Officials Say Data Centers Can Be Part of Region’s Growth; But It’s Complicated
Date Posted: October 16, 2025
Posted In: Environment/Sustainability, Projects,
From St. Louis Public Radio: Earlier this month, Missouri Gov. Mike Kehoe spoke in front of a crowd at an annual summit on power held by the state’s Public Service Commission in Jefferson City.
Data centers dominated his remarks.
“Big talk seems to always come back to data centers, which is a piece of the economic puzzle that we would love to have in our portfolio here in the state,” Kehoe said. “But it really is much more than that — it’s a statement of what Missouri is about and if we’re open to do business or not.”
Over the past several months, the proliferation of data center proposals in eastern Missouri has sparked public furor from communities and excitement from officials and the development sector.
At the core of the debate: the economic impact of the projects.
Opponents of new data center construction in St. Louis and other communities worry the energy-hungry projects will add to already rising electricity bills, use large amounts of water and negatively impact the environment and strain the grid.
Along with those concerns, some residents and environmental group leaders have questioned how much economic impact the projects actually offer.
Open for Business
But officials like Kehoe and St. Louis Mayor Cara Spencer insist the state and city need to be open for business and looking to attract data centers due to the potential boon to the state and city’s tax base.
“We want to be open for business,” said Spencer after city officials decided against enacting a temporary moratorium on new data center proposals. “We recognize that data centers play a role in — an important role — in the technology infrastructure that forward-thinking, forward-moving cities need to have as part of an ecosystem that can attract other types of technology companies and technology innovation to their communities.”
As the need for data centers grows during the current AI boom, states across the country are rushing to get in on the development.
“If Missouri is not out there bringing in these huge tech companies and investment, another state will, and Missouri could find itself five to 10 years from now having no tech investment because we said no to it,” said Oliver Roberts, a co-director of WashU Law’s AI Collaborative.
The AI Collaborative researches AI policy and its impact on legal practice, society and policymaking.
Benefits Can Be Massive
The benefits from data centers can be massive, Roberts said. The billion-dollar projects can inject millions into tax bases through property, sales and use taxes and create a temporary boom in jobs during construction.
He pointed to Elon Musk’s data center in Memphis, built to support social media platform X’s AI. The project is expected to produce $25 million in property taxes for the city.
For a city like St. Louis, where population drain and other factors continue to shrink the tax base, billion-dollar data centers offer an opportunity to inject millions of dollars into its coffers.
The developers of a proposed $1.5 billion data center at the shuttered Armory site in St. Louis say the project would create significant tax revenue. They estimate the project would raise a total of $213 million over 10 years for the city and its schools. That’s a combination of permit fees and real estate, personal property, utility, sales and use and earnings taxes.