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The Selkirk Sun recently published the "Rosencrantz Document" on its website.
What is the "Rosencrantz Document"? On January 24, 2022, Pend Oreille County Commissioner Robert Rosencrantz spoke about his concerns about the proposed Merkle Standard Cryptocurrency mining facility being constructed at the former PNC Paper Mill site near Usk. After his comments, The Newport Miner and the Selkirk Sun requested copies of Mr. Rosencrantz comments and supporting documents. The document includes over 40 pages of supporting evidence in addition to his comments and is well worth the read. The Selkirk Sun has now published them at the following links: Selkirk Sun Rosencrantz Document.pdf - Google Drive The following comments were made by Commissioner Robert Rosencrantz on January 24, 2022. Since they were published by the media as a matter of public record, we did not seek or receive permission from Commissioner Rosencrantz to use his comments here. I'll start by explaining what I'm doing today and why I'm doing it. First the why — Since becoming a commissioner, I've advocated multiple times for us to stand up a committee that would oversee everything occurring at the PNC site, whether Allrise or related entities. It's a work in progress and we've been moving in that direction. Recent events, which I'll get into, have convinced me that we need to speed up the process, as well as expand the scope and reach of our oversight. That's why we're discussing this today. My purpose is to get started on making this board actively and expansively involved in making sure that the people of Pend Oreille County get all the benefits and money they can from everything that happens at the PNC, that we protect them from anything bad that might occur because of what happens at the PNC site, and that we individually and collectively act so the public trusts us and has confidence in us. Now the what — I'm going to go through the issues related to the PNC site and Allrise, as well as current developments. This will be a statement of facts. I'll tell you now my summary opinion based on these facts, and that is that all these facts considered we better get going with oversight. Two important points:
Speaking strategically, as a board we need to anticipate events, not just react to them. Our obligation as leaders is to influence other people's actions, and to not allow their actions to unduly influence us. To that end I see at least three top-tier priorities:
So here are the facts and how the story grew in my mind: In open session John a few times said his wife Kim was working as an energy consultant in Nebraska. I thought, "that's interesting," so I did an internet search on `Kim Gentle, energy consultant Nebraska.' The result was a story from Stanton, Nebraska about Northern Data AG of Germany trying to do a major data center there. Northern Data describes itself as follows: "With its new class of green and highly efficient data centers, Northern Data offers Bitcoin Hosting & Services and cloud based High Performance Computing on a global scale." The article had a photo that said Kim Gentle was making the presentation. But it wasn't Kim, so I watched the video and learned that the woman in the photo was Amy Smock, previously of the Pend Oreille PUD. The story also stated that Monty Stahl was Northern Data's Managing Director for North America West. I recognized Monty as having been the person who bought 32 Telephone Road in Newport in 2018 for $159,000, put some bitcoin mining equipment on it and sold in in 2021 for $1,750,000. He sold it to Allrise under 32 telephone Road LLC. Now I was curious about Northern Data, so I started doing 'related entities' searches. Finding a relationship between entities does not prove a working relationship. They could be the equivalent of siblings or of third cousins twice removed. But after a lot of searching I found a related entity called Merkle Standard LLC, with the co-founder listed as Joshua Zappala. I met Joshua when I visited Allrise before becoming a commissioner. Young man who started his business career in 2019. Not the depth of experience I would expect for a co-founder that will be investing hundreds of millions of dollars. More on that in a minute. I searched the LLC records for Merkle and learned its CEO is Ruslan Zinurov. On Saturday morning, two days ago, I found on my internet feed a press release from Ruslan Zinurov of Merkle Standard that Merkle "Announced a new miner purchase order from [Chinese Company] Bitmain Technologies Limited. The executed purchase order is for 13,500 mining rigs." This is for their "Eastern Washington Flagship Site.' That would be PNC. The press release detailed the equipment, so I looked it up and calculated its value, which is over $150,000,000. According to Jim McCroskey that equipment can be classified as real property, so at a taxing rate of 0.9% could provide $1,350,000 in revenue every year to the County. That could fund other services or provide property tax relief to county homeowners. 13,500 mining rigs. Hundreds of megawatts of electricity. The unintended and unanticipated consequences of those deserve significant consideration. For reference I've included a couple articles that describe what some other communities have experienced. This all led me to conclude that we as a board need to treat this with urgency. You're either in control early or you're not in control. We need to take control and do it soon. This is both urgent and vital and we need to treat it that way. Jim McCroskey — $ for appraisals to makes sure that real estate and personal property fully assessed, taxed and collected Nicole Dice — All sales taxes collected Marianne Nichols — Monitor deeds to property and identify transfers Dolly Hunt — Help in writing the Resolutions needed to adopt BOC policies and money for outside legal counsel to help with complex agreements PUD — interlocal agreements covering things such as
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