TIF plan for $500M soybean plant approved by planning and zoning committee; five of seven recuse themselves
With five of seven members absenting themselves due to financial interest in the project, a makeshift Davison County Planning and Zoning Committee voted 7-0 to approve the TIF district plan.
MITCHELL — A makeshift Davison County Planning and Zoning Committee voted 7-0 on Tuesday, April 4 to approve a proposal for a Tax Increment Financing district (TIF) to help fund a $500 million soybean processing plant. The decision sets up an upcoming county commission hearing that will decide the fate of the plan.
Notably, five of seven committee members recused themselves during the vote, citing personal financial interests in the plant. Members who recused themselves were Chris Nebelsick, Lewis Bainbridge, David Anderson, Bruce Haines and Ray Gosmire.
Filling in were Josh Klumb, Jerry Buchholz, Paul Kiepke, Tona Rozum, and Doug Molumby. The group was chosen by Davison County Planning and Zoning Administrator Jeff Bathke.
The TIF district, requested by High Plains Processing, is designed to help subsidize the soybean plant the company intends to build just off Highway 37, south of Mitchell, using the money generated by property value increases and subsequent property tax revenue over a maximum 20-year period to help pay for a portion of the project.
The Davison County Commission voted unanimously in July to grant a conditional use permit to the South Dakota Soybean Processors (SDSP), which will own and operate the High Plains Processing plant in Mitchell . That approval allowed SDSP to keep working to fund raise and put down equipment deposits, with a planned ground-breaking this year and the plant’s scheduled opening in 2025. The TIF advanced Tuesday was for up to $21.2 million to help cover roadwork, infrastructure and parking.
The plant, according to information from previous meetings, will be able to process soybeans or high oilseeds but not at the same time, with the expectation of processing 35 million bushels of soybeans annually, along with 850,000 tons of sunflowers, which will each be crushed for meal and extracted for oil. The cost of the plant — including the land, equipment, construction and materials — is expected to be near $500 million.
Concerns brought up during Tuesday's meeting included questions based around economic impact raised by both members of the audience and the makeshift committee. High Plains Processing representatives were present over zoom to field concerns.
“Is there some way of quantifying the economic benefits with some number or estimate?” asked temporary Planning and Zoning member Tona Rozum. “Just a rough dollar amount?”
Kyle Peters, a consultant for SDSP, via Zoom, admitted that an economic impact estimate does not exist, but could be procured through the governor’s office. Peters also noted the limitations of such calculations depend upon making projections into the future.
Questions about wear and tear increases on Highway 37 were also brought up by multiple people. Similar concerns in previous meetings led to a study on traffic impact commissioned by SDSP, to be released in the coming weeks.
Buchholz, another temporary committee member, offered a potential solution, noting that his township engages in “haul agreements” with truck drivers, contracts that would hold drivers liable for any road damage caused by their vehicles. However, numerous voices in the room from both the audience and other committee personnel brought up problems with the plan, noting Highway 37’s state service means a trucking flow too wide in scope to make individual contract agreements viable.
Steve Thiesse, an elected member of the committee said the effects of traffic upticks are exaggerated. “People hear a number like 100, 200 cars and they think, ‘Woah,’' he said after the meeting had adjourned. "But they don’t see it in the context of the total traffic that goes through the road.”
The traffic study is projected to find an increase of 140-450 daily trucks, the figure changing around harvest season. However, Bathke argued, daily total estimates of 5,000 cars on the two-lane highway mean that if study estimates are accurate, the plant would only mean a minor increase to wear and tear costs.
Instead, Bathke says that the plan will mean many positive things for the economic future of Davison County. Aside from the property value increases that come with more property tax revenue, Bathke says the plant will benefit business owners, farmers, and the school system, among other groups.
"Even if only 50 of the 75 jobs are worked by people from new people, that's still 50 families moving to Mitchell. That means more people buying clothes, houses, groceries, etc."
The plan will also lead to decreased to market transport costs for farmers, leading to increased profits. Finally, Bathke also noted that the state gives each school district $6,600 for each new student, a number that is projected to rise to $7,100 next year.
"The project is huge," he said.
The next step of the process will be when the Davison County Commission hears the proposal to decide its fate. The County Commission hearing is open to the public, and Bathke urges all potential attendees to submit their questions to him in advance for well researched answers.
He can be reached at email@example.com, or at (605) 995-8615.