New documents obtained by St. Louis Public Radio revealed the proposed data centers at the shuttered Armory building in Midtown would cost roughly $1.5 billion.
That cost rivals the $1 billion, 440-acre data center proposed in St. Charles that recently prompted the city to enact a 1-year moratorium on new data center applications.
A proposal to create an “Armory Tech District” at the site of the now shuttered “largest bar in St. Louis” would see $700 million in equipment purchases and $600 million in new construction,
The new details come as public pushback on data centers in St. Louis grows. In recent weeks, aldermen and community members pushed back on the Armory proposal. A petition calling for a year-long moratorium garnered 600 signatures in a week.
The proposal document obtained by STLPR outlines developer THO Investments and Simms Building Group’s pitch to the city, calling the project an economic development machine that could act as a “catalyst” for technology sector growth.
The document states, if approved, the project would take roughly three years to complete and serve as one of the largest private development projects in recent St. Louis history. It would see the closed Armory, once known as the city’s “largest bar,” and its exterior parking lot transformed into data centers.
“This investment into critical data infrastructure highlights St. Louis as a premier tech destination,” the proposal read. “It additionally addresses a market gap for large users with critical data processing requirements.”
Developer Rod Thomas, who manages THO Investments, told STLPR Wednesday his company is working on answering a 44-question survey from the city and that he’d be able to answer specific questions on the project when that process is finished.
He called the Armory “extremely well located” for a data center.
“It's between the two biggest medical campuses, certainly in the city and close to a lot of other organizations that need high speed, low latency data,” he said.
Thomas asked for a continuance for a scheduled conditional use hearing on the project earlier this week. He said he and his partners needed more time to answer the city’s questions.
Document boasts economic benefits
Within the proposal document, the developer states the project would create significant tax revenue for the city, estimating a total of $304 million in revenue over 10 years — $182 million of which would go to the city and an estimated $82 million to St. Louis Public Schools. That’s a combination of permit fees and real estate, personal property, utility, sales and use and earning taxes.
However, it's not clear what tax incentives may be included in the proposed project or what existing tax incentives from the original development will carry over to the new project. Those details could offset the actual impact on the city’s tax base.
Thomas declined to comment on what incentives his company might pursue or exist for the project until the city’s questions are answered.
The original Armory development holds a 15-year tax abatement — meaning the property won’t generate property tax revenue for the city or schools until the abatement ends. Cities use abatements and other taxing incentives in an effort to attract developers, but those incentives typically mean the city, schools and other services don’t immediately see a benefit from the project.
What’s more, a 2017 law made some data centers in Missouri eligible to receive an exemption on sales and use taxes on purchases for new projects or expansions to data centers.
Through a 2017 redevelopment plan, the Board of Aldermen granted the Midtown Redevelopment Corporation control of projects within its boundaries — creating a smaller agency operating much like the St. Louis Development Corporation.
It’s up to the Midtown Redevelopment Corporation to decide what incentives the project might receive and whether or not public hearing will be held on the project.
On Tuesday, Board of Aldermen President Megan Green acknowledged that decision making on those incentives are up to the corporation and called on it to hold public hearings. She said Wednesday she had not heard back.
"I am hopeful that they will do public hearings,” Green said. “ I think that's really necessary for a project like this."
The Midtown Redevelopment Corporation did not respond to a request for comment.
Beyond tax benefits, the development proposal states the project would create 250 to 300 “high-skilled” technology and engineering jobs over five years, boost the region's construction industries and address a “critical market gap” for large data users.
The proposal calls the project a $1.5 billion investment into St. Louis.
A lawyer for the company behind the proposed St. Charles data center said it would be more than $1 billion of investment. The project was planned on 440 acres near Highway 370 and would have included multiple buildings to house computer systems.
After public backlash, the company building the project pulled an application for a permit, saying it would work to revise its proposal and come back to the city for approvals.
The St. Charles data center proposal was described as “hyperscale,” which is the largest type of data center. At a similar price point, it’s possible the Midtown data center would also be among the largest data centers in size.
Documents obtained by St. Louis Public Radio linked Google to the development.
In the Armory proposal, developers say multiple "qualified tenants" under confidentiality agreements are evaluating the sights, mirroring practices used at other data center developments including the St. Charles proposal.
Project claims data centers will not cause power rates to rise
In the proposal document, the developer says the project will not raise consumer electricity rates. It states that the project must directly pay for the equipment and costs for constructing the infrastructure required to extend service to the project.
But in public documents, electric utility Ameren has said it will have to build new power plants to power data centers moving to its territory. Its initial proposal to create special rates for those data centers could cause other customers’ bills to rise by millions, according to staff from Missouri’s Public Service Commission.
The document did not list new power plants as a potential energy cost the Midtown development would pay for. New power generation is extremely expensive, and the cost for that generation is typically spread among existing electricity customers through rate increases.
A memo presented to the city’s Planning Commission earlier this month urged the St. Louis officials to “rapidly” put into place new rules on data centers or enact a temporary ban on new proposals as the city staff further research concerns over data centers.
After initial discussion, Mayor Cara Spencer signed an executive order in lieu of a moratorium. She said the city needed to remain “open” to new data center proposals. Green and Alderwoman Anne Schweitzer helped form the executive order.
However, on Wednesday, Green said a moratorium on data centers is not off the table following a noticeable public outcry over the proposed Armory project. She said, however, it wasn’t clear if there were enough votes at the Board of Aldermen to pass such a ban.
Public pushback grows
Meanwhile, pushback from community groups and one member of the Board of Alderman continued this week.
A petition from the Eco-Socialist Green Party of Eastern Missouri garnered around 600 signatures calling for a year-long moratorium on data centers in St. Louis.
Lauren Filla, treasurer of the group, said a growing number of city residents want a temporary or permanent moratorium on data centers. She called Mayor Spencer’s executive order a “side step” to avoid a ban.
“Everybody has seen how harmful these data centers are,” she said. “There's really no good justification for inviting something into our city that will deplete the water supply and increase the electricity bills of Missourians.”
The petition, “No More Data Centers in St. Louis,” calls on the city to enact the formerly discussed moratorium to give time to city staff to investigate the “impact of data centers on St. Louis.”
Filla said the current Armory proposal lacks transparency from the city and the developer.
“This is exactly what we predicted would be, that there would be kind of a diluting of the opinions and voices of the residents into these areas and away from city leadership,” Filla said. “We don't want them to pass the buck … city leadership needs to take accountability for keeping St. Louis protected from these monstrosities."
When asked about pushback, Thomas said he hopes to spend time engaging with city stakeholders.
“We're going to spend some time engaging with the stakeholders and trying to do a better job of explaining the project,” Thomas said. “I think we can dispel a lot of the concerns by just doing a better job of communicating.”
Ward 9 Alderman Michael Browning also pushed back against the proposal, calling it “short-sighted” and a move that goes against the momentum in Midtown.
“It has the potential to be detrimental to the entire City through its lack of vision, its questionable economic benefit, and its intensive energy and water demands,” Browning wrote.
President Green said her office and many other aldermen received a slough of complaints and concerns over data centers in the past week. She told STLPR Wednesday a “tremendous amount” of residents say they don’t want data centers in the area.
“Either they don't want data centers, or they want something that addresses concerns around utility rates and water usage and environmental impact and that they don't think that we should be moving forward with projects until those regulations are in place,” Green said.
