Data Centers and Urban Growth: Megan Green’s Vision for St. Louis

A MESSAGE FROM THE PRESIDENT

As artificial intelligence surges in popularity, data center construction has exploded, but most cities are unprepared to regulate them. In St. Louis, a high-profile plan to convert the Armory into a data center has highlighted that gap in oversight and sparked public outcry.

In this issue of Deep Dive, I’ll break down what data centers are, the impact they can have on surrounding communities, and how those issues are playing out in the debate over the Armory project.

Data Centers, Explained

Last year, the Armory—a historic St. Louis building turned entertainment venue—shuttered unexpectedly. Green Street Ventures, the owner and operator, claimed it would take “months, not years” to find the additional funding needed to reopen.  That future did not come to pass, and recently, the Post-Dispatch reported that a new developer is eyeing the property for a data center.

The public outcry has been swift.

In a matter of days, my office received dozens of emails and phone calls from residents concerned about the negative impacts data centers have on communities. Questions ranged from the project’s potential environmental impacts, to how it would affect the surrounding neighborhoods, to the lack of transparency from the developers. In response, the mayor signed an executive order setting temporary guidelines until the Planning Division and Board of Aldermen can research and pass regulations on this rapidly growing industry. Alderwoman Schweitzer and I introduced a resolution in support of the order.

These concerns aren’t unique to St. Louis. As information technology, cryptocurrency, and artificial intelligence grow as industries, the need for data warehousing has exploded. Cities across the country are grappling with how to address them, and it’s not easy. These sorts of developments require a lot of space, a lot of water, a lot of energy, and the long-term economic benefits remain unclear.

Today, (September 30th) I want to take a deeper look at data centers. What are they? What’s driving their construction? Where is the right place for a data center? Should we accept them, regulate them, or ban them altogether? I hope to answer all of these questions in today’s Deep Dive.

Without further ado, let’s dive in!

The Data Center Conundrum

Though it’s only recently entered popular discourse, artificial intelligence has been around for a long time. From social media algorithms to video games, programs that learn and adapt to human behavior are pretty common across the digital space. However, a few years ago, a subset of AI, known as the large language model (LLM), grabbed peoples’ attention. The most popular AI program today, ChatGPT, is one of many that utilize LLMs. Today, just three years into the AI boom, nearly every tech company has its own LLM—from Microsoft’s Copilot, to X’s Grok, to Google’s Gemini.

While there are a number of AI chatbots, ChatGPT is by far the most popular.

Opinions on AI and LLMs run the gamut. Tech billionaires and CEOs praise their potential and impact on productivity. Environmentalists deride them for their adverse effects on the environment. Artists worry about the precedent set by LLMs plagiarizing their work. The potential for AI to write an entire essay from scratch has teachers struggling to rework their curriculum.

No matter what they’re used for, these models require considerable processing power. To keep up with the demand, tech companies are scrambling to build data centers.

All of that processing power requires infrastructure to support it, and that can come at the expense of the people living nearby and the surrounding environment. Oftentimes, the amount of electricity required to run a data center means developers and local entities need to construct power plants just to keep up with the new demand. In Memphis, a data center owned by Elon Musk is powered by “35 unpermitted gas turbines,” polluting nearby communities. And with increased energy demand comes increased costs. In Virginia, utility costs are estimated to rise by 25% by 2030, much of which is driven by data centers opening in the state. In Ohio, new data centers have increased the average household utility bill by $15 in only the last three months.

People may not be aware, but our city is already home to 12 data centers. The reason the proposed Armory data center has garnered so much public attention is because of its location and scale compared to existing facilities in the City.  

The Armory Proposal

Decades ago, Midtown was one of St. Louis’ most densely populated neighborhoods, previously known as Mill Creek. Thanks to decades of “urban renewal” and land clearance, that is no longer the case. And until recently, much of the land sandwiched between SLU’s medical and main campuses was either vacant, industrial, or owned by railroad companies. For obvious reasons, the university sought to do something about this. In 2016, a redevelopment plan was established for the area, envisioning a live-work-play district where students and residents alike could enjoy amenities that were previously unavailable on foot.

