Bitcoin mine lawsuit settlement proposal heads to county leaders in November — specific Telford site for new mine selected | WJHL

JONESBOROUGH, Tenn. (WJHL) — Washington County commissioners finally face an unenviable decision: settle a lawsuit against Bitcoin miner Red Dog Technologies and make Limestone residents near the current mine happy, or head back to court so Telford residents avoid a new mine in their own community.

Commissioners saw an official settlement proposal Monday, just three days after lawyers for the county and Red Dog (along with co-defendant BrightRidge) finalized a deal that could end the suit the county filed in November 2021. That lawsuit contends Red Dog’s operation violates the county’s zoning ordinance for A-3 (agriculture business) district, which BrightRidge had the land rezoned to in early 2020.

“Their client (Red Dog) has expressly approved all the items provided in this draft,” Washington County Attorney Allyson Wilkinson told commissioners. The terms are quite similar to those reached in a verbal agreement hammered out at the June 9 commission meeting, which many commissioners thought represented a final deal.

Ben Carder (foreground) and other Washington County Commissioners peruse a proposed lawsuit settlement agreement Oct. 24, 2022. They’ll vote it up or down at their November meeting. (WJHL photo)

Now, the commission’s Commerce, Industry and Agriculture committee will discuss and vote on the proposal Nov. 3, with the full commission voting on it Nov. 27. Eight of the 15 members would have to approve for the settlement to go to Washington County Chancellor John Rambo for sign-off.

“Next month we’ll be here, we’ll be ending the saga of whether it goes to the county commission and if it passes or it fails, if it goes back to court or if we reach an agreement,” Commission Chairman Greg Matherly said after Monday’s meeting.

“I think there’s going to be a lot of interest in that and there’s going to be some sleepless nights as well for several commissioners.”

Matherly’s comments were no overstatement. The first “mine” — a set of power-hungry computers that use massive amounts of power as they solve complex mathematical problems to unearth new Bitcoin and verify the cryptocurrency’s transactions — left the New Salem community of Limestone up in arms over noise from the fans that cool those computers.

The settlement would site a new mine on 7 acres in the Washington County Industrial Park (WCIP) in Telford. That property was revealed for the first time Monday and sits just behind the Sung Woo plant (formerly Alo and Bush Hog) and not far from Grandview Elementary.

A map showing 7 acres (with red border) in the Washington County (TN) Industrial Park proposed for a Bitcoin mine as part of a lawsuit settlement being considered by county commissioners. (Courtesy Washington County)

Settlement highlights include:

  • Within 30 days of signing, Red Dog pays Washington County a $500 per day dating to Sept. 27, which is the daily penalty for a zoning regulation violation. As of Monday that amounted to $196,000.
  • Red Dog pays Washington County $245,000 — $35,000 an acre — for the land where the new mine would operate. The sale must close by Dec. 31, 2022 as long as a site plan has been approved.
  • Red Dog closes the Limestone mine next to BrightRidge’s Bailey Bridge substation as soon as the new mine begins to pull power, but in any event no later than Dec. 31, 2024. The $500 daily penalties continue until the Limestone mine shuts down.
  • Washington County passes a “text amendment” to its zoning resolution that makes block chain data centers (including Bitcoin mines) permitted uses in its M-2 industrial district.
  • Red Dog pays for monitoring of sound at the new mine and agrees to make results available upon request to the county’s planning director or attorney. Noise attributable directly to the mine, higher than 60 decibels and lasting 12 hours or more continuously will bring a $500 fine and 30 days to correct it. A second violation would bring a $1,000 fine and 60 days to reduce noise levels. A third violation within six months of the second would result in shutdown until the problem is fixed to the county’s satisfaction.

Commissioners heard from upset New Salem residents for months starting in May 2021, and they’ve heard from upset Telford residents since mid-June of this year. Monday, prior to Wilkinson’s announcement of a proposed settlement, they heard from David Bright, owner of Bright’s Zoo in Telford, and retired schoolteacher Jim Bowling, who lives on Slate Hill Road not far from the proposed site.

Washington County Attorney Allyson Wilkinson, left, after announcing a settlement proposal in the county’s lawsuit against BrightRidge and Red Dog Technologies. (WJHL photo)

Both men urged commissioners not to approve putting a new mine in Telford. Bright has said before he believes he would have to close his zoo due to the noise, while Bowling said he believed the mine would negatively impact students’ ability to learn at the school.

Ultimately, Matherly said, commissioners will leave members of one of the two communities unhappy.

“In the end it’s all the same thing that each one wants,” he said. “One doesn’t want a Bitcoin mine, and one wants rid of the one they have.

“I think the county has to look at the agreement, what serves the citizens best, what serves the county’s legal questions and what’s your attorneys tell you is your chances in court (if a settlement is rejected). So there’s a lot of questions as a commissioner you have to consider.”

BrightRidge’s board of directors would also have to approve the proposal. The utility, which leases land to Red Dog in Limestone and sells it power, is the original defendant in the suit.

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