The City of Athens has agreed, in principle, to sell a tract of industrial property to a cryptocurrency company.
At a called meeting on Wednesday morning, the Athens City Council voted unanimously in favor of selling approximately five acres of city-owned industrial land to U.S. Farms & Mining, LLC. The land, which is located in the Redfern Drive industrial park, was sold contingent upon both parties being satisfied with a necessary right-of-way acquisition.
City Attorney Chris Trew began the meeting by reviewing a purchase agreement he developed. According to Trew, the prospective buyer is interested in expediting the sale in order to begin operations as early as January or February of 2022.
“They want to move as quickly as they can, but obviously, we need to do our due diligence and make sure this is something that’s in the best interests of the city and the council wants to approve and we’ve got good terms that we can live with,” said Trew.
A day prior to the meeting, city officials discovered that the city may need to acquire the right-of-way that would extend Jamison Road into the land being sold. This extension would serve as the primary access point for the new business.
Trew said the city would need to negotiate with adjacent property owner(s) in order to acquire the necessary right-of-way. If these negotiations are successful, the company has agreed to construct the new road, which would be owned and maintained by the city.
If the negotiation is not successful, another access point would need to be identified.
The company has also agreed to pay for a water line extension into the property, which would also require a city right-of-way.
According to Athens Utilities Board General Manager Eric Newberry, who has been in frequent contact with the buyers, the company seeking to purchase this land operates as Ankr Mining Solutions under the banner of Exponential Digital. The cryptocurrency mining company already has several operations in this region, including one in Decatur.
“What they’re doing is they’re going to the different areas and trying to find excess capacity already available in substations that are hooked up to TVA (Tennessee Valley Authority) and they basically purchase interruptible power from TVA because they can get it so cheap,” explained Newberry, who added that the company must be able to suspend its operations almost immediately in cases where the power is needed by TVA.
Essentially, the land will be converted into a graveled area with concrete pads to house specially-built storage containers that will enclose computer servers and cooling equipment. Newberry said the company will ultimately hope to utilize up to 30 megawatts of power — more than AUB’s largest current power user, Johns Manville, which pulls an average of 22 megawatts per day.
Newberry noted that AUB acquiring a customer that supplies this potential revenue stream could benefit AUB ratepayers.
“This kind of a customer could add enough revenue to our books where we may be able to put off rate increases for years to come — maybe four, five, six more years to come — if we get that kind of revenue,” he said.
The negotiated purchase price for the land is $20,000 per acre. Some of the potential bonuses of this sale discussed during the meeting were the extension of road and waterline into the industrial park at the company’s expense, as well as the selling of this particular piece of land that has been deemed impractical for most other types of industry due to its topography.
If the buyer also accepts the purchase agreement, Trew estimated about 90 days before the property sale would be finalized. The company would be able to begin site work during this time period.
At Council Member Jordan Curtis’ suggestion, Trew recommended that the purchase agreement be modified where the final sale would be contingent upon both parties being satisfied with either the successful acquisition of necessary right-of-way from Jamison Road or determining an alternative point to build an access road leading to the property.
Curtis made a motion to approve the purchase agreement with these modifications and was seconded by Vice Mayor Mark Lockmiller. The motion passed unanimously, 3-0, with Council Members Dick Pelley and Frances Witt McMahan not present for the vote.