ST. LOUIS, MO – September 15, 2026 (STL.News) Armory Data Center – One of the largest proposed private development projects in St. Louis history moved another step forward Tuesday when the city’s Land Clearance for Redevelopment Authority approved a community-benefits agreement tied to the proposed $3.09 billion Armory Innovation District.
The agreement establishes financial, employment, environmental, and community obligations for the massive Midtown project, including an estimated $15.75 million community-benefits fund, while developers continue pursuing a 120-megawatt data center and redevelopment of the historic Armory building.
The project is expected to involve more than 1,050 union construction jobs and approximately 200 permanent on-site positions, according to project and city estimates.
Developers and city officials also project approximately $432 million in tax revenue and fees during the first 10 years of operation.
Those numbers are projections, not guaranteed economic outcomes.
But unlike many major developments in St. Louis, the Armory proposal is moving forward with an explicit commitment by the developer not to seek local property tax abatements or TIF incentives for the data center or Armory buildings.
The project also remains controversial.
Residents and environmental and labor organizations filed a lawsuit in August challenging the city’s approval of the data center’s conditional use permit, meaning the development is simultaneously advancing through city approvals while facing a pending legal challenge.
No court has ruled that the city’s approval was improper.
Armory Data Center – What Happened Tuesday?
The latest development came from the Land Clearance for Redevelopment Authority, commonly known as LCRA.
The authority held a special board meeting Tuesday and approved the community-benefits agreement associated with the Armory Innovation District.
The agreement follows an earlier April 21 decision by the St. Louis Board of Public Service, which unanimously approved a conditional use permit for the data center with an extensive list of conditions.
Those requirements addressed concerns about noise, water consumption, electricity, sustainability, pedestrian access, employment, and the development’s financial impact.
The city negotiated the community-benefits framework as part of that process.
Tuesday’s LCRA action represents another important step toward putting those negotiated commitments into effect.
The development team describes the agreement as legally enforceable and says it will be recorded against the property.
$15.75 Million Community Fund
One of the most significant requirements is a developer contribution of $30 per square foot of approved data center development.
Based on the proposed project, that contribution is estimated at approximately $15.75 million.
The money would be placed into a city-directed fund intended to support projects including:
- Brickline Greenway and other multimodal transportation improvements;
- digital-access initiatives and expansion of public Wi-Fi;
- distributed-energy and weatherization programs;
- environmental-justice projects; and
- job retraining for workers whose employment may be displaced by artificial intelligence or data-center-related technological changes.
The size of the contribution distinguishes the Armory agreement from a conventional development approval.
It also directly links a project built partly to support the rapidly expanding artificial-intelligence and digital economy to programs intended to address some of the economic disruption technology could create.
No Local Tax Abatement
Another major provision may be even more important financially.
The development team has agreed not to seek local tax abatements or other local financial incentives for the data center or Armory buildings.
That is particularly noteworthy in St. Louis, where major redevelopment projects have historically relied heavily on tax increment financing, property tax abatement and other public development incentives.
The city is now moving to unwind the previous Armory TIF structure.
Alderwoman Laura Keys introduced Board Bill 74 on Sept. 11.
According to official city records, the legislation would repeal previous ordinances that established the Armory redevelopment area and special allocation fund, authorized TIF notes, and approved an LCRA redevelopment plan for property adjacent to the Armory.
The reason given in the legislation is significant:
The property is now expected to be redeveloped without tax abatement.
Board Bill 74 has been assigned to the Housing, Urban Development and Zoning Committee and had not completed the legislative process as of Tuesday.
From $600 Million to More Than $3 Billion
The Armory project has changed dramatically since its initial proposal.
Earlier versions envisioned a data center development costing approximately $600 million.
After substantial public opposition and community feedback, developers reworked the proposal.
The current plan carries an estimated investment of more than $3 billion.
Rather than placing the data center inside the historic Armory itself, the revised proposal calls for locating the facility primarily at the former Famous-Barr/Macy’s warehouse property adjacent to the Armory.
The historic Armory building would instead be rehabilitated into approximately 214,500 square feet of office space targeted toward technology and creative-sector tenants.
The change preserved the Armory building for another use while dramatically increasing the overall project’s projected investment.
Who Is Behind the Project?
The development team includes a mixture of local and outside firms.
Companies and organizations identified with the project include Contour, TerraWatt, Steadfast City Economic & Community Partners, THO Investments, ARCO, and Lewis Rice.
THO Investments provides an important St. Louis connection.
The locally based real estate development and investment company is led by managing partner Rod Thomas and has participated in other redevelopment projects around the region.
TerraWatt is a data-center development platform focused on land acquisition, power sourcing, construction, and long-term operation of data-center properties.
