As data centers loom, St. Louis confronts energy, equity questions

The City of St. Louis, Missouri, is grappling with how to manage an influx of data center developments, particularly those linked to artificial intelligence. While multiple large data centers are eyeing the region, only one confirmed project has emerged within the city: a facility tied to the historic Armory site in midtown, which would convert the Armory into office space and build a data center at an adjacent former Macy’s/Famous-Barr warehouse. This project, supported by a development team including Contour, TeraWatt, and THO Investments, claims it will not seek tax abatements and is expected to create 600 jobs and over $200 million for the city and schools over a decade. A conditional use hearing for this project is scheduled. Residents, including Adrian Cosby and Sylvia Kueny, have voiced significant opposition, raising concerns about the city's ability to regulate large-scale developments, potential 11% electricity rate increases, and environmental impacts. Alderwoman Alisha Sonnier and Alderman Michael Browning proposed legislation to pause new data center development until clear zoning regulations were in place; however, this bill, similar to an earlier attempt, failed to pass. Despite the failed moratorium, St. Louis officials are now considering interim zoning rules to limit where data centers can be built and require conditional use permits. The debate also involves utilities, with Ameren Missouri CEO Marty Lyons confirming multiple large data centers are planning to locate, and Ameren manager James O’Mara stating that all customers would contribute to grid expansion costs, potentially leading to long-term rate increases. Mayor Cara Spencer and business leaders emphasize the need for St. Louis to remain competitive in the technology sector and attract investment. However, critics like James Busch of the Missouri Public Service Commission and Ari Peskoe of Harvard Law School question the promised long-term benefits versus community costs. City planners, led by Rasmus Jorgensen, continue to refine regulatory approaches based on public feedback, with proposed rules to be reviewed by the Planning Commission and the Board of Aldermen.