Missouri: Data Central

PUBLISHED AUGUST 2023

From coast to coast, 10 markets account for nearly half of the estimated 2,500 data centers in the U.S., generally clustered in along the Pacific Coast—from Los Angeles to Silicon Valley, Portland and Seattle—to an East Coast stripe running through New York, New Jersey and the nation’s capital, then south to Atlanta.

Missouri isn’t a part of that conversation—yet. But billions of dollars of data-center development and investment are quickly changing the tenor of that conversation, with the Kansas City region, in particular, elevating its status to what industry observers call the “secondary markets.”

And the glide path indicates the Show-Me State is about to flex some serious muscle in that space. A combination of factors increasingly makes this region top of mind for global IT interests scouting out locations for massive data-server farms. The reasons are easy to understand: We have land—lots of it, and underpriced when compared to the coasts; we have a stable, affordable electric supply dominated by two major electric utilities, each of which has a nuclear generating station in its arsenal; and we have a rock-solid telecom infrastructure; and we have the workers able to fill positions quickly.

Perhaps the most impressive dev-elopment to date in that sphere, measured by the planned capital investment, is the announcement by Facebook parent Meta that it would invest $800 million into a 1 million-square-foot hyper-scale data center at the rising Golden Plains Technology Park, a few miles north of Downtown Kansas City. 

That, however, might be the tip of a very big digital iceberg: A company official said Meta is evaluating a buildout that could total a staggering $40 billion in land acquisition, construction, and development of a larger data center campus over the next two decades.

To put that into perspective, the Cerner Corp.’s south Kansas City Innovations Campus, originally projected to run $4.65 billion when it was announced in 2016, was billed as the largest development in the history of Missouri. Oracle’s acquisition of Cerner last year calls into question whether the full project will be completed as envisioned, but even if it is, it would be dwarfed—eightfold—by the numbers Meta is throwing around.

Kansas City, in fact, has been ranked the third-fastest-growing tech market in the U.S.

The reasons for the current wave of optimism are many. For one, the state already employs more than 56,600 people in the IT sector, according to figures from the Census Bureau, and the broader technology sector accounts for 100,000 jobs. Bisected by the Missouri River and straddling the Mississippi, Missouri sits atop small oceans of water needed to cool those concentrations of servers.

And it already has a head start in supporting global-scale data enterprises, such as St. Louis-based World Wide Technology (annual revenues: north of $17 billion), and more recently, the addition of the National Geospatial-Intelligence Agency’s $2 billion headquarters coming online in St. Louis.

Drilling down a bit on the growth factors, we see that:

• Energy rates in the state are considerably lower than national averages—by 24 percent for Ameren, which generally serves the eastern half of the state. Compare its $13.4 cents per kilowatt hour charge with the 19.3 centers per kwh in New York, or the 19.9 cents per kwh levied in California—when the grid there is operating. Or, near the top of the scale in the lower 48 states, the 21.1-cent rate in Massachusetts. When you consider industry estimates that as much as 70 percent of a data center’s cost is eaten up by power, the calculus tilts quickly in Missouri’s favor.

• On the talent site, the Missouri Department of Higher Education and Workforce Development says more than 338,496 students are currently enrolled in four-year and two-year higher education programs. That allows the state to turn out more than 4,600 engineers every year, from undergraduate to Ph.D. levels.

• Missouri really shines when you look at a combination of land prices for these sprawling facilities—and cross-tab that with the population (read: worker availability). According to Landsearch.com, the Show-Me State ranks 18th in average price per acre of land statewide, at slightly more than $12,700 per acre. That ranking precisely matches the state’s order among states by population. Why does this matter? Because of the 17 other states with lower land prices, only one—Tennessee—had more residents. You can build cheaper in Wyoming, but who’s going to run the place?

Gov. Mike Parson sums it up best. As he said during the Meta announcement in Kansas City, “The Show-Me State stands out as a rising technology hub due to our strategic location, skilled workforce, and prime business climate. This unprecedented investment signals Missouri is open for business and that our state is a prime destination for high-tech leaders and innovators alike.”

Other factors at work? Connectivity. Tim Cowden, CEO of Kansas City Area Development Council, says this market is “the most connected region in the U.S. with more than 5.5 million miles of fiber deployed. Even physical security comes into play, as there’s less risk of natural disasters in the state.

With those factors in mind, major players in the tech field are making big moves in Missouri.

Google is one of them. It has already acquired nearly 350 acres in and around the Kansas City Northland’s Hunt Midwest Business Center. As that process unfolded, Port KC authorized up to $25 billion—yes, with a “b”—in privately backed Chapter 68 bonds to cover property tax exemptions with a 35-year life span.

Hunt Midwest has been a leading driver of growth in this space. Its SubTropolis Technology Center offers the infrastructure needed to operate large-scale data-center operations, with ample power supply and redundant systems, diesel generators, and a pair of electrical substations. The site has millions of square feet available for expanded data centers.

Construction has also started in the Northland on a project involving Edged Energy, the regional utility Evergy, and locally based design/construction giant Burns & McDonnell. When that one goes online in 2024, it will deliver one of the highest megawatt capacities of a facility in the region.

Across the state, the Contegix data center in St. Louis offers 200,000 square feet of operating space, with built-in power and cooling redundancy and a 100 percent uptime guarantee for clients. St. Louis also offers a colocation facility called 365 Data Centers, with year-round connectivity, power, cooling, and security services. A strong selling point: after a decade in operation, the company had a 100 percent uptime record.

Assets like those have drawn major corporations like Walmart, Bank of America, and IBM, which have placed mission-critical servers here. State officials say that has has produced a multiplier effect with other companies adding operations here.

Those attributes were key factors in the federal government’s decision to site the Geospatial project in St. Louis, which is also home to the Ascent STL1 Data Center, with 88,000 square feet of server space on a sprawling 15 acres. More recently, TierPoint rolled out a $20 million data center in Maryland Heights, landing as a tenant one of the region’s biggest IT players, World Wide Technology.