Best known as America’s historic brewing capital, St. Louis is seeking to reinvent itself as a regional tech hub by rolling out the red carpet for a sprawling new technology park anchored by a giant data center—a project that has drawn public backlash and triggered legal battles.
A city of roughly 280,000 people, St. Louis already hosts more than a dozen operational data centers, with three more currently under construction in the area and up to 10 more in various stages of planning.
The most visible and controversial of the projects in the pipeline is the 120-megawatt, 525,000-square-foot hyperscale facility slated for Midtown St. Louis. The chosen site previously housed a Macy’s and Famous-Barr warehouse adjacent to the historic Armory building.
The data center, co-developed by TeraWatt Infrastructure—a San Francisco–based company that specializes in commercial electric vehicle-charging networks—is envisioned as the linchpin of the privately funded $3.1 billion Armory Innovation District.
Sitting alongside Interstate Highway 64, the long-vacant Armory building, which previously housed a tennis training center, an entertainment complex, and a sports venue, is poised to be converted into 214,500 square feet of high-tech office and creative space.
According to developer statements, the district project will create more than 1,000 temporary union construction jobs and 200 permanent on-site positions. Prohibited from seeking tax abatements, the Armory center is projected to generate $432 million in tax revenue over its first decade, with nearly half of that amount going to St. Louis public schools.
Innovation vision for Midtown
If development proceeds on schedule, construction will get underway in August 2027 and conclude by late 2029. Supports of the project say it will give the local economy a shot in the arm.
“Data centers allow communities to repopulate the middle class,” Ron Kitchens, CEO of Greater St. Louis, the metro’s leading economic development organization championing the Armory project and other local data centers, tells Realtor.com®.
According to Kitchens, data centers like the TeraWatt development are a boon to the local housing market because they create well-paying jobs for local residents without consuming land that could have been used for residential construction.
“We have housing demand coming on because we have electricians making $80,000,” argues Kitchens. “Families that could not talk about homeownership now have access to it.”
Both the Armory Innovation District and the adjacent data center have secured key municipal approvals, including a conditional use permit and a community benefits agreement. Under that agreement, developers are required to contribute $15.75 million toward infrastructure, digital access, job retraining for workers affected by artificial intelligence, and environmental justice activities.
However, opposition to bringing a hulking data center to Midtown St. Louis remains fierce, setting the stage for legal action on both sides.
In August, opponent groups filed a lawsuit challenging the project’s use permit, claiming that the decision to grant it was made “contrary to law.”
“These hyperscale data centers are not welcome in St. Louis, and the residents are going to continue to fight tooth and nail at every chance we get to stop them,” plaintiff Kerry McCullen told St. Louis Public Radio at the time.
Fellow plaintiff Daniel Pate claimed that potential negative health and environmental risks related to data centers were not thoroughly studied and taken into account before the project was green-lit by the city.
“The city is bending and twisting themselves into pretzels to try to get this thing through,” Pate said.
Developer strikes back
Just weeks later, TeraWatt, the company behind the Midtown data center, filed its own lawsuit against the city of St. Louis, reported St. Louis Public Radio.
In the complaint, TeraWatt partner David Lambiaso alleges that two conditions the Board of Adjustment imposed as prerequisites for the construction are illegal and exceed “the scope of authority” of the board.
According to the lawsuit, forcing the data center to use 2.4 MWs of renewable energy would be “practically impossible” on the 11-acre site.
Lambiaso also took issue with a provision requiring the city’s Board of Aldermen to approve the community benefits agreement.
Widespread pushback
The rapid expansion of data infrastructure necessary to support AI buildout has been highly controversial, drawing widespread opposition over surging residential electricity rates, grid strain, high water consumption for cooling systems, noise pollution near residential areas, as well as a broader distrust of AI itself.
The technology remains unregulated at the federal level, despite recent high-profile appeals for guardrails and safety controls from industry leaders, including Anthropic’s Dario Amodei and OpenAI’s Sam Altman.
In May, Gallup’s first poll on data center construction found 71% of Americans oppose AI data centers in their local area.
On the housing front, a recent Realtor.com report revealed that the share of U.S. home sales near large data centers has more than doubled since 2018 as the number of these facilities grew more than sevenfold.
Economists forecast that by the end of next year, more than 2% of all home sales will take place within 5 miles of a large data center.
In good news for homeowners, the analysis found that home prices near newly operational data centers rise in line with comparable neighborhoods that did not welcome a data center.
Local reform
In response to local protests and following months of heated debates, St. Louis in September enacted a set of rules restricting future data center construction and operation within city limits, reported the station KSDK.
Signed into law by Mayor Cara Spencer, the legislation establishes buffer zones between data centers and sensitive areas like residential neighborhoods and schools, imposes caps on noise levels, and requires facilities to transition to renewable energy over time.
Alderwoman Anne Schweitzer, who co-sponsored the bill touted by Spencer as “nation-leading,” acknowledged that while the rules provide important safeguards, they fall short of addressing every concern.
“It doesn’t stop data centers from being allowed in the city of St. Louis,” Schweitzer said. “It doesn’t prevent every single harm that could be caused. It doesn’t protect ratepayers from the increases in their utility bills that we should expect.”
Kitchens, however, believes that AI and data centers have been built up in the public imagination into “a bit of a bogeyman.”
According to the Greater St. Louis CEO, water depletion is no longer an issue in modern facilities due to the use of closed-loop cooling systems and regulations are in place protecting ratepayers from bearing data centers’ energy costs.
“The people that we care about need jobs,” he says. “Data centers are the future.”
While Kitchens acknowledged that people’s anxiety about the impact of AI on their employment is not unfounded, he believes the technology will create new opportunities that never existed before. Consequently, stalling local development is a losing strategy.
“Should there be regulation of AI? Probably, but not building a data center in Missouri and building in Taipei or Chile doesn’t stop AI. It just stops prosperity,” he argues. “We’re going to lose twice.”