The Midtown Redevelopment Corporation seeks to revitalize the area surrounding SLU’s campuses.

In 2017, the Board of Aldermen approved a Chapter 353 Redevelopment Plan governed by a new entity called the St. Louis Midtown Redevelopment Corporation (STLMRC) and overseen by a board made up of officials from both SLU and SSM Health. The ordinance encompassed the blighted area between the two campuses and provided STLMRC with near total authority over redeveloping it, including the power to authorize tax incentives. Eight years later, we’ve seen successes—the City Foundry, the Steelcote development, the Midtown Target, Top Golf, and, until its closure last year, the Armory.

However, with great power comes great responsibility, and I fear that the concerns that led me to vote “no” on the original redevelopment plan have come to fruition. As I wrote in a letter last week to STLMRC, its process lacks sufficient transparency, leaving residents and nearby neighborhoods in the dark on specifics and with little recourse to voice concerns. This stands in stark contrast to the Board of Aldermen, where every development is subject to committee hearings and testimony from the public.

That said, in absence of a moratorium or existing regulations, we can’t block the project legislatively. We do, however, have one mechanism to force the developers to operate more transparently. Despite Midtown Redevelopment’s authority, all projects that don’t comply with current zoning regulations must go through the conditional use process. Developers must petition the City’s Zoning Section for a variance or exception for their project. This process provides residents with an opportunity to speak in favor or opposition of the project. In the end, the Board of Public Service decides whether or not the project will be permitted to move forward. And this proposal for the Armory does have to go through this process in order to move forward.

That’s where we come in. Supported by Alderwoman Schweitzer and myself, Mayor Spencer signed Executive Order 92, which directs the Planning Office, Zoning Section, and Water Division to come up with a plan to regulate data centers going forward. In the meantime, data center developers must submit additional information to the Board of Public Service prior to their conditional use hearings. Required information includes, but is not limited to, how the project will fit into the surrounding area, square footage, the amount and source of electricity, water requirements, employment numbers, environmental impact, and tax revenue. While it may not be feasible to entirely ban these projects in the City, they should at least be transparent and conform to regulations passed through the Planning Commission and Board of Aldermen.

Setting regulations on data centers is a joint effort between the Mayor and the Board of Aldermen.

We’ve already seen this move pay dividends. A conditional use hearing for the Armory project was originally scheduled for September 25th, but the developers requested to reschedule their hearing to gather information and comply with the new guidelines. Ideally, residents will be able to see the estimated economic and environmental impacts of the project before the rescheduled hearing.

Moving Forward
As with most issues, the benefits and downsides of data centers range widely, and it means that a one-size-fits-all approach may not be the best solution. Some data centers, like a few downtown, take up a single floor of a larger building, draw sustainable energy, and are imperceptible to most residents. Others, like the one shot down in St. Charles, can take up acres of land and use billions of gallons of water, straining infrastructure and polluting densely populated urban centers.

While we iron out regulations, we should take these nuances into account. Maybe larger data centers could pledge public benefit, such as investing in water infrastructure or renewable energy. Maybe the larger projects should be located in industrial areas, while smaller ones can fit into our urban fabric with little disruption. Maybe they all need to adhere to certain sustainability requirements and consumer protections. All things we should seriously consider moving forward.

That said, whether you’re in support of them, skeptical of them, or hate them, there are ways for you to make your voice heard.

First, the Public Infrastructure & Utilities Committee is holding a hearing tomorrow, October 1st, to hear from residents on Resolution 111 (introduced by 1st Ward Alderwoman Schweitzer), which advocates for increased regulations on data center construction. Second, when the conditional use hearing for the project is eventually rescheduled, residents are welcome to submit written comments or attend and testify in person, whether for or against the project. Lastly, my office has opened a data center topic on our new engagement platform—Speak Up, St. Louis. We hope that by creating a space for residents to engage openly with one another on the issue, we can get a better understanding of what common concerns are and find opportunities for reform as we work on long-term regulations.

Regulating data centers ensures that profit and tax revenue don’t supersede residents’ quality of life. If we work together and innovate, we can turn a complicated issue into a big win for our city, our economy, and our environment.

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