BY JEFF CHUDZINSKINorth Country This Week

MASSENA -- The Massena town board has extended the ongoing crypto operation moratorium again, this time until September 30, in a move that could potentially further delay a planned $100 million expansion project that could bring 80 to 90 jobs to Massena.

North Country Colocation Services CEO David Fogel addressed the more than 40 attendees at April's town board meeting, the second meeting in a row he has attended to advocate for his organization.

According to Fogel, NCCS are seeking a moderate language change in proposed regulations that would allow the expansion project to move forward. Fogel said previously that investors are standing by but are hesitant to move forward if there is a possibility the expansion project could be nixed due to the regulations.

"Obviously the moratorium is sort of connected to that, because the moratorium is what leads to these regulations," he said.

Fogel reiterated that NCCS is not seeking special treatment or to circumvent the planning committee and environmental review processes that take place in industrial sites.

"We simply want clarification of the language so that we can confidently move forward with our expansion project and to tell our investors that we can do this," he told board members.

Fogel said employees at the facility, many of whom were in attendance in March and April, have a vested interest in the process moving forward.

"This has real implications or could have real implications for them," he said.

Fogel previously said that regulations related to crypto mining will lead to "the pie shrinking," necessitating the expansion project to ensure NCCS can position itself for future success.

According to Fogel, time is of the essence because the pie is getting smaller and will continue to erode profits for the company. That change arrived in April with regulations being put in place for crypto operations.

When NCCS was hitting its stride, Fogel said they were the largest such operation in the world. Now, they have seen that share cut in half, with another cut landing last month.

"That’s why this expansion is so, so important. It’s not about extra revenue so much as it’s about surviving and sustaining and not eroding our revenue first and from there, yes, expanding and growing. So, the point is, this isn’t a matter of choice. This is a matter of necessity for us. Ultimately, if we don’t grow, our revenue is eroded. Eventually we can’t operate because we’re not generating enough revenue to cover our costs,” Fogel previously said.

To stop that "erosion of profits," Fogel said the expansion project is essential for the future of the operation in Massena, one that he is committed to seeing continue to succeed.

In his address to the board in April, Fogel reiterated the company's support of the community and their intention to continue to do so through charitable donations, involvement in community events and by generating revenue for the town and county through tax revenue.

"We also weight the overall economic impact that our business has on the community as a significant taxpayer and a significant contributor to the overall community," he said.

At both the March and April meeting, NCCS received strong words of support from many community members in attendance who said they did not even realize the operation was in the former Alcoa East facility.

Many said they were grateful to have an employer who not only was looking out for the best interests of their employees, but also that of the community at large.

In both addresses, Fogel implored board members to consider what the original purpose of the intended regulations was.

Fogel said the regulations, as originally planned, were to address operators "on the side of the road" that cause a nuisance to people "because they're unsightly, make noise and are probably unsafe."

Regulations were originally sought to address sea box containers being used for such operations after some operations were able to set up in a residential/agricultural zone and commercial zone.

Though the regulations would grandfather in the existing operation, the expansion project would not be included, Fogel said.

"The problem is the wording to maybe five words, ‘but any expansion thereof shall be subject to these regulations.’ That's all we're asking to be resolved," he said.

Fogel said once that language is clarified, he can move forward and get a deal done with investors who would help finance the planned expansion. That project would bring millions of dollars in tax revenue to the county and town and would allow the company to double the number of employees, he said.

Another point he raised was the safety standards the company has undertaken to ensure full compliance with town, county, state and federal regulations.

"We’ve been spending millions of dollars on this expansion. We got approval from the state regulatory authorities, the energy authorities, NYISO (New York Independent System Operator), NYPA (New York Power Authority)," he said.

Despite those approvals, Fogel said NCCS needs the language clarified to get "leery" investors to fully commit.

“There’s all these extra regulations being imposed on us for expanding that wouldn’t apply to other businesses. And, by the way, shouldn’t apply to our business because they don’t fit what we do. I think they do fit what the small operators do,” he said

"We're not looking for a blanket exemption. We will continue to follow all rules and regulations for the expansion project," he said.

Attorney Javid Afzali, who represents NCCS, suggested that language be included to exclude operations from the regulations if they reside within an industrial zone.

"If David and his company wants to put up another building, they're going to be subject to site plan review and they're going to be subject, if necessary, for special use permits, building permits, all of those things. They will still apply, they're not looking for an exemption. All they're looking for is if they do expand, they don't want that expansion to trigger obligations under the regulations proposed that would create undue burden," Afzali said.

Town officials signaled that conversations would continue between the two parties to reach a conclusion that is satisfactory, though no official action was taken at the meeting.

In the event that town board members agree to finalize the regulations, the crypto moratorium could be lifted prior to the new end date of Sept. 30, 2024.