St. Louis data center developers promise game-changing tax revenue. City officials want to make sure
St. Louis city officials plan to fine data center developer TerraWatt if its Midtown project, near the historic Armory building, fails to meet promised tax revenue and job creation targets. This accountability is part of a newly agreed-upon community benefit agreement. The project faces lawsuits from both TerraWatt, which claims city requirements are excessive, and anti-data center groups seeking to halt development.
St. Louis city officials are implementing stringent measures to ensure data center developer TerraWatt delivers on its promises for a $3 billion facility planned near the historic Armory building in Midtown. The city aims to analyze TerraWatt's financial estimates, which project $445 million in tax revenue over 10 years, through the St. Louis Development Corporation (SLDC), even though the project is not seeking tax incentives. Mayor Cara Spencer and other city leaders, acknowledging past conflicts with anti-data center groups and residents, emphasize the need for accountability for economic, environmental, and workforce benefits.
A recently agreed-upon community benefit agreement (CBA) between TerraWatt and city officials allows the city to impose fines if annual tax revenue projections are not met. For example, a $15,000 penalty will be assessed for every $100,000 shortfall. The CBA also mandates specific job creation targets, starting with 25 employees by the building permit's issue year, increasing to 100, with a $2,000 penalty for each missed job target. Furthermore, the city retains the power to revoke permits for uncorrected noncompliance on noise, utility, and renewable energy requirements.
Despite these agreements, the project faces legal challenges. TerraWatt CEO David Daneshforooz has filed a lawsuit against the city, arguing that the imposed requirements exceed the city's authority and hinder construction. Separately, several data center opponents have also filed a lawsuit against the city, seeking to halt the development entirely. Construction is currently slated to begin in August of next year.