuations are competitive, and the city has a
clear commitment to business growth. Add in the proximity to our existing Altoona operations
and the broader Des Moines market, and the case for building here is straightforward.
The facility itself would be a single-story, slab-on-grade building designed for efficiency and
long-term sustainability. We plan to use air-cooled chillers with high-efficiency fans to manage
heat, a design that keeps noise low, eliminates daily water consumption for cooling, and uses
environmentally responsible refrigerants. We would also incorporate economizer functionality to
take advantage of Iowa's cooler temperatures and reduce energy consumption further.
From a community standpoint, we think this project is a good deal for Ames. It generates tax
revenue without adding demand for housing, schools, or other population-driven services. More
importantly, it puts modern digital infrastructure in place for the companies already here and for
the ones considering a move to Ames. Businesses making significant investments in this city
should have the infrastructure to support them. We also plan to invest in STEM (Science,
Technology, Engineering and Mathematics) education partnerships with local schools, because
we believe a project like this should connect to the next generation of people who will work in
this industry.
We would welcome the chance to sit down with the city and relevant stakeholders to discuss this
further. We are confident this can be a lasting, productive partnership for the Ames community.
Thank you for your consideration.
Sincerely,
Rob Carter
Chief Executive Officer