North Tonawanda Extends Data Center Pause as AI Conversion Plan Faces Pushback
North Tonawanda officials have extended the city’s moratorium on data centers for another year, halting for now a proposal to convert a long-disputed bitcoin mining facility into AI infrastructure as Western New York communities move to slow or block large-scale computing projects.
The Common Council voted unanimously Tuesday to extend the pause after residents urged the city to write stricter rules before allowing any data center expansion, WIVB reported. The moratorium affects a proposal tied to the existing crypto mining operation on Erie Avenue, a site that has drawn years of complaints over noise and environmental impacts.
“We have all witnessed firsthand how long it takes to rectify problems created by just one crypto currency mining operation,” one resident said at the meeting.
North Tonawanda Mayor Austin Tylec said the city needs more time to update its zoning and oversight process after what he described as years of problems connected to the existing facility.
“There’s going to be a much higher level of scrutiny than the past administration allowed to happen when this project came here,” Tylec said, according to WIVB. “Our number one concern is residents … we need to put some protections in place, hit the brakes, and then see how we may be able to accommodate any types of new industries.”
He added: “We will not be the guinea pig any longer.”
The local debate centers on a facility that has become a flashpoint in New York’s broader fight over energy-intensive computing. The North Tonawanda site is associated with Digi Power X Inc., the company formerly known as Digihost Technology Inc., and its local subsidiary World Generation X. WKBW reported earlier this month that World Generation X was seeking Planning Commission approval to redesign the Erie Avenue operation, with plant manager Dan Rotunno saying the company had removed large portions of existing containers and that the new equipment would no longer be used for bitcoin mining but for AI infrastructure.
Digi Power X has been repositioning itself from cryptocurrency mining toward AI data centers and GPU compute. The company, which trades on Nasdaq under DGXX, describes itself as a vertically integrated AI infrastructure operator with owned power generation, substations, Tier III data centers and bare-metal GPU compute. In a 2025 shareholder letter, the company said its name change from Digihost reflected a shift from blockchain infrastructure to a broader energy and AI infrastructure platform.
For North Tonawanda residents, however, the proposed AI conversion is being viewed through the history of the existing mining operation. The Fortistar North Tonawanda power plant at 1070 Erie Ave. was formerly a gas-fired facility used far less frequently before Digihost moved to acquire it and expand adjacent cryptocurrency mining operations. New York state utility records identify Fortistar North Tonawanda as a 55-megawatt natural gas-fired cogeneration facility.
The site has also faced legal and regulatory scrutiny. In 2024, a New York court vacated the Public Service Commission’s earlier approval of the transfer of the Fortistar power plant to Digihost International after environmental groups challenged the review under the state’s Climate Leadership and Community Protection Act. The legal fight has kept the facility under a spotlight as residents and advocates argue that the bitcoin mining operation changed the use of the plant and intensified noise and emissions concerns.
The debate reflects a widening collision between AI infrastructure demand and local land-use concerns. Bitcoin mining sites with existing power access have become potential candidates for conversion into AI or high-performance computing facilities, but communities that have already experienced mining-related noise complaints are pushing for clearer rules before allowing operators to repurpose those sites.
