Clarification: A prior version of this report mistakenly stated that Bitcoin Mining World had a connection to the Bitcoin mining operation located near a school. Actually, the company is involved in the sale of a separate mining facility situated on the opposite side of Interstate 75, approximately a half-mile away. My UP News is unaware of any complaints from the community against this second location on the west side of the highway.
DAFTER TOWNSHIP, MI (WJMN/WBUP) — Following concerns raised by the head of a local school about the disturbance to her students, representatives from a Bitcoin mining venture have pledged to reduce the noise generated by their equipment. This raises questions about the ownership of the equipment and the reasons behind its placement so close to the school.
Susie Schlehuber serves as the superintendent of Lake Superior Academy, a Montessori school that focuses on outdoor learning for students in kindergarten through fifth grade.
Established by Susie and her husband in 2016, the school is located on a large, natural area within Dafter Township. This small community of roughly 1,300 residents is situated in the eastern Upper Peninsula, about a 20-minute drive south of Sault Ste. Marie.
“Before the Bitcoin mining operation started, this was an ideal setting for education,” Schlehuber explained. “The noise has disrupted our entire school philosophy and the foundation upon which we were built.”
She noted that the constant humming from the cooling fans has made outdoor instruction impossible. “We can no longer hold classes outside. We must keep the windows shut. Students can’t even sit outside near the lilac trees and write in their journals anymore.”
Schlehuber mentioned that the Bitcoin machines were activated in March. Coincidentally, the school administration was beginning to plan a significant expansion, including two additional classrooms that would have accommodated 40 more students beyond the current enrollment of approximately 90.
These expansion plans are now on hold.
“We couldn’t open classrooms in that area due to the noise. The project has been shelved. Earlier this week, we contacted 40 families, expressing our gratitude for their interest in our school and apologizing that we cannot offer them a place at this time.”
Neighbors have also been monitoring the noise levels, stating that the volume of the fans increases with the temperature. They report noise levels ranging from 70 to 90 decibels across the street from the facility.
COMMUNITY MEMBERS ATTEND PLANNING COMMISSION MEETING
On June 5, the school shared a message on its Facebook page stating, “Bitcoin is cool, but not near a school.” Five days later, residents gathered to voice their concerns at a Dafter Township Planning Commission meeting.
Township Supervisor Bob Brown stated that the Bitcoin mining operation was not on the meeting agenda but that he had been informed that many residents intended to speak on the matter.
Brown contacted the Bitcoin mining operation owners and asked them to attend the meeting to address the concerns.
“The room was packed. I was surprised by the number of vehicles outside the township hall,” said Kalvin Carter, the head of Up North Advocacy.
During the meeting, company representatives listened to the public’s concerns.
Schlehuber, Carter, and others said they felt heard and expressed cautious optimism about the company’s promise to provide potential solutions to the noise problem within two months.
ANONYMITY CONCERNS
Many attendees noticed that the representatives were hesitant to provide their full identities.
Carter mentioned that some attendees requested clarification about the representatives’ identities and the company they represented. One man only gave his first name and said he represented Alpha Watt.
“Some community members felt it seemed like a shell company. They wanted to know who the parent company was, and who their parent company was. The representatives didn’t really have an answer,” Carter stated. “I believe they were intentionally being vague about who they were and who they represented.”
Supervisor Brown later told us that the company’s name is Odessa Partners, LLC.
We also discussed residents’ complaints about potential code violations due to the noisy equipment. Some believed the operation was in violation due to the noise level or for misrepresenting its plans to the municipality as a storage facility.
Brown said that the operation is not violating noise ordinances because Dafter Township does not have one. He also stated that he did not see any rule preventing someone from keeping loud fans in a storage facility.
The situation has prompted the township to begin updating its master plan to account for similar situations, acknowledging gaps in the local laws.
Brown advised other small municipalities to proactively update their local laws to prevent similar situations.
RESPONSIBILITY FOR THE NOISE
Schlehuber emphasized that the school does not oppose cryptocurrency itself, but is concerned about the noise disrupting the school.
