By David Steinbach, JLL
As artificial intelligence (AI) acceleration, cloud expansion and high-performance computing reshape the digital economy, cities across the U.S. are reevaluating whether they can meaningfully compete for data center investment. St. Louis is increasingly part of that national conversation — and the reasons are structural, not speculative. With competitive power pricing, repurposable industrial infrastructure, developable land and a strengthening policy framework, the region is positioned to capture the next wave of large-scale digital infrastructure.
This moment represents more than a real estate opportunity. It’s an inflection point that could redefine the region’s industrial future if public and private stakeholders act in alignment.
Cost, infrastructure profile
Data center site selection begins with power and connectivity, and St. Louis offers meaningful advantages on both. Missouri’s industrial electricity rates continue to trend below the national average, with the state at 7.69 cents per kilowatt-hour compared with the U.S. industrial average of 8.65 cents per kilowatt-hour, according to the latest EIA data.
This is a significant differentiator for large-scale campuses with substantial, long-duration energy needs. The region’s legacy industrial and former generation sites also come with high capacity transmission infrastructure that can be repurposed, reducing both development timelines and the cost of interconnection — an increasingly critical challenge in markets facing multi-year grid upgrade backlogs.
Beyond power, St. Louis has access to abundant water resources from the Mississippi and Missouri rivers, providing a sustainable and reliable solution for the intensive cooling demands of modern data centers. This natural advantage stands in sharp contrast to water-scarce western markets where operators face rising constraints, regulatory hurdles and long-term sustainability concerns tied to cooling loads.
Connectivity further strengthens the region’s profile. St. Louis benefits from an established fiber network offering resiliency, route diversity and low latency performance, all at a lower overall land and construction cost than coastal hubs. Taken together, these factors create a compelling value proposition for hyperscalers and operators seeking scalable, cost-efficient environments for power-intensive AI and cloud deployments.
St. Louis’s location also sits at the center of the country’s cloud spine — between core hyperscaler availability-zone markets such as Iowa, Chicago/Northwest Indiana and Columbus — and adjacent to emerging metros attracting multiple 1GW+ campus commitments, including Wisconsin, Kansas City and Michigan. This geography enables diversified network architectures and pragmatic latency profiles without paying coastal premiums.
Economic impact
Data centers create economic value differently than most asset classes. They generate substantial upfront capital investment, sizable construction employment and long-term high-skill operational jobs. But their most powerful contributions come from the infrastructure they catalyze.
Substation upgrades, transmission enhancements and fiber expansions required to support major data center loads don’t just serve the facility — they strengthen the entire industrial ecosystem. Adjacent users, from advanced manufacturing to logistics operators, benefit from improved reliability, grid resilience and digital connectivity.
Although permanent staffing numbers at data centers are modest relative to capex, the recurring vendor ecosystem — mechanical and electrical services, security, IT support, specialized trades — creates durable local economic activity. And for municipalities and school districts, the tax impact can be substantial, especially when sites are converted from dormant industrial use to high-value digital infrastructure.
For regions like St. Louis, data centers provide a platform for broader long-term competitiveness.
Major policy development
A key recent milestone for the region came when the Missouri Public Service Commission (PSC) approved new rules governing large-load electricity users served by Ameren Missouri. This framework mirrors earlier actions affecting Evergy customers in the Kansas City region and is designed to protect ratepayers while enabling major industrial and digital projects.
The new tariff creates a dedicated structure for customers using 75 megawatts or more — a threshold often met by modern AI and cloud data center campuses. Key elements include:
• Higher electricity rates for large-load users, ensuring their consumption does not raise rates for residential or smaller commercial customers;
• Full cost responsibility for transmission lines and infrastructure upgrades required to serve their facilities;
• A 12-year contract commitment with a five-year ramp-up period, providing utilities with long-term visibility into load growth;
• Early exit fees equivalent to the customer’s expected usage over the remaining term — a safeguard ensuring infrastructure investments are not stranded.
In practical terms, these rules introduce financial predictability for utilities and fairness for existing customers while providing developers with clearer guidance on cost obligations.
For data center operators, the implications are twofold:
• Greater transparency about the long-term cost of power;
• An incentive to plan multi-phase developments with stable operational horizons.
This policy evolution is not a barrier — it’s a sign of a maturing market preparing for large-scale digital infrastructure.
Accelerating growth
With foundational strengths and updated regulatory clarity, St. Louis is well positioned. Further growth will come from strategic actions in three areas:
1. Streamlined permitting and clear critical-infrastructure zoning:
• Defined data center corridors shorten entitlement timelines, create consistency for utilities and reduce site-level risk for developers.
2. Targeted incentives and brownfield remediation:
• Many of the region’s best-located industrial parcels are legacy sites. Remediation support can unlock high-capacity campuses while advancing environmental goals.
3. Coordinated interconnection planning and cost-sharing pathways:
• Fast-tracked interconnection studies and predictable upgrade-phasing frameworks are now essential differentiators among competitive markets.
St. Louis advantage
As data center operators look beyond over-constrained coastal hubs, St. Louis stands out as a cost-efficient, power-capable alternative with the capacity to support large-scale digital infrastructure. Its position amid established and emerging hyperscale nodes — Iowa, Chicago/Northwest Indiana, Columbus, Wisconsin, Kansas City and Michigan — offers network adjacency and route redundancy that facilitate resilient multi-region architectures.
This central geography further strengthens the value proposition, enabling hybrid deployment strategies where major capacity anchors in affordable, power-stable markets while smaller edge nodes serve dense population centers across the Midwest.
The region must move swiftly to formalize data center corridors aligned with long-range utility planning, advance site-readiness through environmental clearance and pre-engineering and preserve transparent, accelerated permitting pathways that match developer expectations.
Equally important is building a workforce pipeline trained in mission-critical electrical and mechanical operations and maintaining close collaboration between utilities and developers to synchronize capacity planning with market demand.
If St. Louis aligns around these priorities, the region won’t simply participate in the next wave of U.S. data center growth — it will help lead it.
David Steinbach is a senior managing director with JLL. This article originally appeared in the January 2026 issue of Heartland Real Estate Business magazine.