State blocked last EB-5 loan for Northern Beef
By Bob Mercer
PIERRE — State officials refused to allow another round of EB-5 immigrant investor loans for Northern Beef Packers last spring, just as the Aberdeen processing plant faced financial collapse.
The rejection came in a series of telephone calls on or about May 21 rather than a letter, governor’s spokesman Tony Venhuizen said Wednesday.
On one end was Joop Bollen, of Aberdeen. Bollen was president for South Dakota Regional Center, the company he had formed to administer EB-5 loan projects in South Dakota as a contractor for state government.
On the other end were Pat Costello, the governor’s commissioner for economic development, and his deputy, Nathan Lukkes.
Two months later, Northern Beef shut down.
Under his contract, Bollen needed Costello’s approval for a new EB-5 loan fund called NBP IV.
Technically, it was for a company called Dakota Farm Raised High Quality Beef Limited Partnership that was incorporated May 14 by Karl Wagner, of Aberdeen.
Two other EB-5 loan funds totaling $60 million previously had been arranged by Bollen for the Northern Beef project.
After years of construction delays and financial strain, the processing plant opened in mid-October of 2012. But 108 production workers were laid off in mid-April of this year.
In late July, the company filed for bankruptcy protection and laid off its remaining 260 production workers.
The company had $25 million in state government loans waiting since 2010 but never met the conditions to receive the money.
After the April layoffs, the plant continued to operate while more money was sought, such as through another round of EB-5 loans.
Under EB-5, a foreign investor can make a $500,000 to a project in a rural area. If various criteria such as jobs are met, the investor and family can receive a permanent visa to live anywhere in the United States.
Bollen looked to the Governor’s Office of Economic Development for help.
“GOED did not approve the request because there were significant concerns about the viability of the project and additional project details were needed,” Venhuizen said.