Hut 8 facility on July 20, 2018. Courtesy: Scott Roblin

By Jessie Weisner

DRASTIC REDUCTION

Hut 8 receives $100,000 reduction on land lease rate

Jul 15, 2019 | 8:34 PM

MEDICINE HAT, AB — Bitcoin company Hut 8 is receiving a drastic reduction to the cost of their land lease.

City council approved the reduction during their meeting Monday.

The company has been leasing 10.94 acres of land located by Generator 16, Methanex and Canadian Fertilizers.

Until now, their lease rate has been $10,500 per month, or $126,000 per year. It has now been adjusted to $1,395 per month, or $16,740 per year.

When the lease agreement was being established, the city believe Hut 8’s location next to Generator 16 would benefit the company.

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It turns out it was more expensive to tie directly into the generator. As a result, Hut 8 submitted a request for a lease rate review.

“We thought we leased them serviced land and it turned out no,” says Mayor Ted Clugston. “They ended up paying all the costs to run the power to Hut 8 so they basically paid the servicing, so the value of the land went down and we could lower the rate.”

The city conducted two independent land value appraisals based on the updated information, concluding the land is worth $16,740 per year.

The adjustment was in effect July 1, 2019.