Commissioners reject ethanol plant’s request for tax abatement
October 13th, 2006
Sibley County Commissioners, Tuesday, rejected a request from Heartland Corn Products for a $135,000 tax abatement over five years. The expansion at Heartland Corn Products, shown above, will allow ethanol production to increase from 35 million gallons/year to 99 million gallons/year. Construction on the $70 million plant began last December. The new plant is expected to begin operations next month. 15 new jobs were created by the expansion.
Sibley County Commissioners, by a 3-0 vote, rejected a request by Heartland Corn Products for a $135,000 tax abatement over a five year period.
County Commissioners Lee Anderly, Leo Bauer, and Bill Pinske voted on the issue. Two commissioners, Harold Pettis and Charlie Woehler, abstained from voting because of conflict of interest. Pettis and Woehler are also shareholders of the plant.
It was proposed that the abatement would be used for Heartland Corn Products’ railroad siding, that was constructed partially on railroad property and partially on Heartland Corn Products’ property.
Ben Brown, general manager of Heartland Corn Products, said that it was Heartland’s understanding that it was not eligible for the JOBZ program and that the Regional Rail Authority would be able to upgrade the siding. “We would fund the upgrading to the siding and receive tax abatement from the city and county to compensate us for that,” he said. “It is a benefit to the community and the Regional Rail Authority.”
It is estimated that with the expansion, Heartland Corn Products will ship an estimated 6,500 cars of ethanol and dried distiller’s grain annually, which is estimated to provide the Regional Rail Authority an estimated $162,000 additional annual income.
“You can’t load cars on the main line, and you need that spur. It takes millions of dollars to totally improve the line,” Commissioner Charlie Woehler said. “This is a cheap investment for economic development.”
Woehler added that granting this abatement would be “an investment in a solid company.” He noted that the county has had several business loans through the revolving loan fund that have lost money.
Board chairman Bill Pinske said that his telephone “rang off the hook” since the article was published in the Gaylord Hub regarding the tax abatement request. All were opposed “because they get federal and state subsidies.”
The City of Winthrop granted Heartland Corn Products a $274,500 tax abatement. The original ethanol plant at Winthrop was in a tax increment financing district for seven years.
Tim Dolan, who has served as Sibley County’s Economic Development Director for two years, said that this is the best economic development opportunity here since he has served in this position.
“Usually when you construct, you get financing before you build,” Pinske said. He said that he realized that because JOBZ fell through, that Heartland decided to seek a tax abatement. “I am 100% behind the ethanol plant, but I don’t believe $27,000/year will make a great difference (whether or not the plant expands).
Brown said that he was “a little disappointed” that the Sibley County Commissioners didn’t approve that tax abatement. “Heartland will be a big part of making the railroad successful and I’m disappointed that Sibley County wasn’t more supportive.” He also noted that most of the rail line’s track is located in Sibley County.
