Though the annexation would have no immediate, firsthand financial benefit for Riot, it represents an important chance for the company to make inroads with the local community. “It would just be a public relations kind of thing,” says Brewer. Riot is, he says, “desperate for some positive PR.”
Since February 2022, the company has sought a property tax abatement in Navarro County worth roughly $6 million over 10 years, according to an economic impact report commissioned by Riot at the local government’s request. But the tax discount has so far been withheld by the county government in the face of a backlash by a protest group and other local residents.
According to Riot, whether or not the abatement is granted could determine whether it builds out the Navarro County facility to full capacity or chooses to allocate the funds elsewhere. “The tax abatements would be an important part of making the economics work,” says Morgenstern.
The residents that oppose Riot in Navarro County cite various concerns, relating to potential noise pollution, the use of natural resources, and the facility’s possible effect on energy prices and the already-shaky Texas power grid. “They are hoping to win the bitcoin lottery and we are all subsidizing them,” says Jacky Sawicky, founder of the Texas Coalition Against Cryptomining, a local protest group trying to stand in the way of the expansion of Riot’s facility.
Riot rejects these concerns as unfounded and claims the stance of the Texas Coalition Against Cryptomining is not representative of the general population. “We absolutely want buy-in,” says Morgenstern. Riot, he says, aims to “mobilize the people that support us, of which there are many. They vastly outnumber the opponents, we believe.”
However, in March, before the Riot abatement was due to be voted upon by county commissioners, scores of local residents registered their disapproval. “We had so much negative input for an abatement,” says Brewer. “Between phone calls, emails, text messages, and people walking through the door, I had over 100 people encourage me not to give them a tax abatement.” Brewer says that not a single resident spoke in favor of granting Riot the discount.
The commissioners ultimately declined to vote on the matter, kicking the final decision to an unspecified future date. In the meantime, Riot needs a way to win over members of the local community.
Riot has already thrown money at the problem, writing checks worth more than $100,000 in aggregate to local school districts and other community initiatives. To allay concerns about its presence, it hosted two meet-and-greet sessions in May and June with local residents. The annexation by Oak Valley could represent another opportunity to bring people around.
In a May 24 email entitled “Thoughts About Your PR Needs,” Taylor, the mayor of Oak Valley, advised Schatz on how the additional franchise fees might best be used to ingratiate Riot with county commissioners, the gatekeepers of the abatement. “I have a couple of thoughts about how to turn public sentiment in your favor,” he wrote.
