As communities across the St. Louis region continue to grapple with proposals for large scale data center developments, the East-West Gateway Council of Governments is now wading into that arena, not with recommendations for or against, but as an informational resource.
At yesterday’s board of directors meeting, agency staff reviewed some of the research they had been requested to compile on the topic and unveiled a new website making it easily accessible.
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East-West Gateway director of research services John Posey mostly focused his remarks mostly around the largest, “hyperscale” data centers used by big tech firms, such as Meta, Google, OpenAI and others, as “so much of the controversy revolves around hyperscalers.”
“Demand for data centers is driven by both AI and non AI workloads, but AI is the fastest growing sector. All of this has macro economic impacts,” he explained, citing a Harvard economist’s estimate that data center investment accounted for 92 percent of the United States’ GDP growth in the first half of this year.
Posey presented the purported benefits and concerns that come with these developments based on both conversations with counterparts across the country and published articles and research: new tax revenue, high-paying end jobs, and enduring construction work (because these facilities need consistent upgrades), cast against concerns over noise, water use, electricity use, and land use. He then asked the 29-member board of directors for their comments and any information they wanted to see incorporated as well or topics explored.
St. Louis Mayor Cara Spencer was curious for a breakdown on proposed data center projects by energy provider in the state, to gain a better understanding of ones within Ameren Missouri’s footprint versus those in providers who don’t serve the St. Louis region. Researchers have linked the buildout of electric infrastructure for data center needs to higher rates for individual customers, though representatives with Ameren have said a bill passed by the Missouri legislature this year would guard against that.
“One of the biggest concerns I have is for rater payers,” Spencer said. “One of the things we enjoy as a community in the state is relatively low electricity rates. I don’t want to jeopardize this.”
St. Charles County Councilman Mike Elam drove the point further, asking if Missouri has the energy capacity now to support the new developments and if data centers were a part of those future calculations.
“Rates are one thing. I’m curious, do we have the capacity to meet the current needs that we’re expecting to have over the next five to ten years?” he asked. “And if not, what are the plans?”
Aldermanic President Megan Green asked about the potential of an AI bubble given the hype around the technology: “If the bubble bursts, what happens to that tax revenue?” she asked.
Jefferson County executive Dennis Gannon offered a less skeptical position, urging governmental leaders in the room not to sit on their hands when it comes to considering these proposals, echoing an op-ed he penned in the St. Louis Business Journal this month. Even waiting a month or two on a proposal can lead to a missed opportunity, he said.
“It can happen, I’ve seen it happen,” he said. “I like to say ‘yes’ or ‘no,’ but if I wait too long I won’t get an opportunity to do that at all.”
Gannon also argued the construction techniques for data centers today have come a long way to alleviate the concerns with water use, for example, and encouraged more information around how construction of these facilities has changed.
There was no official stance by East-West Gateway after the presentation and comments, but Posey added they plan to convene a roundtable to discuss the topic more, likely after the new year.
