BRAINERD — The fate of a cryptocurrency mining operation in Brainerd remains in limbo.

Faced with a request for an interim use permit to build storage units in the industrial park for the crypto mining facility, the Brainerd City Council asked for more time.

Council members voted 6-1 on Monday, May 20, to extend the time they have to respond to the permit request by 60 days, allowing them to gather more information about the level of noise the operation would produce.

The vote comes after several residents who live near the industrial area spoke at the last minute

Planning Commission meeting

and they sent letters to the city worrying that the facility was too noisy and would disturb their homes.

The property is located on Thiesse Drive.

Planning commissioners last week voted 3-2 to recommend denying the permit, citing a cryptocurrency mining facility’s inconsistency with the city’s comprehensive plan.

Community Development Director James Kramvik told the council Monday that the staff recommendation was to approve the permit, as it is a land use permit, and the Planning Commission’s concerns were more about cryptocurrency mining such as activities in general compared to outdoor storage as the primary use of land.

According to city code, outdoor storage as a primary use is permitted in the general industrial zoning district with a temporary use permit. The permit allows the City Council and staff members to place conditions on the use and an end date if they choose.

VCV Digital Infrastructure’s proposal is to build 26 shipping containers housing data machines and 40-foot-long cooling towers, and plans include an 8-foot-high chain-link fence with privacy slats and razor wire around the property.

City Attorney Joe Langel said if the temporary use permit meets the standards set by city code, the applicant is entitled to the permit.

VCV Digital had a provisional use permit issued in 2022

for 12 shipping containers and 12 20-foot-long cooling towers, but which expired after one year, as the company made no improvements to the land within that period.

The company also has an energy agreement with the Brainerd Public Utilities Commission, which guarantees them electricity for the plant for the next two years. The BPU Commission approved this agreement in April after the

previous agreement signed in 2022

it expired earlier this month. While the current agreement lasts until April 2026, it will be void if VCV’s business does not use at least 15 megawatts of power by the end of 2024.

I will say that if you find me a city without sounds, without sights and without smells, I will find you a dead or dying city.

Mayor Dave Badeaux

VCV also purchased two parcels of land in the industrial park from the Economic Development Authority in 2022 and has since paid for power lines to the property for the operation. With an investment of about $625,000 already made by VCV Digital, council member Mike O’Day said he was concerned about the repercussions if the city didn’t approve the interim use permit.

“It seems like maybe the cart has been put before the horse because we now have a lot of opposition to this, where there wasn’t before,” O’Day said in a packed City Council room Monday. “But now we do it. Now it’s controversy. And I don’t know where it will end. I’m just trying to point out some tough decisions we have to make.

Council member Jeff Czeczok asked if the previous permit granted has any bearing on the current decision. While Kramvik said they should be viewed as two unique applications, Langel said the board would have to provide specific fact findings with this application on what differentiates it from the first if they were to deny it.

“The logical question that would arise would be: what’s the difference? What has changed?” Langel said.

Council member Tiffany Stenglein asked whether changes to the size and number of containers envisioned in the current permit application would be sufficient, and Langel said it depends on the zoning ordinance.

“Does this make any difference in terms of using external storage?” Langel asked. “Does it make any difference in terms of noise in the property?”

Mayor Dave Badeaux asked about any noise complaints received from Just For Krypto, another cryptocurrency mining facility located just north of Kitty Hawk Court. Kramvik said there have been no complaints about noise, noting that operations are also different in nature. The Just For Krypto operation is an open-air operation, while VCV’s would use immersion technology, meaning the mining machines are submerged in oil and the only noise comes from the cooling fans.

Board member Gabe Johnson asked if Just For Krytpo had a permit for its business, and Kramvik said the company doesn’t need a permit, as there is a main facility on their property, meaning storage all ‘open is not the main use of the land.

While the city has 60 days under state statute to respond to a land use permit request, officials have the right to extend that time another 60 days with written notice. Any further extension must be approved by the applicant.

Council member Kara Terry proposed extending the response time to the request another 60 days to gather more information about the possible noise.

“Are there other facilities, for example, in the state that have a similar setup that we could consult with to control noise?” she asked. “I don’t know what our options are … to understand what the impact of this really is.”

Stenglein said she wasn’t convinced they would have the information they needed in 60 days, but said she would still support the motion because she could be wrong.

Johnson said he would vote no, asking how they could have explored the ramifications of sound before the facility was here, not knowing exactly how much noise it would make. He said he would be more in favor of adding an end date to the temporary use permit, allowing the city to review it over a certain period of time to see if there are any noise complaints.

Mayor Badeaux, who doesn’t vote on council matters except in a tie, is concerned that the city is dealing with sound measurements.

“Who measures decibels? How are we doing that?” he asked. “…Not just how do we measure something that isn’t there, how do we measure this? I’m really concerned about the idea that the city of Brainerd wants to go ahead and start measuring the decibels of things.” .

He talked about the large shredder at Crow Wing Recycling – which he said is a great organization for Brainerd – and how loud it can be when it’s running.

“When do we start drawing the lines?” he asked her. “I want to be available to people who want to do business in Brainerd. I’m a little concerned about the city of Brainerd measuring decibel units.”

Badeaux added that the city needs to find places where things belong.

“I will say that if you find me a city without sounds, without sights and without smells, I will find you a city that is dead or dying,” Badeaux said.

The Minnesota Pollution Control Agency

enforces state noise regulations

. The state noted that noise regulations are based on statistical calculations that quantify noise levels by duration over a one-hour monitoring period, and state limits take into account distances from a home and how much the sound decreases with distance. A quiet rural night is 20 decibels. A rock band at 5 meters produces 110 decibels. The MPCA uses a sound level meter and outlines a procedure for measuring sound online. Crow Wing County also measured sound from its buildings in Brainerd to a residential area in response to a complaint in the past.

The motion to extend the application response period by 60 days passed 6-1, with Johnson opposing.

A second motion directing staff to begin a request for proposal process and seek professionals to study the valid implications failed. O’Day said the board should review the details at its next meeting in two weeks, after which the staff should have found a direction to go.

THERESA BOURKE can be reached at

theresa.bourke@brainerddispatch.com

or 218-855-5860. Follow her on Twitter at

www.twitter.com/DispatchTheresa

.

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