County Planning Board reviewing Massena cryptocurrency regulations

MASSENA – Massena city officials say they have a preliminary draft of cryptocurrency mining regulations ready, but want the St. County Planning Board to Lawrence reviewed it before taking further action.

“It is now in the hands of the St. County Planning Department. Lawrence. We have a hearing and it has been forwarded to St. County. Lawrence,” City Supervisor Susan J. Bellor said at a public hearing last week.

City Attorney Eric J. Gustafson said the document sent to the county constitutes a preliminary draft of the ordinance.

“The preliminary design is already ready. We sent it to the county for review. The District Planning Board does not have consent, but provides an advisory opinion on issues such as those related to land use regulations. That’s why the district was contacted for this purpose,” he said.

He said if any changes are made to local laws, even minor ones, another public hearing will need to be held.

“Whenever even a minor technical change is introduced, we will have to hold another public hearing before it is adopted. So that’s where we are tonight,” Gustafson said.

He said he did not expect the ordinance to be adopted at last week’s public hearing because the county Planning Board did not have an opportunity to comment. He suggested that it could be ready for the June city board meeting.

However, he added that there is one more step that he has discussed with board members.

“Then there has to be a SEQR (State Environmental Quality Review),” Gustafson said.

He said board members should be able to complete the initial phase of SEQR next month. The city will take on the role of lead agency in SEQR, he said.

“In practice, there are no agencies other than the city government that deal with cryptocurrency regulations. “It’s just us because the county is looking into it,” he said.

Meanwhile, the extension of the moratorium on cryptocurrency mining is still in force. At the previous meeting, the board agreed to extend it for another six months, until September 30.

“It could change at any moment,” Bellor said.

In drafting the ordinance, city officials worked with representatives from North Country Colocation Services, a high-performance data center located in Massena that provides colocation services to third parties using energy from a nearby hydroelectric dam and other renewable sources. Currently, it employs 85 people at the former Alcoa East headquarters.

CEO David Fogel raised his concerns about the wording during two city board meetings, noting it could impact the company’s $90 million to $100 million expansion plans.

He told the board in March that the proposed ordinance recognizes that an existing operation is taken over but does not include any expansion.

“The problem is to formulate maybe five words, “but any developments thereof will be subject to these regulations.” … This is all we are asking for to be resolved. We are asking the Council to provide clarity on these provisions tonight, to make minor amendments… to make it clear that this does not apply to us,” he added.

He said that according to the content of the proposed regulation, as a cryptocurrency mining company, if it is extended, it will face additional requirements. However, they would not apply to other businesses, such as Alcoa, if that company expanded.

He said they were not demanding any special treatment in connection with construction, noting that they would use all appropriate channels if a new construction project were to begin.

City officials first began discussing a potential moratorium in July 2018 because city regulations did not apply to cryptocurrency mining operations and they needed time to implement regulations. Sea chests and trailers raised concerns when the board adopted its first moratorium on all future operations.

Before the first moratorium went into effect, North Country Data Center, a subsidiary of cryptocurrency mining company Coinmint, began operations at the former Alcoa East plant, although city code did not apply to data centers and technology parks. Even though nothing in the code addressed cryptocurrency operations, the Massena Planning Board approved a site plan and special use permit for the operation because it was within guidelines that are part of the code.

Since then, they have agreed several times to continue the moratorium while Gustafson continues to develop local law.