Albert Lea has been chosen at last.

Wednesday, April 03, 2002

Albert Lea has been chosen at last.

Nine months after a fire that took around 500 jobs away from the community, Farmland Industries has decided to build a new meat processing plant in the city. A new plant will be built in the industrial park near Interstate 35, creating jobs for more than 700 workers. The construction is expected to take 16 months.

George Richter, Farmland Industries executive vice president and Refrigerated Foods division president, said if insurance settlements and economic incentives can be resolved, Farmland will break ground on a new 380,000-square-foot facility this spring, with processing expected to begin in fall 2003.

According to the term sheet presented by Farmland to the city, the new plant will cost $86 million to build. It is expected to produce 200 million pounds of ham and packaged pork products per year.

The plant will create 720 new jobs: 600 for hourly production, 70 for management and clerical and 50 for maintenance. The base wages are expected to be $10.55 per hour for hourly production and $14.55 for management and clerical. The total annual payroll will be $25 million.

The Kansas City-based corporation appeared to be preparing to build in Albert Lea, going as far as preparing initial drawings of the plant and having them approved by a city committee. Today, however, marked the first official announcement of its intentions this morning.

&uot;The community has been showing strong positive feelings to us. Nine months has passed since the fire and we felt it is very important to reach the decision,&uot; said Bill Fielding, President of Farmland Refergerated Group.

Fielding emphasized that the insurance negotiation still remains a key factor in starting the construction of $86 million new plant.

&uot;Insurance firms are trying to delay or reduce the proceeds amount, which is not responsible for the people who are out of work. We decided to announce our decision, because we wanted to be very clear about our committment to the community.&uot;

The plant will generate significant revenue for the city and local utilities. The city will receive an estimated $150,000 by providing 150 million gallons of water and $500,000 for wastewater treatment every year. The plant will also consume 21 million kilowatt hours of electricity annually, generating $1.3 million, and it will spend $600,000 for 108,000 mmbtu of natural gas.

The corporation’s design team will visit Albert Lea shortly and draw up final blueprints of the new factory. The city explains the new facility will be a state-of-the-art factory where all the production lines are accommodated on the same floor. It is expected that the construction will take about a year using panelized construction.

The selection apparently reflects the city’s efforts to assemble a land-swap package.

Richter said the decision on whether to rebuild in Albert Lea is a complex one that involves many parties. He said that the company will break ground and get employees back to work as soon as possible.

The proposal, approved by the city council on Oct. 8 last year, offered a 32-acre parcel of land in the industrial park, worth $800,000 to $900,000, to Farmland at the cost of $1. In exchange the city will acquire the 40-acre old site near downtown, and take over the demolition project for the burned-down facility. If the legislature approves the proposal, a tax-increment financing district on the new site will pay for the cleanup costs with tax revenue generated by the new plant.

Economic incentives from the city and state are also essential to a groundbreaking, Richter said.

&uot;Building a new plant, in Albert Lea or elsewhere, has to make economic sense for our farmer-owners. At this time, we are continuing talks with local, state and federal officials on tax increment financing for the new site, sales tax abatement, extension of unemployment benefits to our workers, and school aid to help ensure Albert Lea schools are not adversely affected by the students lost when families left the area for other jobs,&uot; Richter said in a statement.

The new plant still hinges on an insurance settlement. Eight insurance companies are negotiating with Farmland about the damage inflicted by the fire. While Farmland has been claiming a total loss of $86 million, the insurers believe that the old plant can be restored for around $25 million.

Farmland Industries Communication Director Sherlyn Manson said the time when construction will start still depends on insurance negotiations. She mentioned it also depends on the course of incentive packages currently being discussed in the state legislature.

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