ST. LOUIS -- Data center developers are finding opportunity just beyond St. Louis’ suburbs, where an abundance of land and availability of power are driving demand.

One is eyeing 337 acres in Warrenton. Another, 613 acres in Gray Summit. Amazon is looking at 900 acres in Montgomery City.

Developers have floated about a dozen proposals for data centers locally over the past six months. The majority have been for hyperscale facilities, where data centers could occupy hundreds, if not thousands, of acres over time.

It’s volume that St. Louis and St. Louis County cannot deliver, even with their pockets of vacancy.

“Even 50 acres in the greater metropolitan area is very difficult to find,” said Dan Cahill, senior vice president of commercial real estate firm Avison Young.

The emergence of artificial intelligence, proliferation of government and industry moving online and growth of data infrastructure as more companies move their operations into the “cloud,” or digital storage, is creating a boom for developers. Tech and real estate experts say there is no sign of the demand slowing down: Nearly $7 trillion of data center infrastructure is expected to be built through 2030 across the United States, according to global consulting firm McKinsey.

“Demand is outpacing supply,” said Ali Greenwood, an executive director in real estate firm Cushman & Wakefield's Global Data Center Advisory Group. “You can’t bring on power fast enough.”

Experts say established data center markets elsewhere in the country, including Virginia and the Pacific Northwest, are nearing capacity with their power grids. It would take years to build more infrastructure, they add. That, combined with companies’ desire for 100- to 300-megawatt campuses — sometimes even 1 gigawatt — has forced developers to look elsewhere.

“The developable areas have hit capacity, and the substations that are supporting those areas are tapped for the next five to six years,” said Andy Cvengros, executive managing director of JLL real estate firm’s data center team. “We have people that are going 50, 60, 100 miles out from the city center. And people have started to jump towards new markets to chase power.”

Developers have keyed in on Missouri.

Electrical rates are lower here at 12.08 cents per kilowatt compared to the national average of 16.96 cents, according to Ameren. The state recently approved new rates and rules for large-load customers that use 75 megawatts at peak usage per month, such as data centers and manufacturers.

Those businesses would be required to sign a contract for at least 12 years and would have to pay upfront.

Not enough space

The St. Louis region has long had data centers. Most fit within a city block or on a few floors of a nondescript office building. One is under construction, for example, on Locust Street near downtown St. Louis.

These smaller facilities typically are located near companies and other users to minimize delays between data transfers. Now, with the explosion of the cloud and growth of AI, tech companies want the ability to grow at a fast pace. Having access to hundreds of acres gives them that.

The city of St. Louis — even with more than 20,000 vacant buildings and lots — does not have the large tracts that companies are looking for, staff with the Planning and Urban Design Agency have said.

Much of the vacancy is scattered throughout occupied blocks, streets or neighborhoods, even in North City, which has seen a rate of disinvestment compared with the rest of the city. Any one parcel is likely to have a structure that would need to be demolished or old infrastructure to replace.

The largest owner of vacant land is NorthSide Regeneration, which has more than 1,000 properties on 238 acres. The properties, however, are scattered across North City and are not contiguous, St. Louis assessment data shows.

Moreover, buying NorthSide land is likely to be cost prohibitive: Company officials have told city officials they can reclaim a 34-acre site for $33 million. In comparison, a roughly 155-acre site in Pike County is on the market for $1.2 million.

The largest data center proposed for the city would occupy 525,000 square feet just west of the Armory munitions venue in Midtown. The $3 billion, 120-megawatt facility would be adjacent to an Ameren substation, and would use less than the available power capacity, developers have said.

A spokesman for St. Louis Development Corp., the city’s economic development agency, said it is not aware of any other data center proposals inside the city.

“You’re just not going to see the hyperscale interest,” said John Warren, senior director at commercial real estate firm Cushman & Wakefield. “You just don’t have that abundance of land.”

It’s why developers are looking to more rural areas.

Rural projects abound

A Google spokesperson told the Post-Dispatch the company does not search for any empty field to build its facilities. Instead, it spends years looking for sites with the existing power infrastructure, propensity for few natural disasters, robust talent pool, room to expand for future development and local officials willing to work with the company to complete a project, the spokesperson said.

In Foristell, which straddles St. Charles and Warren counties, officials this month approved a plan to annex 216 acres of farmland for a developer who hopes to build a sprawling data center campus.

Officials in Warrenton, which has fewer than 10,000 residents, approved a plan earlier this year to build a data center on 337 acres. The plan calls for two 805,000-square-foot data center buildings and a 40,000-square-foot administrative building, along with stormwater detention basins, an electrical substation and 12 emergency backup generators.

Franklin County is facing two separate proposals for data centers:

Atlanta-based Beltline Energy is seeking to move its data center proposal from Pacific, a town of nearly 8,000 residents, to unincorporated county land. There, the company is seeking to rezone 495 acres of farmland.

In Gray Summit, Texas-based Provident Data Centers wants to build a 13-building hyperscale data center campus on 613 acres of farmland near Highway 100 and Interstate 44. While an investment estimate has not been released, officials estimate the “multibillion-dollar” campus will generate more than $50 million per year in new tax revenue for local governments. If approved, it would be the largest economic development project in county history.

Farther west in Montgomery County, Amazon is eyeing 1,000 acres for a data center campus there. Local leaders say the project could generate as much as $1.5 billion in tax revenues for Montgomery County schools, agencies and governments over the next 25 years.

A lawsuit, however, is seeking to halt the deal.

Western Missouri is getting its first hyperscale facilities up and running.

Last summer, Meta’s new roughly $1 billion, 1 million-square-foot data center campus went online in Kansas City. Nearby, Google started construction on the second building of its 500-acre data center campus. They are among the first hyperscale developments in the state.

Kansas City approved an incentive package for Meta worth more than $8 billion over 37 years. Google received bonds and a 25-year property tax break.

It is not clear what impacts those hyperscale projects could have on Missouri.

Iowa experience

About 345 miles north in Iowa, one town has lived with Meta's largest data center for a decade.

The Facebook parent bought nearly 200 acres of vacant agricultural fields in 2013 in Altoona, a suburb of Des Moines. It since has expanded to 3.6 million square feet of data centers across 603 acres, said Chad Quick, Altoona's economic development director.

“We couldn't imagine it would occupy a square mile of space,” Altoona said.

Some residential homes are nearby, but Altoona has had no noise or sound pollution complaints, he said. And though the facility does utilize a lot of water, Quick said the town's largest water user is actually a pasta plant.

Meta received a 25-year tax abatement for the project, an incentive package Quick does not believe the city would award today. He said the company makes payments in lieu of taxes and provides grants to community groups. About 1,300 construction workers have worked on the site at peak times, he said.

Altoona has not seen the full revenue generation because of the tax break, Quick said, but the campus currently is assessed at $1.3 billion. Meta also has spent millions of dollars adding new infrastructure, including new water and sewer lines, that Altoona would have had to pay for itself if a residential subdivision was built instead, Quick said.

That has attracted more industrial development from other companies, and Altoona has been able to annex additional land for growth, he said.

“Our experience is that they want to be a good partner,” Quick said. “They are not here to milk the system.”

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