Helping crypto mining company put public's eye on business developer
Allison Todd, Mark Wetherington & Elke Crabtree / GNP contributors
Just a couple of years ago, the people of Greenville were against a crypto mining facility coming into the industrial area at the north end of the city.
Many believed it was unethical for the Greenville ENC Alliance to assist the crypto mining company, Compute North. But the public-private economic development partnership did what it had pledged to do since its establishment in 2019.
“Our organization’s mission is to market the region to support new and existing businesses,” said Maria Satira, the Alliance’s director of marketing and communications. “[And] maximizing opportunities for investment, job creation and economic growth.”
The Greenville News Project spent much of the fall looking into the question. It interviewed Alliance staff, members of its board of directors and others, and analyzed relevant documents. While the Compute North matter touched a nerve with many local citizens, the Alliance was ethical in its dealings.
Alliance formed for business
According its website, the Greenville ENC Alliance is a public-private partnership, which is a long-term agreement between the government and a private partner. The Alliance’s purpose is to provide for business recruitment, retention and expansion in Greenville and Pitt County.
The Alliance raises its funds through sponsorship from businesses, institutions and local governments. More than 60 businesses are investors in it, and they come from fields such as construction, banking, academia, real estate, pharmaceuticals and law.
Investors are classified into tiers based on the size of their contribution. The tiers are “Diamond,” “Premium,” “Gold,” “Silver” and “Bronze.” The highest is “Diamond,” and it designates those who contribute $250,000 or more.
The Alliance lists three investors as “Diamond” givers: ECU, ECU Health and Townebank of Greenville.
ECU pledged $500,000 in support to the Alliance, and it has paid $300,000 of that from central university funds, according to ECU spokesperson Jules Norwood. “ECU’s support is an example of the university’s commitment to regional transformation.”
Central university funds hold money from the state, and it can be used to pay for computer replacements for state-paid university employees, repairs and maintenance to state-supported ECU buildings and IT network upgrades. The money can only be spent on nonrecurring expenses.
ECU Health News Services said in an email that supporting the Greenville ENC Alliance is a part of its mission to “improve the health and well-being of eastern North Carolina. ECU Health is committed to supporting economic development for Greenville and the region as a whole.”
In its 2021 annual report the Alliance says it raised $452,000 in five-year commitments, helped create 837 jobs and finished eight projects totaling $172 million in capital investments. The report says that $150,000 of that will be going to Thermo Fisher, a pharmaceutical company in the north Greenville industrial park that plans to create 500 new jobs.
Then came the crypto miners
Compute North is another company that fit the Alliance’s mission of increasing commerce, creating jobs and diversifying Greenville’s industry.
The Alliance started working with Compute North in June 2021, six months after the company chose Greenville to house its next facility. The work of “mining” cryto currency happens in data processing centers that require an abundance of land and cheap power, major assets that Greenville has.
Compute North was expected to produce $33.5 million and 25 jobs, according to Greenville Utilities Commission meeting minutes from July 2021. That made the company an attractive prospect for the Alliance, GUC and the city council.
However, the city’s zoning code made it difficult for Compute North to find a suitable site for its facility. The Alliance proposed an amendment to zoning code that would help Compute North by redefining a data processing center and a modular data processing facility as separate uses. The city council approved the change on a 4-2 vote on Jan. 22, 2022.
A data processing center and a modular data processing facility are set up differently, explains Chatae Gooby, the city’s chief planner. A data processing center is self-contained within one building. But with a module processing center, the equipment is stored in a handful or several dozen modular or shipping containers.
With the zoning change in hand, Compute North set its sights on 24 acres of land near Belvoir Elementary School. But it was met with heavy opposition from residents and East Carolina University students because of noise and environmental concerns. In early 2022, protests against Compute North coming to the city broke out.
ECU student Erica Henry says the city council will do “anything that they feel like is going to make money. But it would not truly bring anything to the community of Greenville.”
Henry organized a protest on ECU’s downtown campus and encouraged students to speak out at a then-upcoming city council meeting.
By fall, Compute North was in bankruptcy court and looking to sell assets to cover millions of dollars in debt. The cryto currency market had collapsed. Its Greenville project was put on hold.
Ethics, right and wrong
Greenville ENC Alliance staff and its directors say they always practice ethics when conducting business. Each board member is required to sign an ethics pledge as well as take a course in ethics and meeting etiquette.
Norma Houston, an ethics expert and lecturer in public law, says that broadly, ethics is defined as “a conflict of interest … as being when the public official or employee puts his or her own interest, which can include financial interest or even other interests, ahead of their obligations to the public that they serve.”
Alliance directors say they keep their personal business separate from that of the Alliance, though as Greenville citizens they would benefit as any citizen would.
“With that growth, all business[es] benefit including unrelated and related parties who serve on the [Alliance] board and support the organization,” says E. Lynn Hudson, Alliance director and CEO of Hudson Brother Construction Companies. “Those involved must strive to remain neutral and ethical, allowing equal opportunity to all who might be affected.”
Not all Alliance directors were willing to be involved in the News Project’s story, though.
The News Product attempted to contact every member of the board of directors. Jon Anderson with Truist bank was unavailable for comment. Greg Steele, president of Townebank Greenville, agreed to answer questions via email but did not. Aaron Driver, Spense Cosby, Allison Siebel, William Bell, Scott Senatore, Joshua Schwartz and Michael Gregory could not be contacted. David Philyaw, Stan Armstrong and Mallory Pickett were not interested in commenting.
Todd, Wetherington and Crabtree reported this story for the Fall 2022 class, In-Depth Reporting Capstone.
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