Tyler residents had the opportunity on Monday night to share feedback and learn more about a proposed Bitcoin mining facility planned near downtown.

Several residents expressed extreme frustration over the project, citing concerns about the location, noise impact, environmental factors, the risk of harming property values and more.

Tyler City Council District 2 Councilmember and Mayor Pro-Tem Petra Hawkins helped facilitate the meeting with Vulcan Core, a data center operator and infrastructure developer, about the possible 12 megawatt cryptocurrency mining facility planned along West Erwin Street. A room full of residents gathered at The Meeting Place — which is near the facility site — to hear from and ask questions of Vulcan Core representatives.

“The purpose of the meeting was simple: to provide residents with an opportunity to meet the owners, builders, and business partners directly, hear information firsthand, and ask questions about the proposal,” Hawkins said in a Facebook post. “I appreciate those who came prepared, engaged in respectful dialogue, and took the time to learn more about the project.”

Attendees were instructed to write questions on a pieces paper, which were picked up and answered in front of the audience by Mark Buntsev, community liaison, and Mitch Brown, local project manager and coordinator at Vulcan Core.

While the property has already been acquired with the intention to become a data center, a zone change request for a special use permit is still under review. Next month, the item will go before the City of Tyler’s Planning and Zoning Department for consideration. If the permit is approved, it will still will require city council approval.

Operations 

In August 2024, Barrio Energy announced it closed on the property and was set to start rehab work on a “state-of-the-art” data center located on Erwin Street. Barrio is partnering with Vulcan Core on the Bitcoin mining facility.

“This project, which transforms a building within an Opportunity Zone, marks another significant milestone in Barrio Energy’s ongoing commitment to expanding digital infrastructure across Texas,” the company said in a press release.

The facility would serve as a specialized data center dedicated to processing transactions and securing the Bitcoin network.

“Tyler offers a dynamic business climate and a talented workforce, making it an ideal location for our new data center,” said Ivan Pinney, president of Barrio Energy. “We are proud to contribute to the local economy while continuing to support the growth of the digital infrastructure that powers our connected world.”

According to Bitcoin’s website, Bitcoin is a digital currency that is created through mining facilities. Bitcoin can be sent and received directly over the internet without the need for banks, payment processors or governmental involvement. Instead, the currency relies on a public digital ledger, or blockchain, and is globally distributed across a network of servers.

“The size of this one is drastically smaller than most other data centers in Texas,” Buntsev said. “The total square footprint of this piece of land is around 1.8 acres and will have eight containers that are 40 feet by about 8 feet.”

Buntsev said Vulcan Core chose the 1101 and 1105 West Erwin Street location due to it being next to an electrical substation with available capacity, access to high-voltage power infrastructure, and the opportunity for city oversight and regulation. The project will utilize an already existing building on the property after it’s renovated. The equipment containers will be screened behind fencing.

“Four containers will be for computers and four of them will be for the cooling equipment,” Brown said. “The building will be used for offices and it will look like the renderings, but prettier with flowers and shrubbery.”

Buntsev said the facility plans to use MicroBT mining equipment and have a dedicated fiber internet connection, although there will be no major backup power generation system. In the case of major power outages, Buntsev said the facility would shut down and restart once service is restored.

“Data centers are not accessible to the public,” Buntsev said. “It needs to be built properly, and what I mean by that is it is overwatched by the city planning and zoning and it needs to be approved not only through them but also through Oncor. This isn’t our first rodeo.”

Officials say the facility will provide seven to 10 full-time jobs with an approximate pay range of $25 to $45 per hour. The permit application states the facility will maintain continuous 24/7 on-site staffing with one to two employees on site at any given time.

These jobs are geared toward engineers. The facility will also have potential internships and educational partnerships with local higher education institutions, Buntsev said.

The facility will be utilized only for Bitcoin mining and cannot be used for Artificial Intelligence, military, surveillance or data collection purposes, Buntsev said. It will be subject to Tyler’s zoning requirements, permit conditions, building inspections and fire and safety regulations.

