Not willing to risk the possibility of an application for a cryptocurrency mining development being submitted in the coming months, the Lansing Town Council is aiming to have a local law drafted and approved by March that will forbid such developments in the municipality.
This decision was made in light of a report delivered by the Lansing Advisory Committee on Power Plant Future (LAC-PPF) to the town council in December of 2021 that outlined the committee’s suspicions that a cryptocurrency mining – specifically Bitcoin – facility is being proposed at the site of the former Cayuga Power Plant by the owners of the plant.
The news of this potential development blindsided the town council as it was its understanding that the data center would not be used for mining cryptocurrency. In 2019, the council passed a resolution issuing its support of the Cayuga Operating Company’s decision to build a data center at the site. At a special meeting held on Feb. 2, 2022, Councilman Joe Wetmore quoted from an information leaflet the council received on the proposed data center, which stated directly that the company is “not targeting Bitcoin or any other cyber currency” with the project.
Even though it has yet to be confirmed whether or not the data center would be used as a facility for cryptocurrency mining, the council is electing to not wait and see. Thus, the council chose to hold a special meeting this past Wednesday to discuss strategies moving forward.
One of the main questions sought to be answered was does the council want to address this dilemma via a moratorium on cryptocurrency mining development and then review the town’s zoning code, or does it want to just dive right into reviewing and revising the zoning code.
Town attorney Guy Krogh said it depends on how soon the council believes an application for a cryptocurrency mining development could be submitted to the town.
“Whether a moratoria or zoning amendment, both would involve a local law; it’s a question of what you want to invest in, and whether or not the horizon is so near that you have no choice … but to pursue a moratoria,” Krogh said.
One of the biggest challenges, according to Krogh, that the council will face is how it wants to define the “nebulous industry,” as he refers to it, of cryptocurrency mining in its zoning code.
“The tension in the law obviously when it comes to land use is you’re going to have to define what you wish to stay or prohibit during the moratoria, or what you wish to exclude as an allowed use in whatever zones or all zones of the town, whether by overlay district, whether by general prohibition, whether by updating the definitions of what is small industry, what is computer-based businesses, whatever it is you’re going to do,” he said.
The town would also need to be wary of writing these definitions in a non-discriminatory manner.
“If you want to allow restaurants, but prohibit Olive Garden, that’s a problem,” Krogh said. “If you want to allow retail, but prohibit Rexall drugs, that’s a problem. So you have these rules of uniformity and what you’re trying to regulate is the nature of land use or community impacts and not who is the owner. If you’re going to allow warehousing, but not allow warehousing for construction materials, that’s allowed. I think it’s going to take a little bit of thinking to understand what exactly is this business and what are its definitions.”
Two deterrents of cryptocurrency mining facilities are that they require a significant amount of energy in order to function and that they typically do not produce a large amount of jobs in a community. Town Supervisor asked if setting zoning parameters around limiting development of businesses that are either high-energy consuming and/or low-job creating, which Krogh responded by saying such parameters would be too risky legally.
“If you want to talk about something that may have high energy usage, but with low job creation, you might be describing an awful lot of daycare centers and nursery schools,” Krogh said. “Not on the same scale, but how do you ratio that? Is it number of employees per megawatt hour? I can just see a lot of problems with that broad of a net. What I think might be better is to just not allow land uses in town that you do not want in town, but not to do it on a discriminatory basis, but to do it on a policy basis born in your comprehensive plan. Promoting employment, promoting energy conservation, those are all tools that you have.”
On the whole, the town would be able to flatout prohibit development of cryptocurrency mining businesses if used such methods.
“As long as you get the definition down well enough so that you’re catching that which you wish to catch and not all other industries, I think you can pick and choose what you want to allow in the town,” Krogh said.
Towards the end of the discussion, the council revisited the topic of implementing a moratorium or not, and eventually decided to hold off on it and try to amend the zoning code in a short period of time.
The plan that was ultimately decided upon was to produce a draft of a local law for the zoning changes and their enforcement and do so to allow the proper amount of time to set a public hearing for the law at the council’s March 16 meeting (and possibly set another public hearing for its April 20 meeting if needed.).
There was some deliberation on whether or not that goal is attainable, but multiple council members felt it was the right timeframe for the situation.
“I know that’s pushing it and optimistic, but … we don’t want an application to come up while we’re doing this,” Councilwoman Bronwyn Losey said. “So if we’re going to be making the definition and doing the work, let’s go ahead and get it done.”