May 4, 2016
Mason City, Iowa, missed its chance to boost its economy and add 1,000 jobs when the City Council failed to pass the development agreement with Prestage Farms and its subsidiary, Prestage Foods of Iowa. After a seven-hour debate, the final 3-3 vote seals the fate that a $240 million state-of-art pork processing plant will not be built in the community.
“We are disappointed. We are little surprised,” Ron Prestage, DVM, told National Hog Farmer. “We had such enthusiasm by the city officials when this whole thing started. It could not have been more positive.”
However, in the weeks after the announcement of its intention to build a new processing plant in Cerro Gordo County, the Prestage Family and city officials soon watched the opposition unfold. Similar to all opposition against any new animal agriculture business development, those objecting range from local to out-of-state residents toting the same concerns over and over in three consecutive meetings.
Prestage says most of the concerns by the opposition only fuel the myths about U.S. pork production.
According to the challengers, it would take an “unbelievable amount” of new concentrated animal feed operations or modern hog farms to supply the plant. An interesting argument since Iowa is already the leading state for pork production, producing one-fourth of the U.S. pork. In fact, Steve Meyer, vice president of pork analysis for Express Markets Inc., has repeatedly reported that packing capacity is tight as U.S. pork production climbs and a large amount of hogs will be coming to market starting this fall.
Secondly, the economic incentive was corporate welfare and Prestage Foods would receive a monetary kick-back for building in Mason City. Prestage says, “That is absolutely untrue. They were not giving us a penny. What they were giving us was a 50% tax abatement which is a lot less than a lot of many companies have given in many location. When you talk about a quarter of a billion investment, we were just getting an abatement for 10 years on some of the taxes.”
Opponents also voiced concerns over environmental issues, damaging property values and having to accommodate non-English speaking workers. Despite the Prestage Family’s proven environmental record and excellent treatment of their workers, the objectors still aired those concerns, Prestage notes.
As the concerns surface, Prestage says in good faith the company tried to meet the opposition halfway and clear up misunderstandings. One thing Prestage agreed to was a 2.5 mile buffer zone around Mason City and Clear Lake where no new hog farms could be built. It was not the company’s idea, but the City Council’s as an attempt to address the concern over new hog farm construction – a notion that now Prestage openly admits may have been a mistake.
Although Prestage raises hogs in five states including Iowa, the family has no intention to build a new hog farm in Cerro Gordo County. Initially, Prestage Farms current hog operation will supply 60% of the plant and the remaining hogs will be purchased from independent producers.
On the day of the Council meeting, approximately 50 people gathered on the lawn of the Mason City library to rally against the new processing plant proposal. The Iowa Citizens for Community Improvement organized the protest. The opponents told local media they will not back down.
Prestage notes the political pressure on six city councilmen was grand. Frankly, he says “three of them caved to the pressure.”
Mayor Eric Bookmeyer could not legally cast a tie-breaking vote, due to the size of the financial incentives involved. Nevertheless, Bookmeyer in the meeting expressed his displeasure with the defeat of the proposal. He said, “It fascinates me that we’re going to go to HyVee in the morning and forget where their food comes from. I wonder where we’re at when we’re not going to participate in the largest industry in Iowa. It’s sad.”
Not throwing in the towel
As it stands now, Prestage can still move forward with the plans to build the processing plant on the south end of Mason City, however without the financial incentive package. While the Iowa Economic Development Authority Board has already agreed to provide Prestage Foods about $11.5 million in tax incentives and $3.3 million in job training assistance, the state incentive is dependent on a local development agreement.
Still, Prestage firmly states, “We have not given up our plans to build a plant. We are going to have due diligence, find a place and dig deeper to make sure that we really have the support at the next site that we identify. I am sure there are other sites out there. This is a setback. It will not deter us from pursuing our beliefs it will still be a good thing for the pork industry for an American family to enter this business.”
In reflecting on the recent turn of events and replaying the three Council meetings in his head, Prestage says it is foolish to build a plant in a community that is so divided over a new enterprise. He says, “Business can be a lot of fun. It is not necessarily fun when you have people making false accusations against you. I do not know how smart it is for us to proceed forward with this plant if we had won the vote last night.”
Prestage firmly states the family is going to rally the troops and move to plan B, finding a suitable location for the processing plant. Honestly, he says, “We thought Mason City was a good sized town where we would not be too big of an influence but a good opportunity to hire executives that would be happy to live in the town. A population base to start hiring people from and town that needed new industry. It certainly defines Mason City but at the end of the day we miscalculated their willingness to stand up to that political pressure.”
Bill Northey, Iowa Secretary of Agriculture hopes the Prestage Family keeps their sights on Iowa. He says, “I’m hopeful that an agreement can be reached for this plant to be built in Iowa, either there in Mason City or possibly someplace else. It would be a good thing for agriculture, especially pork producers that would benefit from additional processing capacity, and it’s going to be a good thing for a community that can see that many jobs. We need the processing capacity that a state of the art plant like this proposal would help provide.”
The prospect of the new processing plant to be built in Iowa is strong however Prestage confirms it may delay construction and the family researches all available options. In conclusion, Prestage stresses, “We have learned lessons on a better approach the next time around but we have not given up.”
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