A one-year moratorium on a proposed data center development project could put the city at risk from the project developer, according to a legal opinion recently given to Festus city officials.
In light of the advice, Mayor Sam Richards said he is keeping the matter off council agendas at present.
Meanwhile, one of the three Festus city councilmen who suggested the moratorium says he and his colleagues will be bringing the moratorium proposal up again.
The talk of a moratorium stems from CRG of St. Louis announcing in late 2025 its plan to develop a hyperscale data center on 361 acres north of Hwy. 67 and west of Hwy. CC.
CRG, which is the St. Louis-based data center development arm for Clayco, has estimated the cost of developing the facility at $6 billion.
In the Festus project, CRG would develop the property, and then a data center company would operate it, although no operator has yet been identified. On March 30, the majority of the City Council as constituted at the time approved a data center development agreement with CRG Acquisition.
Once the project became widely known in the fall of 2025, a public outcry emerged with many people coming to meetings to voice their concerns and demands for the project to be delayed or halted.
In the April municipal election, Karl Weekley in Ward 1, Allen McCarthy in Ward 2, Dan Moore in Ward 3 and Rick Belleville in Ward 4 won seats on the council, unseating incumbents. All proclaimed themselves either data center opponents or, at least, critics of the way Festus officials had moved the data center project along.
A recall effort against Richards and remaining sitting council members (Dave Boyer of Ward 1, Kevin Dennis of Ward 3 and Mike Cook of Ward 4) who all had a year on their terms reached their targets for signature on petitions for recall elections to be held. However, after the signatures on the petitions gained certification from the Jefferson County Clerk’s Office and the matter was returned to the Festus City Council for the next step in the process to agree to place recall elections before voters, it was blocked by votes of the council and mayor.
When Cook abstained on the recall vote on himself and there was a 3-3 tie, Richards cast the deciding vote against. In the votes to proceed with recall elections on Richards, Boyer, Dennis and Cook, McCarthy joined the incumbents to vote down recall elections on them.
Data center opponents have since vilified McCarthy during the public comment section of council meetings and online.
At a July 13 council work session, Councilmen Weekley, Moore and Belleville proposed putting a moratorium on the data center development project on the council’s July 27 meeting agenda.
But legal advice from Matt Reh of the Armstrong Teasdale firm, which the council hired to act as special counsel on the data center agreement with CRG, warned against a moratorium. Initially, the advice was given in a closed session. But on Aug. 10, a majority of the council voted to make the legal advice public.
Both Brian Malone of Lashly and Baer, the city’s law firm, and Belleville pointed to the Reh opinion when asked for comment about the proposed moratorium.
In his opinion, which can be found online at festusmo.gov/DocumentCenter/View/2495, Reh said, “As written, the duration and the substance of the draft ordinance and the moratorium appear likely to materially delay, materially burden or otherwise materially impair the ability of the developer to apply for, obtain approval of, proceed with, construct, use, occupy or operate the project. This likely violates the agreement.”
Reh also urged caution in making the matter public.
“Before discussing the draft ordinance and the moratorium in an upcoming open session or work session, I recommend that the city consult with counsel to discuss the above legal risks,” Rey said in the legal opinion, “Any public comments about the draft ordinance and the moratorium made by any employees or elected officials associated with the city may be used as evidence against the city by CRG in any action for breach of the agreement. It would be prudent for employees and elected officials of the city to address these risks with counsel before speaking publicly about the draft ordinance and the moratorium.”
When Richards was recently asked about when the proposed moratorium might appear on a council meeting agenda, he said, “We’re still doing research. At this time, I’m not going to put it on the agenda.”
He said he had no additional comment.
On Aug. 10, Belleville made a motion to make public Reh’s opinion on the matter. The motion passed with four council members voting “yes” (Belleville, Moore, Dennis and Cook). Two voted “no” (Boyer and McCarthy). Weekley abstained. The second Ward 2 seat vacated in April remains unfilled.
In an email Aug. 13 Belleville said he and other council members intend to bring up the moratorium proposal again.
“A second request by (two) or more councilmen will be made to place the proposed data center mortarium on either a future work session or on the agenda for a vote,” he said.