“Our children spend 8 to 10 hours a day here, and we run a full year-round program,” she said. “I am concerned about what motivated someone to place a Bitcoin mining operation in this location.”
We received a call from Jayme Kurtyka, identified as a consultant for the Bitcoin mine owners who was assisting some friends.
Kurtyka, who works in finance, said he had local connections and was helping the owners address the noise issue. He would not identify the owners, citing safety concerns, but agreed to pass along our contact information.
We also explored the possibility that Cloverland Electric was involved in the placement of the machines.
Schlehuber recalled that in a February meeting, the Bitcoin mine owners told her that Cloverland played a significant role in the decision to locate the operation there.
“They specifically told us that Cloverland Electric approached them and asked them to come to this location,” Schlehuber stated.
A Cloverland spokesperson confirmed that they serve two Bitcoin mining facilities in Dafter and one in Newberry.
Regarding whether they were involved in attracting the data miners, the spokesperson wrote,
“Bitcoin mining operations seek locations with dependable, low-cost electricity, available land, and nearby substations to reduce transmission losses.
Cloverland stands out as one of the most affordable electricity providers in Michigan.”
FURTHER INVESTIGATION
We investigated business records to determine the ownership of the Bitcoin mining machines.
Rumors suggest a connection between the Dafter operation and a company called Ibanera, which is currently involved in a multi-million dollar lawsuit in Florida, where a bank from the Bahamas accuses the company of misappropriating millions of dollars.
According to Florida business filings, Odessa Partners is linked to Elias Industries and Valletta Corp.
Valletta’s filings led nowhere, but Elias Industries showed connections with Phoenix Connect and Michael Carbonara.
Michael Carbonara is also listed as a co-defendant and CEO of Ibanera in the lawsuit.
Carbonara’s name appears in Odessa Partners’ company records.
We received a text message from someone claiming to be Michael Carbonara but received no response to our follow-up attempts.
Our research has not definitively confirmed if the three Michaels mentioned in the documents are the same person.
ONLINE RESOURCES
We reviewed a message from Carter, a YouTube video promoting the “gravitational center of the universe.”
The video, titled “Bitcoin Mining in Northern Michigan,” highlights the advantages of the Dafter property for crypto miners: affordable and reliable electricity, accessible land, and a community that can support machine maintenance. It comes from Bitcoin Mining World, a company specializing in Bitcoin mining realty and education.
Scott Offord, CEO of Bitcoin Mining World, clarified that his company is not involved with the site near the school, but rather with a different location on the other side of I-75, roughly half a mile west.
My UP News has not received any complaints about the west Dafter site or its owners.
Offord said Bitcoin Mining World was hired to help sell the west Dafter operation.
Offord stated that he was not familiar with Carbonara, but that the owners of the machines were two other men, one from Canada and one from the United States.
There does not appear to be any connection between the east and west Dafter sites.
Offord said that Cloverland may have more involvement in the west Dafter site than just being an energy provider.
“It’s partly a partnership with the local utility,” Offord explained. “The mining farm is located on their property, and the owner of the Bitcoin mining farm and equipment is leasing the land from the utility.”
Offord observed that community tensions often arise from mining sites that are close to residential areas.
“Bitcoin miners may lack experience in the area and be overly eager to start quickly,” said Offord. “They may not take the appropriate steps to mitigate potential issues in advance.”
Offord said that the quality of life issues raised in Dafter should concern everyone involved. He advised potential mine owners to prioritize building relationships with neighbors.
“If Bitcoin mining farm operators and builders were more aware of how their operations could affect others, they could avoid these types of situations,” Offord stated.
Offord mentioned that the west Dafter site could be purchased for around $1 million. He also recommended investing in Bitcoin mining when the currency is inexpensive.
My UP News is still trying to confirm the owners of the east Dafter site and the extent of Cloverland’s involvement in choosing the location. Please send any questions or information to sperkins@myupnow.com.
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