Butte’s new Targeted Economic Development District gave the green light Wednesday afternoon to a development agreement with CryptoWatt LLC — the company that’s building a cryptocurrency mining facility south of Butte in the former MSE complex.
Should everything go according to plan, the project is projected to generate over $1 million in state and local tax revenue in the year 2019.
That’s according to Matt Vincent, CryptoWatt chief communications officer and former Butte-Silver Bow chief executive, who said the $1 million figure is an estimate based on the company’s projected total investment in the project — a whopping $62 million.
Vincent and other CryptoWatt officials said Wednesday the company anticipates spending more than $15 million on new construction alone, which includes the cost of rebuilding a pre-existing power substation at MSE.
CryptoWatt’s mining facility is the first project to take place within the district, officially dubbed the South Butte Targeted Economic Development District, which was proposed in 2016. Its board met for the first time in January.
A Targeted Economic Development District uses Tax Increment Financing to make infrastructure investments within a designated area, similar to Butte’s Urban Revitalization Agency.
Tax Increment Financing doesn’t raise taxes. Instead, when new projects come into the area, the additional tax revenue they generate gets reinvested back into the district and is allocated by the district’s board.
The TEDD district’s boundaries lie in an area south of Butte and include the MSE complex, landing CryptoWatt in the heart of the new district.
The TEDD board voted Wednesday to recommend approval of the agreement of CryptoWatt, which will go before Butte’s Council of Commissioners March 7 for final approval.
As per the agreement, CryptoWatt is asking for a $5.5 million reimbursement from the TEDD to offset the cost of rebuilding the substation. The $5.5 million reimbursement would be allocated over a long period of time — annually over the course of the TEDD’s lifetime.
Dan Burrell, chief executive officer of Burrell Group, the parent company for CyptoWatt, also addressed TEDD board members Wednesday afternoon by phone.
Burrell said the company is looking to grow MSE to a 100 to 150 megawatt site and has a goal of scaling up to about 320 megawatts at sites throughout the state of Montana.
“We looked at that as kind of our cornerstone site. That would be our corporate headquarters,” said Burrell of the MSE complex.
Meanwhile, Fred von Graf, co-chief technology officer of CryptoWatt, will host an information session on cryptocurrency and bitcoin-mining basics at 7 p.m. Thursday in the Copper Lounge in the student union building at Montana Tech.