Washington County Commission asks planning director to take action that could lead to Bitcoin mine departure

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Okays attorney role if litigation required

JONESBOROUGH, Tenn. (WJHL) – Washington County Commissioners took the first step toward the potential closure of a controversial Bitcoin mine in rural Limestone Monday night, right after a mine representative said his company had spent more than $500,000 on efforts to reduce the noise that’s created the controversy in the first place.

Commissioners unanimously approved a motion by Brian Davenport to inform BrightRidge that the usage is out of compliance with a rezoning approved in February 2020.

That motion came after County Attorney Allyson Wilkinson told commissioners that because the usage was approved for BrightRidge, a public utility, and that because the operator, Red Dog Technologies, is a private company, the usage violates that 2020 rezoning resolution.

She had written as much in a memo provided to commissioners today. The zoning resolution defined the planned use for what was called a “blockchain data center” as being conducted by BrightRidge. Red Dog’s operation thus constitutes a violation, Wilkinson wrote.

Workers construct a soundproofing fence around the Bitcoin mine in Limestone, Tenn. Sept. 24.

“Because the County may institute an action to address the use that is (in) violation of the Zoning Resolution, the issuance of a notice that operations and/or use at the property immediately cease and be permanently terminated is supported by the Zoning Resolution,” the memo reads.

The commissioners’ action means that the county’s head of planning, Angie Charles, will send out a letter to BrightRidge notifying them of this. BrightRidge CEO Jeff Dykes was in attendance, and had in fact introduced Red Dog’s Todd Napier saying he had some very positive updates about efforts to reduce the noise.

And in fact, it is not the noise that directly allows Charles to seek an injunction or ask Red Dog to shut down until and unless the usage becomes compliant – although Wilkinson did also mention the fact that the rezoning request advised that “the noise is considered small and will not impact or be heard from adjoining properties.”

The possibility of a shutdown instead hinges on the usage. But in that respect, Wilkinson’s memo pulled no punches.

“The information provided by BrightRidge – and relied upon by the Zoning Office and the Regional Planning Commission – has subsequently been determined to be inconsistent with the facts as they are currently presented.”

Commissioners also authorized Wilkinson to pursue litigation if things don’t proceed satisfactorily from county commissioners’ and Charles’s perspective.

Unexpected turn of events

Just 20 minutes or so prior to the commission’s action, Napier had briefed commissioners on Red Dog’s work on several fronts to reduce the noise. That noise comes from loud fans that cool computer servers amid what was a tranquil rural setting, as the computers themselves use massive amounts of electricity to solve complex algorithms and verify Bitcoin activity.

“We’ve spent and invested over half a million dollars dealing with the community’s concerns over the sound that has been or was being generated,” Napier said.

The work includes a fence, louvers that redirect the sound and bafflers inside the 15 or so pods where the computers run at their highest capacity from about 8 p.m. every night until early the next morning — when power is cheapest.

Minutes later, commissioner Kent Harris, who represents the neighborhood, fired the first salvo, saying Red Dog’s activities changed a tranquil country setting.

“Before you all came it was a peaceful community,” Harris said. “You might have heard a cow bellerin’, or you might have heard a chicken crowing, but you didn’t hear machines running all night long tormenting the neighborhood.”

Harris thanked his fellow commissioners for becoming involved in the issue.

“I don’t know what we can do, but I think the county attorney has a remedy and if we have to go this route I think we should,” Harris said.

Davenport then said the resolution he approved was far different from what occurred. “This doesn’t look like, sound like — this is nothing like what I voted yes for,” he said.

He suggested sending a letter requesting shutdown of the facility, which has become BrightRidge’s largest electricity customer.

“I think we need to look at our planning and zoning and say, ‘is this out of compliance?’ To me it’s out of compliance of what we passed, so therefore we have to go with BrightRidge, which is the property owner still, and say ‘you’re not in compliance to what our zoning regulations are. That’s what I see here.”

Wilkinson said her reading of the ordinance and the law found that not only is the county eligible to seek a remedy, so is “any adjacent or neighboring property owner who would be damaged by a violation in the zoning resolution.”

That remedy could be stopping the operation through an injunction. It could be a reversal or “appropriate action through a proceeding” (in court) to prevent the use that’s in violation.

“The ability to shut down a property’s use that is in violation would be supported by the zoning resolution as it’s written,” Wilkinson said. “And specifically, it’s that it’s not a permitted use under the zoning resolution because it is not a public utility.”

She said while a Red Dog attorney had described its usage to her, she had not spoken to any attorneys from BrightRidge on the issue yet.

Commissioner Jodi Jones said the issue should be resolved as quickly as possible, as much as anything in order to be fair to Red Dog.

“I would hate to see you investing more time and energy into louvers and mitigation of sound if in fact due to causes not related to the sound at all we really can’t support a business there — it’s not functioning the way that that’s zone allows,” Jones said.

Jones asked about next steps and that’s when Wilkinson mentioned Angie Charles.

“The county has a professional planning director who is empowered to send a correspondence, or it could come from the county attorney as you see fit,” Wilkinson said.

“But that would be a request which, specifically that it’s not a permitted use and then of course if there’s anything else that the planning director identified that was not in compliance with respect to other requirement of a facility operating with any type of permit, she may wish to add that.”

“So I would certainly recommend that I work with the planning director to ensure that it’s handled in the ordinary course to support their work.”

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