LANSING, N.Y. — Is a data center also a scientific research facility? That’s one of the arguments TeraWulf executives are making in a zoning appeal in the Town of Lansing.
TeraWulf, a Maryland-based company, wants to build a data center at the site of Milliken Station, a coal-fired power plant that ceased operations in 2019. But their project does not neatly align with the zoning of the industrial lot.
The data center has met opposition from environmentalists who worry it will impact Cayuga Lake and raise electricity prices without delivering all of the benefits executives have promised.
At a Dec. 16 meeting of the Town of Lansing Zoning Board of Appeals (ZBA), TeraWulf representatives and opponents had the opportunity to share their thoughts on the company’s two zoning appeals.
The meeting lasted around three and a half hours. Opponents of the data center lobbed critical comments against the zoning appeals. Zoning board members gently sparred with some speakers. And some attendees grew a bit weary as the night dragged on.
The board did not reach a vote, which is scheduled for Dec. 22 at 6:30 p.m.
TeraWulf CEO Paul Prager also made it to the hearing but not before making a pit stop at a local watering hole, apparently. Before the night’s meeting, the TeraWulf C-Suite was spotted at Rouge’s Harbor Inn, a popular bar and restaurant in Lansing.
“It has been a long evening, and I started at the corner pub,” Prager mumbled into a microphone at about the two hour mark of the meeting.
Prager and his team argued in one of their appeals that the data center is a “scientific research laboratory”, and in the other appeal that it is a “warehouse and/or general processing” facility.
TeraWulf’s appeals come in response to a decision from the Town of Lansing’s code enforcement officer, Scott Russell, who found that a data center is not an allowed use in the town’s industrial zone.
The meeting on Dec. 16 began with a long-winded disclaimer by ZBA Chairperson Jack Young. He clarified the meeting was meant “solely to interpret a few phrases from the town’s zoning code.” He prohibited speakers from making comments about the environmental and economic impacts of data centers or any other externalities of the TeraWulf proposal.
TeraWulf Chief Strategy Officer Kerri Langlais started the public hearing off by saying the company’s plan is to turn the retired power plant into a “modern research and technology campus.”
Langlais noted that in June 2019, the Lansing Town Board unanimously passed a resolution urging New York state agencies to support the retirement of the coal plant and its repurposing into a data center.
She added that the Lansing Town Board unanimously approved a resolution endorsing the Cayuga Data Center Project in March 2020 as part of the Empire State Data Hub.
“This is direct evidence that Lansing itself has already interpreted its industrial zoning to include data center type uses without the term data center appearing in its code,” she said.
Many opposing speakers pointed out during the meeting that the Lansing zoning code prohibits any land use “not specifically permitted.”
During her initial comments, Langlais said that modern scientific research is evolving, depending heavily on advanced computing technologies. She added that research, which once required physical laboratories, can now be conducted inside computers.
Donning their usual red attire, local environmentalists from Lansing and Tompkins County criticized TeraWulf’s set of zoning appeals from TeraWulf.
TeraWulf’s August announcement that it signed a lease agreement for the property did not mention scientific research as one of the intended uses of the data center.
In various public meetings, TeraWulf executives have repeatedly said no cryptocurrency will be mined at the facility.
John Dennis, who leads the environmental group Cayuga Lake Environmental Action Now, passed out sheets of paper quoting TeraWulf’s lease agreement: “Tenant acknowledges that the buildings will be used as one or more cryptocurrency mining facility and/or a high-performance computing (HPC) data center.”
When Young asked Prager whether he would release the rights to mine cryptocurrency from their lease if asked to by the planning board, Prager responded by saying “We would say, ‘planning board, you have no authority to ask us that, but we will happily do it.’”
Opponents of the data center ridiculed the premise that it would be used for scientific research or as a warehouse.
“Just because there might possibly be some de minimis amount of scientific research happening within a data center, that does not make the facility itself a scientific research laboratory,” said Ken Wolkin during his privilege of the floor. “Just as a child working on their science project in the basement does not make a home a scientific research laboratory.”
Stephen Daly, a lawyer with Citizen Environmental Law who represents the grassroots environmental group FLX Strong, questioned the legal authority of TeraWulf ’s appeals.
Daly said his review of the appeals found that the legal cases that were quoted were not cited, and that citations did not correspond to the cases referenced.
Evan Alverez, who works as a financial specialist for a lab at Cornell University, said the scientific research that TeraWulf could potentially conduct would require substantial paperwork, including research proposals, publication costs, among other things.
The only third-party proof the company has submitted in favor of the classification of their data center as a research laboratory is a letter from their tenant at the Lake Mariner Facility in Somerset, New York.
Other speakers highlighted a comment Prager made in a TeraWulf-hosted October Q&A session in which he had no idea how the racks within his data center were being used.
Young followed up on that point when he questioned Prager.
“A lot of people pointed out that there’s no way for the town to monitor what you’re doing and what your customers are doing,” Young said. “It could be all porn websites for all we know.”
Prager clarified these facilities are not outfitted to host web pages.
During the meeting, only two attendees spoke against the decision of the town’s code enforcement officer.
Lauren Baker, a member of the Zoning Advisory Committee, said in an interview with The Ithaca Voice, that Lansing, which doesn’t have a vibrant downtown, relies on “these sort of industries.”
“Not allowing it to at least proceed to the planning portion is a disservice,” Baker said.
Baker said that those in support of the code enforcement officer’s determination are misinterpreting the appeal.
“They’re looking at it a little too literally,” she said. “They’re not applying to be a scientific research facility. It’s just where it most naturally fits within the zoning code.”
These interpretations drew concerns among the public because of the implications they had on the jurisdictional purview of the zoning board.
One commenter said interpreting the text of the zoning code to allow for a data center would amount to “rezoning by administrative action without legislative amendment, environmental review or public process,” which is outside of the scope of the ZBA.
TeraWulf’s other zoning argued the data center should be considered “a warehouse and/or general processing facility” which would bring it into compliance with the town’s zoning.
The argument ran into trouble with Young. He highlighted Prager’s description of data as a product, which could contradict the previous appeal that the data center would be designated a research facility.
According to the town’s zoning code, a laboratory is defined as: “A building or group of buildings within which are located facilities for research, investigation, testing or experimentation, but not facilities for manufacturing or selling of products except as may be necessary for prototype development or as incidental to the main purpose of the laboratory.”
Young repeatedly asked the company whether they were providing a product or a service, but Prager pushed back.
“We’re not providing a service,” Prager said. “We are actually doing scientific research laboratory at a facility.”
Toward the end of the meeting, Young asked Prager which designation the data center would best fit under: a scientific research laboratory, or a warehouse.
Prager appeared to hesitate as he answered, prompting Young to say, “Do you want to call a friend?”
Prager said the data center would be best described as a research laboratory.
After the meeting ended, Langlais chose not to comment on the events of the hearing. Prager, however, said it had been a “great meeting.”
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