Massena pauses new cryptocurrency mining

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MASSENA — The Massena Town Council has officially placed a 90-day moratorium on future cryptocurrency mining operations in the town, but some current operations shared their concerns that the moratorium would also impact them.

“I had received some correspondence from a representative of the North Country Data Center, who indicated they had a little bit of concern about the language of the moratorium because it seemed to ban all cryptocurrency mining, not just ones going forward, but those that are currently existing,” Town Attorney Eric Gustafson said during Wednesday’s public hearing on the proposal.

The law notes that the town “desires to enact a moratorium on all cryptocurrency mining operations (as defined herein) operating within the town.” The moratorium is set to expire on Nov. 30 unless it’s extended.

“The moratorium is a pretty straightforward procedure. The language is relatively clear. The idea is that we place a moratorium on any further cryptocurrency mining development while we get some regulations in place that will govern those types of facilities. The planning board had indicated, and I agreed that the code lacked any real regulatory scheme for these types of facilities within the town,” Mr. Gustafson said.

He said he believed the law was “pretty clear that this is similar to a zoning regulation and the uses that are already there, that have already started wouldn’t be affected by the moratorium. I think the law on that is pretty clear. So I’m happy with the language the way it’s in front of you and I think that will give us a little bit of breathing space so we can get appropriate regulations for the town of Massena,” he said.

He said they were receiving more inquiries about cryptocurrency mining operations, “so I think this is a good time to tackle this issue.”

Mr. Gustafson said he hopes a committee of the board would assist him in drafting the regulation.

“I can pull together some resources for the board to consider some other regulations that are out there. But I caution the board that this is a little bit of new territory. There’s not a lot of great examples of work out there that’s been done previously. So we’re in a little bit of, I don’t want to say uncharted territory, but it’s a little bit unique,” he said.

Daniel C. Ramsey, an attorney with Snider and Smith, LLP, was among those who had concerns about the language. He represents a New Mexico company, Mission Peak Computing, which closed last week on a 25-acre piece of property on the Haverstock Road.

“Their intent is to construct a high-capacity computing center that is scheduled to begin operation in February of 2022. I understand the moratorium as proposed is not going to affect their timetable for beginning operations. But being familiar with municipal law practice in some capacity, there are times when these moratoriums get extended as there are concerns from environmental groups or regulatory agencies that have to get incorporated into new regulations,” he said.

Mr. Ramsey said Mission Peak was not opposing the moratorium, but was asking two things from the board — to move as swiftly as possible in crafting the regulations, “and number two, that whatever language is put into these regulations is not so heavy-handed as to prohibit or disincentivize legitimate business interests and crypto operations coming to the area.”

He said he understood the reasoning behind the moratorium was to draft regulations that would address the placement of shipping containers.

“That’s really not what Mission Peak is trying to do. This is a substantial investment they’ve made. They intend to hire several local people to create a little bit of economic development in the area,” he said.

Javid Afzali, an attorney with Harris Beach, PLLC was on hand to represent North Country Data Center, which began operating at the former Alcoa East facility in 2018. He was accompanied by officials from the company, including the operations manager, human resources manager, facility director and Chief Operating Officer Norbert Guiol.

Mr. Afzali said the company currently employs 64 individuals, but the plan was to employ another 50 full-time employees by the end of the year. Once their build-out is complete in about two to three years, a move that’s already been approved by town officials, they hope to employ about 245 individuals.

He said North Country Data Center fully supports the moratorium to “put a stop or at least a pause on future growth development until well-thought-out, well-reasoned regulations can be put into place.”

“Where we have the small issue is really in the language. If you look at the language in both the first preamble of the local law as well as the first operative clause, what it says is that the town board of the town of Massena desires to enact a moratorium on all cryptocurrency mining operations. A good argument can be made as well if you’ve put a moratorium on all cryptocurrency mining operations, NCDC has to stop. I know that’s not the intent as what the town attorney mentioned, but that’s what the language is going to read that creates uncertainty with our business and folks who are already operating,” he said.

He suggested the board make some revisions to the language that don’t put a moratorium on cryptocurrency operations, but, as other municipalities have done, put a moratorium on public officials, planning board and zoning boards from reviewing or taking applications.

“What that really does is it puts a stop on future development because those operations that are not yet permitted can’t get permitted because they can’t be reviewed. What it does is it keeps those folks who are permitted safe from that language. If the intent is to stop the signing of future development until regulations are put in place, we’re requesting that the language and local law be cleaned up so that’s very clear and so that doesn’t cause us any uncertainty in the future,” Mr. Afzali said.

Mr. Gustafson said he believed the language he proposed would cover that uncertainty. He questioned if the town would be violating the terms and conditions of the moratorium if they received an application and opened the packet under the proposed changes.

“I don’t think there’s any way under the current moratorium that we would be able to slow down and stop their operations. I just don’t think that’s authorized by the law,” he said. “As a practical matter, I did take a look at the proposed language that they had suggested. I just don’t particularly love it. It places an onus on public officials that I don’t think is appropriate. To me, it’s a non-issue,” he said.

Town Supervisor Steven D. O’Shaughnessy agreed with Mr. Gustafson.

“I think that the language that we have here is simple and short and to the point,” he said, suggesting board members adopt the local law, which they did unanimously.

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(1) comment

SESZOO

Just a couple here How will these operations affect, our useage and cost of electricity here for the average homeowner /business owner .. 2: How much tax is collect now from the esixting companies . They seem to make a bit of money ,so shouldn't Massena and St Lawrence , be able to collect sales tax or the like.? And of course what's the long run environmental concerns as we depend on the river and surrounding area for a lot of our tourist dollars . And for the people hired are these businesses worth it to our area.?

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