DigiHost presents plans to transition to AI data center in North Tonawanda

North Tonawanda, N.Y. (WBEN) - During a meeting of the City Planning Committee in North Tonawanda on Monday, DigiHost - the crypto mining company at the forefront of much debate among residents with its plant along Erie Avenue - presented plans for approval to remove existing equipment from the site and replace it with a two-story, all enclosed 80,000 square-foot building to house a new AI data center.

This comes as a two-year moratorium for any new crypto mining activity in the city is set to expire in July, and before Gov. Kathy Hochul could sign a one-year moratorium on new data center activity in the State New York.

Dan Rotunno from DigiHost said during Monday's meeting the initial project, which is on the front lawn and over to the North side of the facility, will see a redesigning of everything.

"We've already taken out a large portion of the existing containers, and what we're proposing to do is everything that is already existing inside our fence lines and has already been disturbed, what we're doing now is we'd like to put in a two-story building so we can house all of the computer equipment inside there," Rotunno explained.

"The equipment we're exchanging is different equipment. It's not Bitcoin anymore, we're moving to an AI infrastructure. So the computers are not going to have any computer fans. Basically, from a community standpoint, we're going from 20,000 computer fans running to zero."

Much of the complaints from residents in-and-around the facility over the last few years has been noise pollution generated from the computers on site. That has not only impacted the every day lives of residents in the city, but it is also having other impacts to the environment.

Rotunno says what's going to change and why the company presented plans to the committee is the company is going to put the equipment all in one building so it not only looks nicer, but it's easier to maintain.

"Also what will happen then is we're going to use air coolers to cool everything. We are not taking any water from the city. It's going to be closed loop cooling, and we're just cooling it with air. So it'll be a water glycol mixture for cooling towers. The only fans that you're going to see, or hear I should say, are just 20 fans total for cooling. Other than that, there's going to be some emergency backup diesel generators we'd like to add as well," Rotunno said.

Rotunno adds the noise from the 20 cooling fans will be minimal, similar to a normal exhaust fan on any building.

While DigiHost says their plans are an effort to work with the community regarding the noise levels, residents are not buying what the company is offering.

"To be honest with you, over the past three or four years listening to the company and the things they have said, they've lied since Day 1. I'm not believing anything they're telling us on this particular day, because as far as I'm concerned, they're upgrading right under our noses," said Mike Polito, who lives about a half mile away from the plant on Fairmont Avenue.

Polito believes DigiHost putting in equipment to help lessen noise, while also upgrading to becoming an AI data center is in violation of the current moratorium in the city.

"To me, this sounds like expansion," Polito said.

"When you think about it, they're increasing to a data center, as opposed to crypto mining. Isn't that an expansion? Even though they're saying they're doing it just to make things quiet for the residents that can hear the noise, which is why all this started. Now there's a moratorium that passed in the [State] Legislature, and we're waiting on Gov. Hochul to sign that would put a one-year moratorium on any new construction. But it doesn't help us on the current situation that we face."

Fellow North Tonawanda resident Frank Laurendi, who lives less than a mile from the plant on Daigler Drive, also feels DigiHost's efforts to expand is against the moratorium in place.

"They are expanding, and the moratorium says you're not allowed to do that. And they need a new permit, because it wasn't zoned for them for this AI, it was zoned for Bitcoins," Laurendi said with WBEN. "We're developing one for them to sign. So that concerns me they are expanding, and we think it's against the moratorium."

Laurendi feels there continues to be too many unanswered questions about what DigiHost's intentions are with this new endeavor as a data center, and how that will further impact the residents of North Tonawanda.

"I'm an engineer, and I've installed diesel generators. I've installed a lot of equipment, cooling towers. [Rotunno] didn't really specifically state about these diesel generators, and they're very large and they're very loud," Laurendi said. "And you have to run them to test them to make sure they're going to work when you need them. They're 100 decibels, each one of them. ... They have, what they call, 200 ARMS Mods - that's the name of the pods they're putting in there. Each one requires two generators - 575 KVA and it produces 100 decibels. That's loud."

During the meeting, Rotunno was asked about the diesel generators needing to be run and said they would be for emergency use only, and will only run if the site loses utility power. That's a claim Laurendi does not buy.

"In the Carolinas, they run them if they need more power, and they run them, at least, 20 or 30 minutes a month in addition to test them, to make sure they're going to work when they need them. So he didn't get into it that much, and that kind of upsets me a little bit," Laurendi said. "Are they trying to hide something? They're very loud, they should be totally enclosed in soundproof enclosures. He did say they would be, but I want to look at them and see what kind of soundproof enclosures are you putting on them."

Laurendi feels all levels of government reacted too slow to the data centers boom across the nation, but is appreciative of the fact that people are raising their voices and expressing concern.

"The first AI center that came out, they should have immediately set regulations up. They didn't, and now they're all over the place. So the people are protesting, they don't want them in their area, and I don't know if that's going to help or not but I'm glad finally this country is waking up and saying, 'Wait, let's put a halt to all this,'" he said. "We're hoping Gov. Hochul signs that moratorium, but they need to look at these AI centers more closely as to what is involved, how they operate. What environmental risks are there? Not just the noise level, but what about the environmental risks? How much water are they going to use? How much power will they use? We're understanding that a lot of these places use so much power that it's actually affecting the people who live there."

Residents like Polito are certainly hopeful Gov. Hochul will sign the moratorium on data center.

"I hope New York State, I hope Gov. Hochul takes this step and signs this bill immediately so that other companies are not trying to get in under the door or get in before things change," he said. "It's crucial. This is something that's attacking not only our homes, it's attacking our environment, it's attacking the air we breathe, it's attacking our health."

As for Laurendi, he doesn't feel a one-year moratorium on data centers in New York will be enough.

"I did send a letter, I responded to Hochul about what we're going through here, and she should approve the moratorium. I don't know if she will or not, everybody says she will, but who knows. I mean, I hope she does. But they need to put a halt to this right away, and look at this very closely, how it affects the residents and environment," Laurendi said.

The City Planning Committee did approve to make it the lead agent for the project, but did table it to send the plans to the Niagara County Planning Commission for their referral.