The company says its broader development pipeline encompasses more than 4,500 megawatts of capacity and more than 3,100 acres under control across multiple markets.
David Daneshforooz, CEO and co-founder of TerraWatt and CEO of Contour, has been one of the public faces associated with the Armory project.
David Lambiaso, TerraWatt’s co-founder and chief financial officer, has also been involved with the development.
The development team says the project combines local real estate knowledge with specialized data-center development expertise.
120 Megawatts of Power
The planned data center would have approximately 120 megawatts of capacity.
That number matters because electricity consumption is one of the central controversies surrounding large data centers nationally.
Artificial intelligence requires enormous computing capacity.
That computing capacity requires electricity.
As companies race to build AI infrastructure, utilities nationwide are facing requests for ever-larger amounts of power from data-center developers.
The Armory proposal would benefit from existing electrical infrastructure near the site, including an Ameren substation south of the property.
During the city’s April review, Board of Public Service President Rich Bradley said that discussions with Ameren indicated the 120-megawatt project was relatively manageable compared with much larger hyperscale developments being proposed elsewhere.
The project would also need to obtain at least 50% of its electricity from renewable sources within five years of beginning operation.
Annual reporting requirements are intended to allow the city to monitor compliance.
What About Water?
Water use has become another major concern surrounding data centers.
Some facilities consume large amounts of water to cool servers.
The Armory project would be required to use a closed-loop cooling system and air-cooled chillers, substantially reducing ongoing water consumption compared with traditional evaporative cooling systems.
St. Louis Water Commissioner Niraj Patel said during the April permitting process that the project’s proposed water consumption would not place it among the city’s 30 largest water customers.
The developer must also pay for a hydraulic study examining the project’s effects on the city’s water system.
If the project requires infrastructure improvements, the developer would be responsible for those costs under the city’s conditions.
The water issue is particularly important for St. Louis.
The city’s aging water infrastructure requires substantial long-term investment.
City officials have argued that adding large commercial customers could broaden the rate base supporting that system rather than placing the entire financial burden on existing residential customers.
That argument will ultimately depend on actual consumption, infrastructure requirements, and development costs.
$432 Million Tax Projection
The city estimates the Armory Innovation District could generate approximately $432.3 million in taxes and fees during its first decade of operation.
St. Louis Public Schools is the largest projected beneficiary.
Current project estimates show approximately:
- St. Louis Public Schools — $206.3 million
- City of St. Louis — $139.3 million
- St. Louis Public Library — $23 million
- Public health and social services — $21.5 million
- Junior College District — $10.3 million
- Zoo, Museum and Garden District — $9.2 million
The projected revenue comes from several sources.
Project estimates include approximately $254.5 million in personal property taxes, $104 million in real estate taxes, $61.9 million in utility taxes, $10.5 million in permit fees, and $1.4 million in earnings taxes over the 10-year period.
Again, these are projections.
Actual tax revenue would depend on the completed investment, property values, equipment installed, employment, utility consumption, and other economic factors.
The city attempted to address that uncertainty in its negotiated conditions.
The developer faces potential financial penalties if tax revenue falls substantially below specified projections.
Employment Requirements Carry Penalties
The project is expected to generate more than 1,050 construction jobs representing approximately 2.2 million labor hours.
Construction would operate under a project labor agreement involving the St. Louis Building and Construction Trades Council, AFL-CIO.
Permanent employment is projected at approximately 200 on-site positions.
About 50 jobs would be associated directly with the data center.
Another 150 positions are projected for the creative and technology office space planned for the historic Armory.
The agreement includes employment requirements extending for 20 years.
The permanent-job requirement is scheduled to ramp up, beginning with at least 25 jobs in the first year, 50 in the second, and 100 annually thereafter.
The project agreement includes financial penalties for falling short of required employment levels.
That provision matters because data centers have frequently generated debate over the relationship between enormous capital investments and relatively modest permanent employment.
A $3 billion data center doesn’t necessarily produce thousands of permanent jobs.
Much of the investment is tied to buildings, electrical infrastructure, cooling systems, servers, and other expensive equipment.
The Armory agreement attempts to address that issue by coupling the data center with redevelopment of the Armory into office space.
Project Faces Pending Lawsuit
Despite its continuing progress through the city’s approval process, the Armory project isn’t free of legal uncertainty.
On Aug. 28, residents Daniel Pate and Kerry McCullen, along with the Missouri Workers’ Center and Missouri Coalition for the Environment, filed a lawsuit challenging the conditional use permit.
The defendants include the City of St. Louis, members of the Board of Adjustment, and developer David Lambiaso.
The lawsuit followed the Board of Adjustment’s rejection of appeals challenging the permit after an extraordinarily lengthy proceeding involving approximately 11 hours of public comment.
