BY JEFF CHUDZINSKINorth Country This Week

MASSENA -- Regulations for crypto currency operations in the Town of Massena are in the eleventh hour of preparations but one company is hoping the regulations will be clarified so they can move forward with a proposed $100 million expansion project.

North Country Colocation Services is based in the former Alcoa East plant and currently employs around 85 full-time workers.

During the March 20 town board meeting, over 30 were in attendance to voice their concerns about the delay in approving regulations that would allow the operation to expand.

Many spoke of the familial nature of the company, saying they have never worked for an employer that invested in its employees and their families.

Others spoke of the work/life balance and how supervisors and managers encouraged employees to attend to their families on little to no notice.

"I've lost jobs over family emergencies. They will always come first for me, that's just how it is. But I have never worked for a company that had supervisors that said 'tell us what you need, take care of your family.' You don't find that up here," said a North Country Colocation employee.

Another employee spoke emotionally about his experience trying to find work, saying no one offered him opportunities for employment.

"Everywhere I went, I was turned down. NCCS gave me a chance. I started as an operator and worked my way up. When I was struggling as a supervisor, they didn't fire me. They asked what they could do to help and moved me to another position. I was struggling with my mental health and they gave me the support I needed to get through it," he said.

CEO David Fogel spoke at length about the efforts the company has put forth to take care of its employees, ranging from competitive salaries, to benefits packages that are not seen in most industries.

Fogel said those benefits and future jobs are in danger, however, due to language in the proposed regulations that would place extra requirements on operations not only looking to set up shop in Massena but were hoping to expand as well.

He said the planned expansion by NCCS is no different than if Alcoa had sought to expand operations.

“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,” Fogel said.

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. NCCS is in the industrial zone that formerly housed the Alcoa East plant.

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.

According to Fogel, with the language as it now stands, investors are "leery" and not willing to commit to a deal. That could mean the company does not survive in the long run.

Fogel said time is of the essence because the pie is getting smaller and will continue to erode profits for the company. That change is coming 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 coming in April.

"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 said.

According to Fogel, the company is three years into a $100 million expansion of the facility.

"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.

Fogel said he has also met with Governor Kathy Hochul and her staff who he described as "supportive of the project."

As the expansion continued, Fogel said they were operating as if everything would be fine and there would be no concerns with the regulations, however that has changed.

“We’ve been proceeding and spending all this money and time assuming that this was going to be fine. Then, all of a sudden, these regulations are thrust upon us, and now we’re very concerned about it because here’s the problem, $100 million. We don’t have that. We don’t have anything close to that. So we need to raise outside capital to do it and we’ve been talking to investors about contributing that capital,” Fogel said.

Town Attorney Eric Gustafson said he and town council members have been hard at work to finalize the language in the regulations, noting they have spoken directly with Fogel and NCCS representatives  throughout the process.

"We’ve taken their input and their counsel with regard to the regulation. The board is aware of the impact to the community, and they’ve kept that into consideration and took their thoughts and their drafting notes when creating the legislation as it’s proposed,” Gustafson said.

Town Supervisor Sue Bellor also spoke to the situation, saying the town board and Gustafson have been working on the regulations from scratch, noting there were "no other regulations to follow."

"We want to do it right. We also want to protect the people of Massena from some of these businesses that were put in a few years ago that don't even compare to this situation," she said.

Gustafson said he and the town board have not made any attempts "to damage what has been an incredible success story," saying the current regulations "will have no impact on current operations."

"If they were going to be building let’s say new buildings out there as part of the expansion, the same as if Alcoa built new buildings or Pease and Gustafson built a fourth floor on our building, the zoning regulations would apply. That’s clearly in here and I’m not sure how we get around that or what the board feels,” Gustafson said.

Fogel took the opportunity to speak again, saying he and NCCS attorneys have worked with town officials on the drafted regulations. But Fogel said from the perspective of NCCS, the expansion project would not be grandfathered in.

"The expansion is just more of what we're already doing," he said.

Following the public comment that lasted for nearly an hour, Gustafson suggested board members establish a date for a public hearing to extend the moratorium for an additional 60-days to ensure the two parties don't "get cramped for time" as they hammer out the final details of the regulations.

"He’s got some proposed language that I’m not 100% on board with. I think there’s some back and forth that needs to happen," Gustafson said.

Fogel said they look forward to working with the town and hope to have the regulations finalized in the near future so the expansion project can continue forward as originally planned.