Crypto mining operation hits snag in Brainerd – Brainerd Dispatch

BRAINERD — The next Brainerd City Council meeting may determine the future of a crypto mining facility in the city.

After hearing from several residents concerned about noise pollution, the Planning Commission members voted 3-2 Wednesday, May 15, to recommend denial of an interim use permit for VCV Digital Infrastructure to build outdoor storage facilities at 1918 Thiesse Drive for crypto mining.

“Please, guys and gals, take a really close look at this and give us some peace and quiet out at our places,” resident Gary Thiesse said Wednesday.

Thiesse was among 10 residents living on nearby County Road 45 and Oakridge Road who told the Planning Commission they were worried about how much noise the facility would create by running 24 hours a day, seven days a week, and possible environmental impacts of the project as well.

Consideration for the interim use permit comes after a similar

permit was issued in 2022

but expired without VCV starting to make any improvements on the land within a year of issuance. Planning Commission members at that time were split 3-3 before the City Council gave unanimous approval.

The site plan submitted with the 2022 interim use permit included 12 containers and 12 cooling towers that were 20 feet in length. The current plan includes 26 containers that house data machines and cooling towers that are 40 feet in length. The building, parking area, fencing, landscaping and overall layout of the site have not changed, and plans include an 8-foot-tall chain link fence with privacy slats and barbed wire around the property.

Matt Feast, chief financial officer for VCV, attended the meeting virtually to discuss the project, talking about the immersion method of crypto mining that’s planned for the facility. Immersion mining means the mining machines are submerged in oil, which essentially eliminates the sound from the machines. The noise that would come from the facility would be due to the large fans used for cooling. Because of Minnesota’s cold climate, Feast said he would not anticipate the fans to be running full blast except for perhaps a period of time in the summer.

Another representative for VCV said according to lab studies, one fan produces about 72-73 decibels of noise at a distance of 30 feet. He said he then calculated that with all 130 fans running, the maximum noise level would be 53 decibels from a distance of about 2,000 feet away, but that’s only if all fans are running at once, which Feast said is not anticipated to happen very often.

According to the Centers for Disease Control and Prevention, a normal conversation measures about 60 decibels.

Feast also noted the monetary investment VCV would be making in the community with the project. He estimated about $7 million of construction costs — for which they would use local contractors — along with another $15-$20 million in the equipment that would be housed in the facilities. Brainerd Public Utilities, he said, would likely make about $1 million annually off the first 25 megawatts of power VCV plans to use monthly, increasing to about $2 million when the facility runs at the 50 megawatt capacity.

“That’s good for the community,” Feast said. “It’s good for the grid and all the distribution lines. We’re ready to get going on this, and we want to move quickly. And I think it’s good for everybody if that happens.”

Sarah Thiesse, who said she lives on Oakridge Drive about 2,500 feet away from the proposed facility, started out the public forum portion of the meeting, saying the exact noise levels are difficult to figure out on paper. She asked the Planning Commission if they could protect the residents, should the project be approved and the noise be excessive.

Shirley Thiesse worried about the environmental impacts and carbon emissions from all the electricity used, while nearby resident Wesley Urdahl said his wife already has sleep issues and deals with high blood pressure, so he worried this project would magnify those problems.

Craig Kunde said he was worried the noise would affect hunting on his nearby property and the general enjoyment of his land.

Megan Bock said her property has no buffer from the noise the crypto facility would produce, noting she has small children. Worried about the long-term effects of the sound — on both people and wildlife — this facility would produce, she asked the Planning Commission if there were any environmental or noise studies that could be done to determine the impact before any approval.

Nolan and Jessica Faber worried about the impacts of VCV using that much electricity and whether blackouts would be an issue or if that much consumption would drive up electric costs for Brainerd residents.

The original power contract signed with VCV stated service was interruptible, meaning if power had to be shut off for any reason, the power to the cryptocurrency facility would be the first to go before the rest of the city. Interim BPU Director Patrick Wussow said there were several occasions last year where the service for Just for Krypto — located to the north on Kitty Hawk Court — was interrupted.

Glynis Thiesse, whose parents previously owned industrial park land, said her dad’s primary concern was bringing jobs into the community.

“He wanted to improve the community,” Glynis Thiesse said. “My biggest concern is that also — the community. We all want to be healthy. … So what I’m asking is to please consider the health of the community, of the people in the area. If it’s possible to have some noise barrier around this operation if it goes through, to keep the noise out, that would so be appreciated.”

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Speaking for a second time, Sarah Thiesse said maybe the facility will end up being quieter than expected, but she wanted to make sure city officials did not have to backpedal after giving the project the go ahead.

After residents expressed their concerns, Feast said VCV wants to be a part of the community, as they are investing a lot of money. He said they’re being thoughtful by using immersion technology and noted there’s a possibility for a wall or other noise canceling measures if the noise pollution is greater than VCV’s estimate.

Only two members of the commission remain the same from the 2022 vote — Chair Don Gorham and Mike Duval. Both reiterated Wednesday their opposition to a crypto mining facility in Brainerd altogether.

While Community Development Director James Kramvik noted concerns about the number of jobs brought in by the crypto facility and how much money the enterprise would bring in for Brainerd, he cautioned the Planning Commission against using those as reasons to deny the permit, as they do not directly relate to land use decisions.

Duval said, however, the commission’s decision should be guided by Brainerd’s comprehensive plan, and he believed the application is inconsistent with that document.

Regarding the economic development portion of the plan, Duval said the project does not have a large impact on increasing local employment, as the estimated 16 full-time jobs it would generate is not a lot relative to the amount of power that would be used. He noted the city also needs to focus on creating an adequate housing stock in the city.

A previous power purchase agreement with Brainerd Public Utilities allowed VCV 50 megawatts of power per month for its cryptocurrency operations. That agreement was set to expire in March 2024.

Duval noted that energy usage could come under scrutiny as the state strives to become carbon neutral, especially after Brainerd has made strides toward that neutrality with projects like the hydroelectric dam and solar arrays.

“I find that this application really fails the test on economic development; it fails the test on two points on facilities and infrastructure goals, and it fails the test on our housing goal,” he said. “So I’m concerned that we’re entering an application that’s inconsistent with our comprehensive plan.”

Gorham focused on the health effects of noise pollution from the facility and the impacts to the environment.

“I have a lot of concerns about this,” Gorham said. “… I appreciate that our applicants are trying to assure us that everything is going to be OK, but I just don’t see any hard information coming from the applicants right now about what the operation is going to do and what we’re going to expect.”

Gorham also noted the project is much bigger now than it was two years ago.Planning Commissioner David Peterson said he, too, was worried about noise levels and would like to look at other cities with similar facilities to see if there are any issues.

Commissioner Colin Francis said he had a hard time determining exactly how loud the facility would be.

With a motion on the floor to recommend denial of the interim use permit, Tiffany Stenglein, who sits on both the Planning Commission and the City Council, said she’d vote against the motion, as she was prepared to make a recommendation with some added conditions.

The motion for denial passed 3-2, with Gorham, Duval and Francis in favor, and Stenglein and Peterson opposed. James Norwood abstained from voting, as he missed the public forum portion of the meeting, and Jeff Grunenwald was absent from the meeting.

The City Council has the final say on the interim use permit and will take up the issue at its next meeting Monday, May 20.

THERESA BOURKE may be reached at

theresa.bourke@brainerddispatch.com

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