MERCER: In a rare instance, board rejects loan committee wanted
PIERRE — Seldom does this happen. But, earlier this month, it did.
The credit committee for the South Dakota Board of Economic Development recommended a loan be made to a company. Eight days later, the full board refused it.
The money would have come from state government's Revolving Economic Development Initiative Fund.
South Dakotans paid an extra penny of sales tax, temporarily, to create the REDI loan program in 1987.
Gov. George S. Mickelson proposed it during his first legislative session as South Dakota's chief executive.
The tax raised $40 million in less than one year. Target met, the tax came off.
The board made hundreds of low-interest loans to businesses in the 30 years since. Nearly all were repaid.
What happened this month was less than clear.
Traditionally, Board of Economic Development members were discouraged from talking publicly about decisions.
But a general outline came together from board minutes. Because they are from a public body's public meeting, the minutes are public records.
The credit committee met Dec. 4. Members present were Jeff Erickson, of Sioux Falls; Dale Clement, of Rapid City; Pat Prostrollo, of Madison; Don Kettering, of Yankton; and Reed Kessler, of Aberdeen.
The committee recommended approval.
The public packet for the full board meeting Dec. 12 listed motions that staff recommended.
For Win Build LLC, it said: "Motion to approve the waiver for a loan over $1,000,000 and approve the loan request from Win Build, LLC in the amount of $5,000,000."
The minutes told an opposite result: "A motion was made by John Calvin and seconded by Ted Hustead to deny the request from Win Build, LLC. Motion passed by a roll call vote."
Calvin lives at Watertown. He was the first commissioner of economic development for then-Gov. Mike Rounds in 2003. Hustead lives at Wall.
In the weeks since then, the reason remains publicly unknown why the board turned down Win Build's request for $5 million.
The company, based at Yankton, shares the same address as Marquardt Skyway Inc., a trucking company. Win Build also shares the address with Win Chill LLC.
Win Chill is constructing a plant on 54 acres at Foundation Park from Sioux Falls Development Corporation for storing and distributing refrigerated food.
Scott Stern, commissioner for the Governor's Office of Economic Development, announced Win Chill's plan May 5.
The GOED news release said the $5.7 million purchase of the property was "the largest dollar-volume sale of land for industrial use in Sioux Falls history, according to Slater Barr, president of the Development Foundation."
When I emailed Erickson, who is board chairman, to ask about the loan denial, Erickson referred me to Stern.
When I talked with Stern on the telephone Wednesday, Stern said he was limited on what he could publicly say.
"In this situation, they (the board members) voted to deny the loan," Stern said.
He added the decision was "based on all of the information" available.
"It's a good project," Stern said.