TerraWatt Proposes 1 GW AI Data Center at Illinois Steel Mill Site
The developer plans a 381-acre campus in Alton with closed-loop cooling and self-funded grid upgrades.
Data center developer TerraWatt has proposed converting a former 381-acre steel mill site in Alton, Illinois, into a 1-gigawatt data center campus. The project aims to redevelop the industrial property into a high-density facility deployed in 200 MW blocks, featuring closed-loop cooling and developer-funded power grid upgrades.
Key details
The proposed Riverbend Technology Center would occupy the former Alton Steel Inc. mill at 5 Cut Street in Alton, Illinois, located along the Mississippi River roughly 18 miles north of St. Louis, Missouri. The site encompasses 1.26 million square feet of mill structures alongside historical scrap and slag piles from nearly a century of industrial steel manufacturing that ceased in January 2026.
TerraWatt has entered into a contingent agreement to purchase the 381-acre property from Alton Steel Inc., with the transaction scheduled to close in 2027. The sale remains conditional on rezoning approval by the City of Alton, site studies by electric utility Ameren Illinois, and environmental due diligence. Under the proposal, TerraWatt will pay for site cleanup, building demolition, and all required local electric grid upgrades without seeking local tax incentives.
The facility is designed for up to 1 GW of total capacity, built out incrementally in 200 MW blocks. To reduce water resource demands, the campus is planned to utilize closed-loop cooling systems. If municipal approvals are granted, site preparation and demolition will start in 2027, with construction of the initial 200 MW block running from late 2027 through early 2029 and full campus operation targeted for 2031. TerraWatt currently claims a total development pipeline of 4.5 GW across 3,165 acres in eight markets.
Why this matters
The proposal highlights how AI infrastructure developers are increasingly targeting brownfield industrial properties to secure large power capacity footprints. By redeveloping heavy industrial locations that already possess historical grid access points, developers can streamline site selection while avoiding greenfield land acquisition hurdles. Furthermore, TerraWatt's commitment to fund its own grid infrastructure upgrades and utilize closed-loop cooling reflects growing industry pressure to prevent infrastructure costs and water draw from falling on local communities.
Context
Converting retired industrial facilities into hyperscale and AI compute hubs has become a prominent strategy across the US Midwest. As power grid interconnection queues extend multi-year backlogs in major data center markets, developers are looking to former steel mills, retired coal facilities, and heavy manufacturing sites with proximity to high-voltage transmission lines. Illinois has seen similar proposals aimed at capturing Midwest power capacity to support expanding AI model training and inference workloads.
Risks and open questions
The project faces several regulatory and technical hurdles before construction can begin. Key open questions include whether the City of Alton will approve the necessary rezoning determination and how Ameren Illinois's grid study evaluates the impact of adding up to 1 GW of new load to the local transmission system. Additionally, environmental remediation of a century-old steel mill site presents potential contamination risks, and TerraWatt has not yet signed anchor tenants or capacity leases for the campus.
What happens next
Alton city officials and planning boards will evaluate TerraWatt's rezoning petition and use determination in 2027. Concurrently, Ameren Illinois will complete its formal grid impact study to determine required transmission network reinforcements. If approvals are finalized, property acquisition will close in 2027, paving the way for demolition and initial phase construction starting in late 2027.
Source: Data Center Dynamics Published on AI Usage Global, author: AUG Bot
