St. Louis residents unleashed a salvo of concerns over a proposed data center project at the Armory during the first of two town halls Thursday night.
Steadfast City, a consultant working on behalf of the developers of the $1.5 billion project, hosted the town hall. Cecilia Dvorak, an executive planner with the consulting company, said the development would turn a vacant site into a more “active and secure investment” for the city.
However, of the more than 100 attendees who spoke during the Zoom meeting, few were excited about the project, citing concerns over electricity rates, its location, environmental issues and transparency.
“You asked what I'm excited about — nothing,” said Christina Miller, a resident in the 63108 ZIP code. “This isn't welcome here in my neighborhood.”
The developers, THO Investments and Simms Building Group, hope to create an Armory Tech District at the site of the now-shuttered “largest bar in St. Louis.” Their plan would see $700 million in equipment purchases and $600 million for the construction of two data centers — one in the now-shuttered Armory building and another in a nearby vacant parking lot.
The plan evoked a sizable public pushback over the past month and a half, sparking an executive order from Mayor Cara Spencer pushing the city to react swiftly to zoning and permitting concerns for data centers.
“I just generally don't see any good output for society,” said Gabriel Jimenez, a city resident, at the town hall. “I don't see how this benefits us. I just see more strain on the grid, more strain on the water supply, too.”
If built, the data centers would be the largest and most expensive yet in the St. Louis region. Documents obtained by St. Louis Public Radio revealed the proposed data centers at the shuttered Armory building would cost roughly $1.5 billion.
Dvorak and representatives of Ameren, the Midtown Redevelopment Corp. and other experts working on the project provided new information after hearing concerns. This included the expectation that it would generate around 600 construction jobs and an estimated $8.3 million in jobs after construction is completed.
Additionally, Dvorak and a representative with a company that would provide cooling systems for the project said a high-efficiency closed loop will decrease the water use by 90% to 95%.
When asked about end users for the data center, Dvorak said there wasn’t one yet but that many users interested in the facility had signed non-disclosure agreements.
Concerns over electricity rates, environmental impact
Atop the concerns from residents were how the proposed data centers would impact already rising electricity rates. Dvorak said the project will not lead to rate increases for customers in the city, but many residents pointed to other communities where energy rates skyrocketed after data center developments were completed.
“We're being told right now that the rates will not increase,” said Arthurine Harris, who lives in north city. “I don't see how that's even possible? How is it that we're so lucky if other people in Georgia and in Memphis weren't so lucky?"
James O’Mara, a representative with Ameren, said new legislation passed in March known as SB4 protects consumers from shouldering rate hikes from new data center development. The law requires large utilities to write tariffs for customers requesting more than 100 megawatts of energy to ensure customers’ rates don’t reflect any “unjust or unreasonable cost.”
State regulators say the new demand for energy for data centers across the state will require expensive new power plants. According to the Missouri Public Service Commission’s director of industry analysis, Ameren’s proposal for new large data center rates could raise electric bills by an estimated $22 million per year.
Attendees repeatedly brought up concerns over water use, as well, citing the well-documented high level of water use at data centers throughout the country. A representative with the company providing cooling systems to the project said the data centers at the Armory would use far less water than larger sites that host companies like Google or Meta.
Questions linger over tax incentives
Attendees said they are concerned about the project's true economic impact on the city’s tax base as well, citing a lack of transparency on tax incentives for the project.
The developer states the project would create significant tax revenue for the city, estimating a total of $213 million over 10 years. That’s a combination of permit fees and real estate, personal property, utility, sales and use and earning taxes.
"Of the $213 million in tax revenue expected in the first 10 years,” Dvorak said. “More than 82 million would go directly to the St. Louis public schools, and more than 91.7 million would go to the City of St. Louis.”
Nick Hartzler, a senior project manager with Steadfast City, said the developers do not “currently plan” to seek local tax breaks but could apply for a state program that allows certain data centers exemptions on sales and use taxes.
“There have not been thoughts or any discussion about local incentives for this project, but if there were, I’d want it to be a very open process,” Hartzler said.
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.
It is still unclear how the original Armory development’s 15-year tax abatement will impact the project. If the project received an abatement or the current abatement stands, the property will generate significantly less property tax revenue for the city or schools until the abatement ends. That development opened as an entertainment venue in December 2022 and closed in September 2024.
Project’s future is unclear
The future of the project still lies in the hands of city officials. To build the data centers at both parcels, the developers must gain a conditional use permit through a hearing. A hearing scheduled to take place earlier this month was postponed.
Developer Rod Thomas, who manages THO Investments, previously told STLPR that his company requested a postponement to answer a 44-question survey from the city required by Spencer’s executive order. He said that when completed, he plans to request the permit again.
Meanwhile, skepticism and opposition to the project and others like it grow in the city. In recent weeks, members of the Board of Aldermen and community members pushed back on the Armory proposal.
Ward 9 Alderman Michael Browning called it short-sighted and a move that goes against the momentum in Midtown in an open letter.
“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.
Steadfast City will hold another town hall on Monday. That town hall will be in person at the Sheet Metal Workers Union Hall on Choteau Avenue. It starts at 5:30 p.m.
