MONEY

Iowa approves $11.5 million to Prestage for pork plant

Kevin Hardy
kmhardy@dmreg.com

Prestage Farms is poised to receive nearly $20 million in taxpayer incentives to help build a proposed $240 million pork plant in Wright County.

Though dozens of opponents flooded Thursday's specially called meeting, the Iowa Economic Development Authority board ultimately voted 8-1 to approve about $11.5 million in state incentives for the North Carolina-based company. Only board member Dawn Ainger voted against the measure.

To qualify for the state incentives, Prestage has committed to create a minimum of 922 full-time jobs. At least 322 of those positions must pay at least $15.54 per hour.

Wright County is also considering $8 million in local tax breaks, about 30 percent of Prestage's $2.7 million annual property tax bill, officials there have said. The state incentives are contingent upon local approval of Wright County's incentive package.

Thursday's was the latest in a series of contentious meetings addressing Prestage's proposed plant. Opponents from Wright County and across Iowa aired environmental concerns, particularly those over air and water quality.

Audience members shouted out during the meeting and chanted "shame on you" at its conclusion. Opponents were organized by Iowa Citizens for Community Improvement, a Des Moines-based group that heavily opposed the company's original plans to build in Mason City.

Protesters line the sidewalks, chanting at motorists to honk, in front of the Frank Lloyd Wright Hotel in downtown Mason City in May. They had gathered to express their opposition to the $240 million pork processing plant in Mason City proposed by Prestage Farms. The project failed in Mason City in May, and the company has proposed locating it in Wright County, south of Eagle Grove.

Mason City officials had planned on approving more than $11 million in local incentives, though the council there reversed course, ultimately killing the company's plans to build there.

On Thursday, Veronica Guyader held up a posterboard full of fly tape that she said was filled in a matter of days because of nearby chicken houses. Her Wright County home sits about 2.5 miles from Prestage's proposed plant and she fears existing problems like flies will only worsen.

She said she has no qualms with meatpacking. In 1980, her father earned $20 per hour at a Hormel plant. But with wages around $15 per hour, she said the Prestage plant will invite more poverty to Wright County.

"We need a quality company, not just a company that brings quantity," she said.

To qualify for incentives, companies must generally pay at least 120 percent of an area's laborshed wage, a complex state formula that computes a region's average wage. But because Wright County is considered economically distressed, firms there must only pay at the laborshed wage of $15.54 per hour to qualify for the state's High Quality Jobs Program.

While the board deliberated the project for about 30 minutes in closed session, only two members discussed the project publicly. IEDA Board member David Bernstein said the body's scope is limited to economic development.

"Our board deals with one thing: economic incentives," he said.

Bernstein, of Sioux City, said other agencies are responsible for environmental and building regulations. The economic development authority is only responsible for ensuring incentives go toward projects that meet the Legislature's established requirements, he said.

"We are not the DNR. We’re not the local zoning board, we’re not the local city council. We’re not the county board of supervisors," he said. "This is a local issue. All those folks have pushed this to our level to be approved. All we can analzye is the jobs, what the jobs pay, the fact that the benefits do meet the threshold."

IEDA created a special meeting to allow more than its usual 10 minute public comment period. Thursday's meeting included more than an hour of public comments. All told, 23 people voiced opposition to the project and 10 spoke in support.

Several local officials were among those backing the project.

Eagle Grove Councilman Mike Weland acknowledged the plant would bring some challenges to the community. But he said it will bring a much needed boost to the area, which hasn't seen major industry investment in more than 40 years, he said.

"I'd rather deal with struggles with growth than the struggles I've been dealing with on the council, with our decreasing population and our decreasing revenue," he said.

Several opponents noted Iowa's dominance in pork, corn and soybean production, saying Prestage already has incentive enough to build its slaughterhouse in Iowa near the supply chain.

"If they're determined to building this slaughterhouse, let them do it on their own dime," said Kathy Schnell, of Belmond. "They need us more than we need them."

JoAnn Hardy, of Mason City, said there is growing momentum in Iowa to slowing down the growth of large-scale agriculture.

"I have two sons who moved to Minneapolis with their families," she said. "They would never move back to Iowa for hog-slaughtering jobs."

Plus, she questioned the wisdom of sending taxpayer dollars to a large agricultural outfit that may increase water pollution, while Iowa is already struggling to find money to address water quality issues.

"This is insanity," she said. "Why do we have to pay on both sides?"

While many of the public comments centered on environmental concerns and fears over an influx of concentrated animal feeding operations, IEDA Director Debi Durham emphasized that Prestage's proposal centers around a processing plant, not CAFOs.

"So much of what they were dealing today was quite frankly was on the growing side and the frustration with no one addressing clean water," she told the Register. "But what we're dealing with is a manufacturing facility, and it's going to be a state-of-the-art manufacturing facility. And we're going to hold them and the county will hold them to the highest standards of operation."

State incentives require a local match and Durham noted that Wright County pursued Prestage after plans fell apart in Mason City.

"Prestage is a good company," Durham said. "They've been a good corporate citizen in our state. We have no reason to believe they will not continue to do so."