MONEY

Investors want to revive closed Tama meat plant

Donnelle Eller and Matthew Patane,
deller@dmreg.com;

A long-shuttered meatpacking plant in Tama plans to reopen, potentially employing up to 600 workers.

Iowa Premium Beef plans to invest nearly $50 million to turn the former meatpacking plant into a “state-of-the-art beef production facility.”

A major investment in the project appears to be coming from Sysco Holdings, a subsidiary of Houston-based Sysco Corp., a $44 billion publicly traded food service company.

A call to the company late Thursday wasn’t immediately returned. Calls to Iowa Premium Beef and Tama County economic development leaders also were not returned.

Sysco Holdings and Sysco/TBI Capital plan to invest about $36.2 million into the project, according to state project documents. The project seeks $4 million in Iowa high-quality-job tax credits. The Iowa Economic Development Authority Board is scheduled to hear the request today.

The state document says Iowa Premium Beef plans to pull cattle from 150 miles around Tama to provide 100 percent premium Black Angus beef for “food service, retail and international customers.”

The state said the project would initially create 120 jobs paying a minimum of $15.42 an hour. Production is expected to begin in the fall.

“It’s huge,” Tama Mayor Dan Zimmerman said of the project. “It will create a big economic boost for the community.”

Tama County has one of Iowa’s highest unemployment rates at nearly 8 percent. Only three other counties have higher jobless rates.

The statewide unemployment rate is about 4.4 percent.

Zimmerman said the group behind the project is “doing it right.”

Without providing details, Zimmerman said the financial backing is solid. “If they have some lean months, it will still operate,” he said.

Residents are hopeful but somewhat skeptical about the project. “I tell people, ‘You’ve got to give these guys a chance,’ ” Zimmerman said.

Tama has seen many starts and stops in reopening the former IBP plant, which shuttered in 2000. A producer-led cooperative was among those whose efforts to reopen the plant and keep it operating failed.

Dal Grooms, a spokeswoman for the Iowa Cattlemen’s Association, said the group has no financial interest in the project.

But the plant will give producers another market for their cattle. It’s the second such project to be announced over the past year.

LimeSprings Beef plans to begin production in the fall. Plant officials said in February that the facility would process 108 head of cattle per day.

The Tama plant could initially process as many as 1,100 head of cattle a day, potentially doubling its capacity over time.

Tyson Foods, with sales of $8.9 billion last year, said last month that it would keep open its meatpacking plant in Denison, which employs 400 workers.

In 2010, the company said it was considering closing the plant, which is more than 50 years old, because of decreasing cattle supplies in the area. At the same time, Tyson also was investing $90 million in its Dakota City, Neb., beef plant, including the addition of a modern slaughter floor.

Tyson said in March that market conditions had improved.

5 other companies seeking state aid

In addition to Iowa Premium Beef, five other companies will be seeking aid from the Iowa Economic Development Authority at today’s meeting. One of those is behind Project Alluvion, the proposed data center for West Des Moines that would bring 84 jobs.

The other four companies are:

Delta Dental of Iowa, which is requesting more than $250,000 in tax credits. The dental insurance provider wants to expand its central Iowa headquarters by adding 29,600 square feet to its current building. The project is expected to cost about $9.4 million.

Dickten Masch Plastics, a plastics molder based in Wisconsin, is requesting about $160,000 in tax credits to expand its operations in Ankeny. The project is expected to cost about $5.3 million.

IP Pathways, a Des Moines-based data center storage and IT services company, is requesting $37,500 in tax credits and $240,000 in loans. The company is proposing to lease and remodel a currently vacant data center in Urbandale, a project that would cost about $1.7 million.

Hirschbach Motor Lines, based in East Dubuque, Ill., is requesting $225,000 in tax credits during an eight -year period. The long-haul trucking company is planning to buy a building and move some of its Nebraska operations to Sioux City, which would cost $850,000.