TerraWatt Proposes 1GW Data Center on Former Alton Steel Mill Site

TerraWatt wants to build a data center of up to 1GW on a 381-acre former steel mill site in Alton, Illinois, and says it will ask for zero local tax incentives to do it.

Alton Steel updated its website this week with a link to a dedicated project site for the Riverbend Technology Center at 5 Cut Street. Alton sits on the Mississippi River in Madison County, roughly 18 miles (28.9km) north of St. Louis, Missouri.

The grid-connected project would total up to 1GW, developed in 200MW blocks. TerraWatt has a contingent agreement to buy the site from Alton Steel Inc. The sale closes in 2027 only after a use determination and rezoning approval by the City of Alton, a study of the site by utility Ameren Illinois, and TerraWatt's own due diligence.

"We know every community is unique. Our proposal for Alton puts the mill site back to work for the economy of the next century," said David Daneshforooz, co-founder and CEO of TerraWatt. "We'd pay our own way with no local tax incentives, generate millions of dollars a year in new tax revenue for the city and its schools, and be the quietest neighbor Alton has had on this site in a hundred years."

What does the project actually involve?

If Alton city officials approve, demolition and site work begin in 2027. Construction of the first 200MW block would run from late 2027 into early 2029. The campus could be fully operational by 2031.

Details from the project website:

• TerraWatt would clear the existing mill buildings and pay for the cleanup itself.
• The developer would also fund any upgrades to the local grid.
• The site could use a closed-loop cooling system (a system that recirculates coolant rather than discharging it).

TerraWatt says it is in discussions but has not signed any lease for the site's capacity. No anchor tenant is on the record yet.

Why is a steel mill becoming a data center?

The Alton mill operated for nearly 100 years. Laclede Steel, founded in 1911, once ran it and went bankrupt twice, in 1998 and 2001. After idle years following the second bankruptcy, the site sold for $1 million through a federal and state settlement, and Alton Steel was established to run operations.

In 2019, employees took possession of Alton Steel through an employee stock ownership plan (ESOP, a trust that holds shares for workers). The mill closed again in January 2026. The site now totals a reported 1.26 million square feet of mill buildings, plus numerous scrap and slag piles.

"Closing Alton Steel was an extraordinarily difficult decision, particularly given the employees and families whose livelihoods were connected to this mill," CEO Chris Ervin said in a statement. "Our responsibility now is to manage the company's remaining obligations and secure the best possible outcome for our creditors. This proposed sale represents a significant opportunity to do that while giving the property a productive future."

Who is TerraWatt?

A recently formed developer, TerraWatt claims a pipeline totaling 4.5GW across 3,165 acres and eight markets. The company says it expects to deliver 495MW across four markets by 2017, as stated on its materials.

The Alton project is not TerraWatt's only move in the region. The company is also pursuing a 120MW facility in St. Louis inside an old warehouse, branded the Amory Innovation Data Center, and hopes it can be operational by late 2028. That plan has hit friction: TerraWatt is currently suing St. Louis over conditions local officials placed on the development.

What does this change for Alton?

Potentially a lot, and on paper at least at no cost to local taxpayers. The city and its schools stand to gain millions of dollars a year in new tax revenue, per TerraWatt's own figures, with no incentive package attached. In exchange, Alton officials must first approve rezoning, Ameren Illinois must clear the site's grid connection, and a mill that shaped the city for a century comes down.

The deal isn't done. But the timeline is concrete: city decisions and closing in 2027, first block live by early 2029, full campus by 2031.