Cascade, Iowa — Cascade soon could be home to a cryptocurrency mining facility, with a local economic development leader lauding the project’s potential benefits to the community. Simple Mining, a Cedar Falls-based company, recently purchased 15 acres in Cascade’s industrial park from Cascade Economic Development Corp. The project site is located east of Industrial Street Southeast and north of Industrial Court Southeast. Cascade Economic Development Corp. President Ken McDermott said the crypto mining facility would be built on 4 to 5 acres on the western part of the property.
The project would create six to eight jobs. Simple Mining has 10 active facilities, according to its website, including one in Manchester. They’re very committed to being transparent with the projects they have. Crypto mining is the computer-driven process by which cryptocurrencies, such as Bitcoin, process transactions and mint new tokens.
The project would involve putting computer servers inside about 40 crypto mining containers, each 160 square feet, which would run constantly to solve the algorithmic encryptions needed to proverbially mine Bitcoin. McDermott emphasized the proposed Cascade project is different from the “mega-site” data centers being built or considered in other parts of the Midwest. “A data center … is a much larger facility that uses a tremendous amount of water,” McDermott said. “This certainly isn’t one of those (data center) projects.” McDermott said his organization has taken steps to ensure the project does not negatively impact residents.
“The CEDC is committed to making sure this project does not have any negative impacts on the residents of Cascade or the neighboring Oak Hill subdivision,” McDermott said. “The CEDC feels this is a win-win for the CEDC, the city of Cascade and the community as a whole.” Cascade Mayor Steve Knepper, however, criticized elements of the project and CEDC’s handling of negotiations with Simple Mining. “The majority of their negotiations were in private,” Knepper said. “(City leaders) weren’t allowed to be there.” Knepper and McDermott both said Knepper was present at some early meetings about the project but not during negotiations.
Knepper said he requested a meeting with CEDC and Simple Mining six weeks ago, which he said was rejected. McDermott denied that his organization declined to meet with city representatives at all but rather declined to include them in formal negotiations. “The city had no ownership in the land involved,” McDermott said. “It was a transaction between CEDC and Simple Mining. The city did not have any jurisdiction to govern those negotiations.” Among Knepper’s other concerns with the project is its impact on residents’ utility bills. McDermott said the project would use “a lot of electricity.” Knepper said he spoke with leaders in another Iowa community where a crypto mining facility is in operation and was told utility rates increased for local customers. McDermott, however, shared a letter from Maquoketa Valley Electric Cooperative affirming that local ratepayers would not be impacted. “Part of the due diligence when we did this is make sure Maquoketa Valley Electric Cooperative had the capacity to provide the power they need without impacting current customers or future development,” he said. Jeremy Richert, CEO of the cooperative, confirmed the details of the letter. He said the project would “not impact reliability or rates” for any customers.
McDermott also shared with the Telegraph Herald a development agreement between CEDC and Simple Mining, which imposes several restrictions on the project, such as limiting the noise level at the edge of the property to 65 decibels, about the volume of a conversation between two people. That development agreement, however, leaves open the possibility of a data center being constructed on Simple Mining’s property. The documents states CEDC “agrees … to consider exploring the feasibility of a data center development on the (property),” with any such project “contingent upon, but not limited to, the availability of adequate municipal water and sewer services, sufficient electrical infrastructure, compliance with all applicable zoning and land use regulations of the city … and a determination by CEDC that such development will not adversely impact neighboring properties.” McDermott said the clause came as a result of a request by Simple Mining to be allowed to build a data center on the property “without any restrictions,” which McDermott said CEDC was not comfortable including in the agreement. “They wanted something in there … that we’d at least consider talking about it rather than ‘absolutely no,’” he said. “We’d be doing a lot of due diligence, and the city would need to approve a building permit (for a data center).”
Another area of contention between McDermott and Knepper involves the city’s financial benefits from the project. CEDC negotiated a Payment To Community Organization, in which Simple Mining would pay an annual sum to CEDC, of which the city would get $50,000, subject to council approval. This is meant to make up for the lack of property tax revenue from the facility, which is not considered a permanent structure. Knepper criticized CEDC for negotiating that form of payment as opposed to Payments in Lieu of Taxes, in which a non-taxed entity makes voluntary payments directly to a local government. “(CEDC) will benefit financially to a fault,” Knepper said. “They provide no services to Simple Mining. They don’t provide water, sewer, police, EMS, snow removal (services) or anything. … It’s the taxpayers of Cascade who provide everything.” McDermott defended the value of CEDC to the city, pointing to tax revenue from other activities at the industrial park. “CEDC could’ve sold the land to Simple Mining without negotiating those payments, … but we made it a win-win,” McDermott said. “If the city owned the (land), they could’ve made that deal with them.”
Cascade’s City Council still needs to approve a building permit for the project. If approved, McDermott said Simple Mining would begin construction in late spring or early summer, with a goal of having the facility running by Dec. 31. McDermott said CEDC and Simple Mining will host a public informational meeting in about a month, prior to the start of construction.
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