Data Centers as Tech Infill – A Viable Tool for Downtown Saint Paul’s Revitalization

Downtown Saint Paul faces a challenge shared by cities across the country: too much vacant office space and too few tools to put it back to productive use. With office vacancy hovering around 37%, nearly one in three square feet downtown sits empty. At the same time, declining commercial property values have reduced Saint Paul’s commercial and industrial tax base by roughly $1.5 billion since 2023, placing greater pressure on homeowners, businesses, and city budgets.
 
As the City Council considers policies related to data centers, it is important to distinguish between two very different concepts: hyperscale data centers and “Tech Infill.”

Tech Infill is the adaptive reuse of portions of existing downtown buildings for data centers, cloud computing, and AI infrastructure. Unlike large, hyperscale developments, Tech Infill occurs inside existing buildings, often utilizing underused basements, storage areas, or vacant commercial space. It represents a redevelopment tool—without consuming new land.
 
The strongest proof point is just across the river in Minneapolis. The former Sleep Number headquarters recently underwent a major data center expansion, attracting more than $70 million in private investment. The building’s value increased dramatically, and its annual property tax contribution is projected to rise from roughly $250,000 to as much as $2.2 million. Importantly, the data center occupies only a portion of the building, while other uses remain in place.
 
For Saint Paul, Tech Infill can support a multi-prong downtown revitalization strategy. Not every office building is a good candidate for housing conversion, and many redevelopment projects struggle to secure financing. A data center located on lower floors – potentially otherwise unusable space - can generate revenue and lender confidence that help support residential, retail, or office uses above. 
 
Saint Paul leadership is focused on attracting new forms of investment and finding productive uses for underutilized buildings. Tech Infill needs to remain an available tool. The conversation – and potential policy considerations - should be centered on conditions and guiding principles for data centers, to capitalize on these opportunities, not on sending the wrong message that Saint Paul is closed to investment through a one-size-fits-all moratorium.
 
See you in the trenches,
B

---

Don't Miss These Events: