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County commissioners OK industrial development bonds for mega-dairy near Pennock

WILLMAR -- The Kandiyohi County Board of Commissioners took action Tuesday to be the "conduit" for $20 million in industrial development revenue bonds for Meadow Star Dairy LLC.

Developers intend to use the bonds to finance the construction, acquisition and installation of equipment to handle manure for the 9,590-head dairy operation that will be built near Pennock.

There will be no financial risk to the county by issuing the bonds, which still must be approved by the Minnesota Department of Employment and Economic Development.

James Stewart, an attorney with Arntson & Stewart from Fargo, N.D., said the county has "no liability" and that all principal and interest payments will be made by Meadow Star Dairy. Even if the dairy fails, said Stewart, there is no risk to county taxpayers.

He said the county is "acting solely as a conduit" for the low-interest bonds, which will likely be issued in phases as the project progresses.

Steve Renquist, executive director of the Kandiyohi County and City of Willmar Economic Development Commission, said the board's approval of a resolution supporting the bonds would serve as a recommendation to the state to approve the bonds. Renquist said the developers are not seeking any other financial inducement, such as tax increment financing, for the project.

During a public hearing on the bonds, Jeff Johnson, of New London, questioned if the dairy would provide jobs to local residents and what economic benefit the business would bring to the county.

If Meadow Star Dairy follows the model of other large dairies, Johnson said many employees, including those that live on-site, may be here working on an agricultural visa and will contribute little to the local economy.

Johnson said the commissioners could stipulate the dairy provide a living wage and that jobs be provided to current residents rather than employees who are "brought in from some other place." He asked if the county would approve bonds for some other businesses "that have an opportunity to make a dollar."

Renquist said some of the employees may indeed be working with agricultural visas, but bringing new immigrants to the area is an opportunity for the county to expand its population, who would spend money in the community.

Renquist said he considers anyone who lives and works in Kandiyohi County to be a resident and that the dairy will provide jobs for county residents. The dairy will also support ancillary businesses, such as truckers, veterinarians and farmers who grow grain for the cattle and will use manure for fertilizer.

Stewart said he's overseen "hundreds and hundreds" of successful bonds between local governments and businesses. This is the first time Kandiyohi County has participated in this type of arrangement.

There was a long, silent pause before a motion was made to approve the bonds.

Commissioner Harlan Madsen said he supported the bond process because the funds will be used for solid waste projects at the dairy, which he says will be "a plus" for the county's environment.

Once DEED gives its approval, the dairy expects to receive the first phase of funding in October, said Stewart.

Carolyn Lange

A reporter for more than 30 years, Carolyn Lange covers regional news with the West Central Tribune.

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