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Encryption Proposal Rejected in Brainerd – Brainerd Dispatch
BRAINERD — It’s time to go back to the drawing board for a cryptocurrency mining facility that wants to land in Brainerd.
The words “devil’s spawn” were used Monday, July 2, to describe the practice, which council members say is inconsistent with the city’s master plan. Not even a 12-foot concrete wall would entice city officials. They voted unanimously to deny a temporary use permit that would have allowed the facility to operate in the industrial park.
“For me, when I know more, I do better,” City Councilwoman Kara Terry said Monday. “When it was first proposed, it may have made sense, and there was limited information about the impacts. Now we understand the impacts better and how this additional storage doesn’t fit with what I see as the right direction for the city of Brainerd.”
The permit request came from VCV Digital Infrastructure, which sought approval for outdoor storage as a primary use on the property at 1918 Thiesse Drive. The company proposed building 26 40-foot-long storage containers to house data machines and cooling towers for the operation. Council members granted the company a permit in 2022 for 12 20-foot-long containers and 12 cooling fans, but that permit expired after VCV failed to make any improvements to the land within a year of issuance.
When the new permit was presented to officials, the Planning Commission voted 3-2 to recommend denying the permit after hearing from several residents who live near the industrial park and who were concerned about the facility’s noise impact. City Council members ordered a noise study to determine how nearby residents could potentially be affected. The staff study, based on projected decibel levels and information from the Minnesota Pollution Control Agency, showed that the projected noise was within MPCA standards.
“However,” the staff report states, “there are many other factors that were not considered in this study that could increase or decrease decibel readings, such as vegetation, above- or below-average temperatures, humidity, air pressure, topography, and proximity to containers.”
Staff members recommended approval of the permit Monday night, as Community Development Director James Kramvik told the council that the permit was only for outdoor storage as a primary use, which is a permitted use in that zoning district. The permit was not specifically for a cryptocurrency mining facility, although that is the applicant’s intent.
The approval recommended by the staff was accompanied by several conditions on the permit, which would:
- Set an expiration date of one year from the start of cryptocurrency mining operations.
- Require the developer to submit a hazardous waste disposal plan for the oil used in the immersion extraction process.
- Terminate the permit upon cessation of cryptocurrency activity on the property.
- Allow only immersion mining on the site. Immersion mining is a cryptocurrency mining method where data machines are immersed in oil. This technique is quieter than open-air mining, with the only noise coming from cooling fans.
- Require that noise levels do not exceed standards set by the MPCA.
- Request that the property owner conduct an acoustical study once the facility is operational.
Spectators fill the Brainerd City Council chambers on Monday, July 1, 2024.
Theresa Bourke / Sending to Brainerd
Councilman Mike O’Day proposed an additional condition: a wall.
A 12-foot-high concrete wall around the entire property, he said, is the only way to vote in favor of the permit.
City Councilman Jeff Czeczok said he likes the idea in theory, but would prefer the requirement to be less specific and call for a sound-absorbing wall of some kind, not knowing whether concrete would be the best material for the job.
Council President Kelly Bevans and Councilman Gabe Johnson agree.
Kramvik said one condition could be additional soundproofing, although City Attorney Joe Langel disagrees.
A wall that size around the entire lot, Langel said, would require a council-approved waiver under city code. He questioned why the council would create a mandatory condition that would normally require a waiver.
“Whatever kind of conditions you put into this really have to come from your code to have a basis for this,” Langel said. “… I’m not aware of anything in the code that requires huge 10- to 12-foot noise walls.”
Langel said he did not intend to support either side of the issue, but wanted to make sure the board paid attention to all the conditions set out.
O’Day’s motion to approve the permit with the 12-foot concrete wall was defeated by a vote of 2-5, with only he and City Councilwoman Tiffany Stenglein in favor.
Stenglein then introduced another motion, to approve the permit with the conditions set by staff, but changing the permit’s expiration date to December 31, 2025. His motion did not include any soundproofing measures and died for lack of a second.
Johnson then attempted to introduce a motion, moving to approve the permit with all staff conditions and the requirement for a staff-approved sound barrier.
Czeczok said he would support the motion, despite being against cryptocurrency mining in general.
“I don’t like crypto mining at all. I think it’s the devil’s spawn. I think this whole thing is a disaster,” he said. “I’m going to support the motion because we have a job to do as council members. I don’t want to see the city suffer to protect something that is completely unknown at this time.” The permit, he added, would come with several conditions to mitigate any potential problems.
“As much as I would like to see this situation go away and never come back, we need to be accountable to our taxpayers, our citizens and our neighbors,” Czeczok said.
The third motion was defeated by a vote of 3 to 4, with Johnson, Stunek, O’Day and Terry voting against it.
Terry moved the final motion, denying the permit due to inconsistencies with the master plan and environmental and noise concerns from nearby residents.
Terry, who lives in South Brainerd, said he knows the neighborhood is noisy, with UPS trucks, the recycling plant and large beverage trucks coming and going. He said he bought the house knowing those noise factors were there and noted that the noise stops at night and usually on Sundays, while the cryptocurrency mining facility would operate 24/7. He also noted the city’s desire to attract companies that create jobs in Brainerd, which cryptocurrency mining doesn’t, as well as local contractors to build the facility.
Terry’s motion to deny permission was carried unanimously.
The applicant has the opportunity to appeal the board’s decision to a district court within 30 days.
THERESA BOURKE can be contacted at
theresa.bourke@brainerddispatch.com
or 218-855-5860. Follow her on Twitter at
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