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Another big grain project for Kimball?

KIMBALL -- Rapid City-based Dakota Mill & Grain Inc. plans to purchase 142 acres from the town of Kimball, causing some to speculate the company will construct a large grain-loading facility.

It would be the second such facility built near Kimball, a town of 703 residents located 20 miles east of the Missouri River on Interstate 90. Liberty Grain was constructed by other entrepreneurs east of Kimball last year at a cost of more than $30 million.

In April 2011, Kimball's city council passed a resolution authorizing the potential sale of its grass-strip airport for $852,000 to Dakota Mill & Grain. The company, at the time, was pursuing the construction of a $25 million railroad grain-loading facility. Dakota Mill & Grain officials have not returned recent phone calls from The Daily Republic.

Maynard Konechne, of Kimball and president of the Lake Francis Case Development Corp., said the purchase agreement between the town of Kimball and Dakota Mill & Grain states the land will be used for a grain-shuttling facility.

The purchase will be facilitated by the development corporation, said Sue Steele, Kimball city attorney. She said a municipality can sell or lease land to a nonprofit local industrial corporation for industrial development.

"This transaction is structured as an option ... for the city of Kimball to sell the land or to provide an option for Lake Francis Case for industrial development purposes only," Steele said. "Then Lake Francis Case entered into an option with Dakota Mill & Grain."

Dakota Mill & Grain had until this month to decide whether the company would purchase the land.

"We received a certified letter from Dakota Mill & Grain stating they plan to exercise their option to purchase the airport property from the city," said Kimball Mayor Wayne Tupper on Wednesday.

The airport is technically within Kimball city limits but is situated northwest of the town.

Dakota Mill & Grain received approval for a $2.4 million loan from the South Dakota State Railroad Board on March 28, 2012, for track construction. The company plans to request a one-year extension during the rail board's March meeting, said Bruce Lindholm, the program officer for air, rail and transit at the South Dakota Department of Transportation.

Dakota Mill & Grain would need to construct a track to the nearby state-owned railroad, which was refurbished in 2012.

Dakota Mill & Grain has also reportedly purchased or plans to purchase 40 acres adjacent to the airport owned by Douglas Svoboda, a Pierre resident.

Both Tupper and Konechne said they assume the reason Kimball is such a popular area for the grain-shuttling facilities is due to the rehabilitation of the state-owned railroad line from Mitchell to Chamberlain.

About six miles east of Kimball, the Liberty Grain grain-shuttling facility opened for business in late 2012.

"Dakota Mill & Grain said they have no problem with another facility being that close," Konechne said. "They didn't have a problem with that."

Other factors behind the construction of the grain facilities include high commodity prices and rising demand in developing parts of China, experts have said. Liberty Grain officials have said much of their grain will be transported by rail to the West Coast and exported from there.

The Dakota Mill & Grain land purchase causes at least two other issues for the town of Kimball -- the loss of the airport and the potential of heavy truck traffic going through town.

Tupper said the city doesn't currently have plans to replace its airport, but will discuss it in the future.

As for heavy truck traffic traveling through town, Tupper said he isn't sure what the town might do about it.

"We'll cross that bridge when the time comes," he said.