The plaintiffs allege the Board of Adjustment acted arbitrarily, capriciously, and contrary to law.
They also contend a data center isn’t a recognized conditional use within the zoning district involved.
Environmental and neighborhood concerns raised in the litigation include electricity demand, water and air impacts, and construction and operating noise.
Those are allegations contained in the lawsuit.
A court has not established them, and filing a lawsuit does not mean the city’s approvals will ultimately be overturned.
The plaintiffs are asking the court to review the Board of Adjustment’s decision.
St. Louis Just Changed Its Data Center Rules
The Armory project has also become a catalyst for broader changes in St. Louis development policy.
The Board of Aldermen recently unanimously approved new regulations governing future data centers.
The legislation establishes specific classifications and standards for data centers, including location, noise, lighting, renewable energy, and environmental impacts.
The Armory project, however, proceeded under the city’s earlier permitting process and the separate conditions negotiated specifically for the development.
That makes the project something of a transitional case.
It is helping reshape St. Louis policy while simultaneously moving forward under the rules that existed before the new framework was adopted.
The Data Center Debate Is Bigger Than St. Louis
The Armory controversy reflects a debate occurring across the United States.
Artificial intelligence, cloud computing and digital services are creating enormous demand for data centers.
Communities see potential benefits:
Billions of dollars in private capital investment.
Construction jobs.
Property taxes.
Utility revenue.
Technology-sector development.
But the facilities can also require extraordinary amounts of electricity, occupy large properties, and create environmental and infrastructure concerns.
The debate becomes particularly complicated when data centers seek tax incentives.
St. Louis’ approach to the Armory project is therefore notable.
Rather than subsidizing the proposed development with conventional local tax abatements, the city has negotiated requirements that would make the developer pay full local taxes while also contributing millions of dollars toward community benefits.
Whether the arrangement ultimately produces the projected economic benefits won’t be known for years.
But the structure itself is unusual enough to warrant attention beyond St. Louis.
Major Questions Remain
Tuesday’s approval does not mean construction begins tomorrow.
Several major questions remain.
The pending lawsuit must work its way through the legal system unless resolved earlier.
The project still must satisfy numerous conditions.
The development team must secure the enormous capital needed to complete a project estimated at more than $3 billion.
The data center industry itself is evolving rapidly as AI investment accelerates.
Developers will eventually need customers willing to lease or otherwise use the computing capacity.
The project’s enormous projected tax revenue also depends on the development reaching the scale currently envisioned.
A $432 million 10-year projection is meaningful only if the investment, equipment and operations underlying the projection materialize.
That is why the enforcement provisions in the community-benefits agreement deserve continued scrutiny.
Target Is Late 2028
Current plans call for the data center to become fully operational by the fourth quarter of 2028.
If developers reach that target, the transformation would be substantial.
An underutilized former department-store warehouse would become part of a major digital infrastructure facility.
The historic Armory would become more than 200,000 square feet of technology-oriented office space.
More than $3 billion in private investment would be concentrated in Midtown.
And hundreds of millions of dollars in new tax revenue could flow to St. Louis taxing districts during the following decade if projections prove accurate.
The development team would also be responsible for millions of dollars in community investment and infrastructure obligations.
But those outcomes remain prospective.
The project is not finished.
The investment has not all been made.
The projected jobs don’t all exist yet.
And the projected taxes have not been collected yet.
A Project STL.News Will Continue Watching
For St. Louis, the Armory Innovation District represents both an opportunity and a test.
The opportunity is obvious.
Few private developments proposed within the city carry a price tag exceeding $3 billion without requesting conventional local property-tax abatements.
The test is whether St. Louis can capture the economic benefits of the rapidly growing data-center industry without transferring excessive infrastructure, environmental or financial costs to residents.
Tuesday’s approval of the community-benefits agreement moves the city closer to finding out.
The agreement gives St. Louis something more substantial than promises.
It establishes specific obligations involving money, jobs, infrastructure, water, renewable energy and community investment.
But agreements are only as meaningful as their enforcement.
As the Armory project advances, STL.News will continue monitoring the pending litigation, Board Bill 74, financing and construction milestones, employment requirements, utility impacts, tax-revenue projections and whether the developers ultimately deliver the benefits now attached to one of the largest proposed private investments in St. Louis history.
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Editor’s note: Economic-impact, employment and tax-revenue figures cited in this report are projections from the City of St. Louis and the Armory Innovation District development team. They should not be interpreted as revenue or employment already realized.
Legal note: A lawsuit challenging the project’s conditional use permit remains pending. Allegations contained in a civil complaint are claims by the plaintiffs and have not been established as facts by a court.
