After embezzler Phil Friend, the CEO of Ridgefield Farms South Dakota LLC, came to Huron and bilked some $3 million from the state and local investors in 2004, I’ve questioned the financing of the Northern Beef Packers project in Aberdeen. I have never been a fan of useless economic development incentives to large corporations. In fact, research confirms that there is virtually no association between economic development incentives and any measure of economic performance.
Therefore, in April of 2012 I requested that one of our senior fiscal analysts procure updated information regarding the Northern Beef Packers project in Aberdeen from our Governor’s Office of Economic Development (GOED). I asked the following questions:
What is the total of all monies granted and loaned to this project or other entities relating to this project by the State of South Dakota? The answer:
a. Future Fund Grant $1,200,000 NBP-to assist business 1 June 2010
b. Future Fund Grant $843,000 NBP Workforce Development Training-30 June 2010
c. Future Fund Grant $200,000-Brown County-Road Construction 29 October 2010
d. Future Fund Grant $65,000-Mentor Group-NBP appraisal-24 November 2010
e. Future Fund Grant $1,000,000-to assist with costruction-8 December 2010
f. Future Fund Grant $150,000 -Aberdeen Development Corporation-Marketing-2010
g. Future Fund Grant $2,000,000-December 2011- (These dollars were matched with an additional $1,000,000 from the SD Development Corporation for a total of $3,000,000 which was loaned from SDDC to NBP for interim construction needs until the TIF bonds sold.)
h. REDI Fund Loan $5,000,000 NBP FY 2010
i. SD Department of Agriculture-$300,000 grant for Certified Beef Program 1 Jan. 2011
j. (Refunds-state construction tax-$844,994.30 according to SD Department of Revenue)
2. What specific criteria was used in determining grant and loan monies for this project? Specifically, why was the decision made to grant and loan money to the Northern Been Packer’s plant project when other beef plants have either failed or were unsuccessful in starting operations?
The answer was that “the State commissioned a beef study that showed positive results for the location of this plant and available cattle. The study is available from GOED”. However I never received my requested copy.
3. Regarding businesses that have received money from the State through Future Fund Grants or REDI Fund Loans, how many are no longer doing business in the state? And, please provide a list of these businesses.
The answer was that “once a business has fulfilled its obligation to the State, either by repaying its loan or reaching the end date of its Future Fund agreement, GOED does not actively track each business. GOED does not have the resources to accomplish this on an ongoing basis. Furthermore, it is very difficult from a research standpoint to differentiate a company