In late September of last year, Mountain City was devastated by record-shattering floodwaters wrought by Hurricane Helene. Buildings were battered, infrastructure was destroyed and many were left homeless.
The East Tennessee town’s largest employer – a yarn factory – sustained major damage and announced plans to close earlier this year. It cost Mountain City over 100 jobs and millions of dollars in local investment.
“It put a hurting on the city and the county, with people losing their jobs,” said Mayor Jerry Jordan. “It was a major blow.”
Now, this tight-knit community of about 2,500 people in the Doe Valley is in desperate need of a new industrial partner. Local leaders are doing whatever it takes to get one.
Since February, leaders of Mountain City have courted CleanSpark – a bitcoin mining company – in closed door meetings while advancing planning proposals without proper public notice.
CleanSpark, like others in the tech industry, are looking to rural communities like Mountain City to help build out the infrastructure they need to run their servers, attracted to the cheap land, open spaces, and plentiful electricity often found in small towns.
While these kinds of developments can bring investment, they can also generate excessive noise that irritates neighbors and slashes property values.
In Mountain City, community members didn’t learn about the plan to build a 30 megawatt bitcoin mine on 50 acres of land in the middle of a neighborhood until April.
When they found out, they were furious. Mountain City Mayor Jerry Jordan says locals began “bombarding” him with phone calls, texts and emails. But Jordan told WUOT News he doesn’t answer or open all of them, just the ones from people that he personally knows.
Despite cries of protest, a widely circulated petition, and hours of public comment firmly opposed to the project, the people of Mountain City and the surrounding county remained largely ignored by the town government.
In an interview with WUOT, Jordan questioned whether his job was to answer to the people, or to do what he personally feels is best for Mountain City.
“[I’m] trying my best to make the best decision for this town,” Jordan said. “It might not be the most popular decision, but I wanna try and make it the best decision for this town.”
Despite promises from the electric company that the investment will keep power rates low and add an extra $170,000 in annual tax revenue for the city, locals weren’t sold. Many were concerned about the potential for sound pollution from the bitcoin mine. Some say the proposal has already halted in-progress realty deals and slashed asking prices on property nearby. And conflicts of interest began emerging in the local government that went unaddressed.
Now, after facing threats of legal action, city leaders are beginning to back down.
“I guess we made a mistake,” Jordan said. “But are we going to go to jail for making a mistake? I mean, what’s the consequences?”
For Big Tech, rural is king
CleanSpark has expanded rapidly with its model of seeking energy surpluses in rural communities throughout the United States. In the last 11 years, they’ve acquired or built over 20 bitcoin mines in four states. Nearly half of them are in rural Tennessee.
The company’s Senior Vice President Harry Sudock says a partnership with Mountain City “made perfect sense.”
“When we saw the loss of the manufacturing plant in Mountain City … we thought it made perfect sense,” Sudock said. “Who can we bring into the system to make sure they don’t lose the revenue – the tax base – and the benefit to the community that that plant brought.”
CleanSpark claims it wants to help communities, but not everyone has been happy with the results.
Excessive noise at a bitcoin mine in Wyoming
Earlier this year, CleanSpark opened a brand new bitcoin mine on the east side of Cheyenne, Wyoming. It uses the latest oil immersion technology to help keep its processors cool. As part of this process, the oil is circulated through large, industrial coolers mounted to the top of the building the processors are housed in.
These coolers force air over a radiator that the hot oil flows through, cooling it down before releasing heated air. The cooler’s fans spin 24 hours a day to keep the oil cold enough to chill the hundreds of processors in the facility.
Caryl Simpson and her husband live less than a mile from the mine. They can’t see it from their home, so they didn’t know it was there while it was being built. But then the facility came online. And the noise started.
“It was like being on the tarmac of an airport,” Simpson said. “It was so loud.”
Neighbors say the noise generated by the coolers on top of the facility travels far beyond CleanSpark’s property. The worst part about it isn’t how loud it is – it’s that it never stops, Simpson said.
“When it's persistent, you begin noticing it more and more,” Simpson said. “It's sort of like Chinese water torture, where one drop of water is okay, but when it's perpetual, it becomes an annoyance or dangerous.”
She says Cheyenne’s mayor has been communicating with CleanSpark to try and fix the issue. Temporary noise barriers similar to those found on an interstate highway have been built around the facility, and they’ve reduced their power to try and mitigate the sound of the fans. But sometimes, Simpson says, the noise picks up again.
“CleanSpark is not just annoying, it's a real problem in terms of our peace and quiet out here,” Simpson said. “Especially for those that are closer to it.”
Procedural upsets
Two days before a regular meeting of the Mountain City Planning Commission in February, the general manager of the town’s local utility, Mountain Electric Cooperative, called the city office to let them know that he had some business to present to the commission. The town was getting a new industry.
For weeks, Metcalf had been meeting with representatives of CleanSpark and quizzing them on what kind of bitcoin mining technology they’d be bringing to Mountain City, Metcalf was sold. He says the bitcoin mine would be an unobtrusive, positive industry for the town.
“I'm very optimistic that it's the best thing for Mountain Electric and the members,” Metcalf said. “I think that they are a stand up company.”
But because he didn’t give notice at least 10 days in advance to the city recorder, the CleanSpark proposal was not put on the published meeting agenda. Instead, the planning commission agenda listed “no new business.” According to meeting minutes, no members of the public were present to provide any comment.
Jordan told the planning commission he had sat in on meetings with CleanSpark already, and that he was convinced the company was “very, very nice.”
He made a motion to grant preliminary approval to the CleanSpark project despite not having a finalized site plan or contract from the company. The motion was carried unanimously. And almost nobody in Mountain City knew about it until two months later.
