Lede
The city of Kingsport, Tennessee has reached a preliminary agreement to adjust its local landscape to better accommodate the growing digital economy. During a recent legislative session, the Board of Mayor and Aldermen approved changes to the city’s zoning rules, a decision that could pave the way for cryptocurrency mining companies and data centers to begin operating locally within the municipality. The board’s action was decisive, as members voted unanimously on the first reading of an ordinance specifically designed to amend the land zoning related to data centers and cryptocurrency mining sites. This legislative movement follows a significant recommendation from Kingsport’s planning division, which was originally issued in December. The newly approved ordinance is intended to set comprehensive guidelines on exactly where these types of facilities could be located within the city’s boundaries, ensuring a structured approach to industrial growth.
While the initial approval marks a major step forward for the city, the legislative process is ongoing. The ordinance requires a second vote by the board before the amendment is formally adopted and integrated into the city’s governing documents. By taking these steps, Kingsport officials are working to update an industrial district zoning code that was originally created without the anticipation of mass digitization. This forward-looking text amendment is designed to allow the city to appropriately locate and permit these uses as staff members expect to see an increasing number of new digital data-based industries looking for viable locations to develop their operations in the near future.
Context
Kingsport’s move to update its zoning laws is situated within a broader regional context of cryptocurrency and data center expansion. With an estimated population of 57,000 people, Kingsport is a significant urban center, sitting in the top 20 of Tennessee cities by population. This status makes its local legislative decisions particularly influential within a state that is already considered by many industry participants to be a friendly environment for cryptocurrency miners. The demand for industrial space suited for high-density computing is evidenced by recent activity in nearby areas. For example, in 2024, the mining company CleanSpark reached a major agreement to purchase seven mining facilities located around the Knoxville area. Such transactions underscore the growing interest in Tennessee’s infrastructure and power resources for digital assets.
The city’s planning division recognized that the previous industrial district zoning code text was outdated, as it was originally drafted without the anticipation of the mass digitization that characterizes the modern economy. By amending these rules now, Kingsport is preparing for an expected influx of digital data-based industries that are actively seeking new locations for development. The goal of the amendment is to provide a clear regulatory pathway for these companies, allowing the city to manage growth while ensuring that new industrial uses are compatible with the community’s existing layout. This proactive stance helps the city remain competitive in attracting technological investment while maintaining its local governance standards.
Impact
The impact of the new zoning ordinance is defined by a set of strict operational guidelines designed to regulate the physical presence of cryptocurrency mining and data centers. According to the approved amendment, any cryptocurrency mining companies wishing to operate within Kingsport would be permitted to do so only if they are situated in a “completely enclosed building.” This requirement ensures that the industrial activities are contained and do not utilize open-air configurations that might conflict with the local aesthetic or safety standards. Additionally, the ordinance establishes a significant buffer zone between these industrial sites and residential areas. Specifically, cryptocurrency mining operations must not be located within 500 feet, or approximately 152 meters, of any residential building or residential district. This distance requirement is a key component of the city’s strategy to minimize the footprint of high-density computing on the daily lives of its citizens.
Furthermore, the ordinance addresses potential environmental concerns through a mandatory approval process. Any proposed cryptocurrency mining operation would be subject to approval based on the results of a detailed sound study. This requirement highlights the city’s focus on managing the acoustic output of these facilities, ensuring that the sound levels remain within acceptable limits for the surrounding environment. By setting these specific parameters for enclosure, distance, and noise, Kingsport aims to mitigate the potential negative externalities often associated with mining operations. The guidelines provide a clear framework for companies to follow, ensuring that the benefits of industrial development do not come at the expense of the residents’ quality of life.
Outlook
The outlook for Kingsport’s industrial development appears increasingly digital as the city moves toward the final adoption of these zoning amendments. The unanimous approval of the ordinance on its first reading suggests a strong political will to integrate cryptocurrency mining and data centers into the local economic landscape. Once the required second vote is conducted and the amendment is formally adopted, the city will have a robust legal framework in place to govern the placement and operation of these facilities. This legislative clarity is expected to attract new digital data-based industries that are currently looking for locations to develop. By proactively creating guidelines, Kingsport is positioning itself to handle the expected shift toward mass digitization that its planning commission has identified as a future certainty.
In the coming months, the focus will likely shift to the implementation of these rules as companies evaluate Kingsport for potential sites. The requirement for sound studies and the 500-foot residential buffer will be the primary standards by which new applications are judged. As a city in the top 20 of Tennessee by population, Kingsport’s success in balancing technological growth with community protections could serve as a precedent for other municipalities across the state. The region’s reputation as a friendly environment for miners, bolstered by major investments like CleanSpark’s 2024 facility purchases near Knoxville, suggests that Kingsport is entering a competitive market. The finalization of these zoning rules will be the determining factor in how successfully the city can leverage its infrastructure to become a hub for the next generation of data-driven industry.
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