Tyler already has the Tyler Vault Data Center which has operated in the city for over a decade, located below ground inside the Plaza Tower, so the proposed project would be the second data center in downtown.

The public’s top concerns 

Noise and power impact 

Brown said the project had an independent sound study, which measured the neighborhood ambient noise around 45 decibels.

“The normal nighttime decibel readings for this area is 45, and we had an acoustic engineer out of Houston come in and place his equipment on the property and for 48 hours. He measured the trains, the ambient noise and all the different things that came in,” Brown said. “His study determined the noise from these fans operating at full speed at the nearest house 230 feet away is 35 vessels, so 10 vessels below the ambient sound.”

Brown said because the decibel scale represents sound energy non-linearly, the louder sound dominates, meaning the natural ambient sound of the area will not change enough to be noticed.

“The fans are variable speed fans and they range from 10% up to 100%,” Brown said. “They come on based on temperature.”

Buntsev said utility studies determined sufficient excess capacity at a nearby substation for power and the facility would use industrial high-voltage service separate from residential service.

“There are two separate systems,” Buntsev said. “If there’s an issue with the residential and rental side we would actually get a call to shut everything down to use that power and will be fined heavily if we don’t.”

Buntsev said the company does not receive direct utility payments for shutdowns and also does not plan to engage in electricity trading or resale.

The permit application submitted to the commission states a community noise hotline will be established and answered by an operator, who will respond with 48 hours to any verified noise concern and document an investigation and remediation plan for verified concerns.

Water, cooling and environmental factors 

Rather than utilizing municipal water, the Tyler Bitcoin mining facility will utilize a closed-loop design using distilled water mixed with propylene glycol (antifreeze), which has a leak containment system if that were to happen, Buntsev said.

“It is a closed-loop system that means that there is no discharge,” Buntsev said. “The only discharge is the hot air that comes out.”

Although there will not be any routine water discharge, wastewater release or groundwater withdrawal, many residents expressed concerns about the heat and environmental impact from the air discharge.

“There are a total of 22 fans per container, 88 fans in total so it will take in ambient air and pull it upwards,” Buntsev said. “The heat at which it comes out at is about 160 to 180 degrees Fahrenheit, so it’s less than that of most industrial processes. The air is being brought through the system in the same way that a car radiator works.”

The company argued that the heat dissipates quickly and would have minimal environmental impact, but no long-term environmental impact study was presented at the meeting.

The permit application states no diesel generators or other on-site combustion equipment will be installed or operated at the facility. It will also not produce any combustion emissions. Hazardous materials will not be stored or used at the facility “beyond standard operational
supplies consistent with normal data center maintenance,” the permit application states. Petroleum fuel storage will not be allowed at the site.

Taxes, safety and property values 

Vulcan Core stated it will not be seeking any tax abatements, incentives, variances or special exemptions.

“There’s no abatement that we’ve asked for at all and all the taxes the building and business will pay will go to the normal taxing authorities and get dispersed how they do that,” Brown said. “We’re not requesting anything.”

The estimated tax generation is approximately $35,000 to $45,000 per month and the yearly cost on electricity would be approximately $500,000 annually, Brown said.

On the safety side, Buntsev said the facility would be engineered to meet all Tyler’s building, electrical fire and safety codes. In case of a rare failure, Buntsev said fluids would be handled by specialized contractors.

Many residents repeatedly expressed concerns that nearby home values could decline, but Buntsev said Vulcan Core does not believe the project will negatively impact selling or buying homes.

“There will be no negative effect of this center to any of the surrounding homes and that’s why we did the sound study because that was one of our biggest concerns,” Buntsev said.

Buntsev said the company’s reasoning is the low projected noise, minimal traffic, landscaping and visual screening and limited neighborhood impact. The developers have not conducted a property-value study.

Next steps 

Next steps include adjusting the plan based on the public’s concerns then presenting the proposal to the City of Tyler’s Planning and Zoning Department next month.