CleanSpark arrived ‘out of nowhere’
In late April, the planning commission invited representatives from CleanSpark to give a presentation with new details about the bitcoin mine. This time, the proposal was placed on the agenda. Residents and local media attended the meeting. People were shocked to learn the proposal had already been given preliminary approval.
“It just seemed to come out of nowhere,” said city resident David Thompson. “And thanks to social media, people became more aware and alerted, and people were asking, ‘what's going on?’”
People began moving quickly to learn what a bitcoin mine is and how it could impact their area. Locals held round-table discussions and asked questions from people who used to live near bitcoin mines before moving to Mountain City; people like Graham and Judy Marshall, who retired from Texas a few years ago.
“Up the road from us was Granberry, Texas,” Judy said. “They’re having health problems, just all kinds of things. And when you start to hear that, it’s like, what good is it for the people that live around it?”
Her husband, Graham, is concerned that if CleanSpark gets approval to come to Mountain City, they’ll never leave.
“They can do what they want,” he said. “They can run us over with a bus, and we just have to say thank you.”
City leaders rushed to quell local concerns. They kept reiterating that CleanSpark had promised them the cryptomining facility wouldn’t make any excessive noise, that it used “new technology” that immerses the data processors in oil to cool them down.
Locals ‘never get a response’ from city leaders
Despite concerns raised by people who live nearby and the circulation of a petition online with over 1,700 verified signatures, city leaders remained unfazed. Jordan says he thinks that the majority of people in the city are in favor of the project, despite public comment which would suggest otherwise.
“The people that are against it are very, very, very vocal,” Jordan said. “Now, there's a lot of people that's for it that's not going to speak up … I guess they don't want to be criticized.”
Several people have expressed exasperation with the mayor, saying he doesn’t answer their emails, letters, or phone calls.
“Every time I send them a letter, I never get a response,” said Lori Blevins, a county resident. “And I think that’s been a consistent thing.”
Ginger Johnson lives in the city, and says her emails to Mayor Jordan go unanswered as well.
“He will not respond to any emails,” she said.
In an interview with WUOT News, Jordan said he doesn’t open emails from people he doesn’t personally know.
“A lot of these correspondence I don’t open, because I don’t know if it’s from a trusted source,” Jordan said. “Do you open up everything that you get on your computer? Could that be a threat to get a virus on your computer or your phone?”
WUOT News has learned that several undisclosed conflicts of interest exist on the boards and commissions which have been voting on the proposed Bitcoin mine. One of the city’s aldermen, Jason Bryan, accepted a job with CleanSpark in early June. He didn’t disclose this to the public until weeks later, when he resigned his seat on the board.
In addition to this, planning commissioner Richard Walsh didn’t disclose that his wife served as Mountain Electric’s Chief Financial Officer while voting on the proposal. Finally, the town’s general counsel George Wright simultaneously serves as Mountain Electric’s attorney.
None of these conflicts were addressed directly by city leaders, and all represent potential violations of the town’s adopted code of ethics. When asked about these issues, Jordan said that they represented a gray area.
“I'd say, looking back, [Bryan] probably should have resigned as soon as he accepted [the job],” Jordan said. “But, I mean, that's their private right, whatever they wanna do.”
The proposal would require re-zoning the 50 acre parcel that has yet to be sold to CleanSpark. A special resolution that would reclassify the lot passed on first consideration at a July meeting of the Board of Mayor and Aldermen, despite a packed city hall of residents voicing opposition. A public hearing was held last week to receive input from area residents. All 11 people who spoke were opposed.
It all came to a head on Tuesday, when the Board met again to vote on the resolution. The mayor asked if any of the members wished to vote on the plan. All abstained. A crowd of public onlookers erupted in applause.
“Bitcoin is dead in the city limits,” Jordan said.
Looking forward
Jordan told WUOT News that the board’s about-face on the CleanSpark issue was because of several lawsuit threats they had received in the days leading up to the vote.
Those were spurned largely by local residents. Fed up with feeling unheard by their local leaders, they had begun reaching out to law groups to try and put a stop to the plan.
On August 5, the Southern Environmental Law Coalition submitted a letter to the Town of Mountain City along with Mountain Electric Cooperative requesting all communication and documents exchanged regarding CleanSpark.
In addition, county resident Randy Dandurand says he conferred with attorneys who were prepared to file an injunction against the city for its hastened advancement of the CleanSpark proposal.
“This is bigger than all of us,” Dandurand said. “But if we get together as a group like this, you can see that we can take down a goliath.”
Jordan said it was more than the town could bear.
“We don’t need to spend revenue on fighting a lawsuit,” Jordan said.
While CleanSpark may not have a home in Mountain City, Jordan has raised the possibility that they could still go elsewhere in Johnson County.
And Mountain Electric manager Rodney Metcalf says CleanSpark has told him their eyes are set on several areas throughout East Tennessee.
“They got a lot of other places to go that’s going to actually build the infrastructure for them and welcome ‘em,”” he said.
It’s unclear where CleanSpark will go next. But growth isn’t slowing down. Earlier this week the company reported to investors that it had its most successful quarter to-date, and reaffirmed its commitment to expansion.
The future of Mountain City’s economy remains uncertain. Mountain Electric has told customers it may have to raise its energy rates if it can’t attract a new industrial customer. And the city is still facing millions of dollars in repair costs from Hurricane Helene that so far have gone un-paid by the Federal Emergency Management Agency, according to the mayor.
“I want to try and help the town,” Jordan said. “I really do. I love the town, and will do anything I can to help our city grow.”
