City officially supports LS Beef

Jason Passmore, Howard County Business and Tourism Director, and Jess Stevens, president of Lime Springs Beef LLC, have been updating Lime Springs City Council members on progress of the business at their monthly meetings.

Jason Passmore, Howard County Business and Tourism Director, and Jess Stevens, president of Lime Springs Beef LLC, have been updating Lime Springs City Council members on progress of the business at their monthly meetings.

By Marcie Klomp

 

Lime Springs City Council has been very supportive of Lime Springs Beef LLC unofficially by working with President Jesse Stevens, Jason Passmore (Howard County Business and Tourism Director), DNR and other government agencies.

At the meeting on March 5, council made it official by promising $350,000 through TIF (Tax Increment Financing). The official support was to help fill out a CDBG (Community Development Block Grant) application.

Before council voted, Passmore explained that initially LS Beef wanted the $350,000 up front but agreed part up front and part in tax abatements was agreeable.

Those folks who give out the CDBG look at how much support the $7 million business is receiving. Passmore summarized:

• $500,000—Possible grant from State of Iowa (CDBG)

• $210-300,000—training from NICC (could be more, depending on number of jobs available)

• Assistance—DNR helped with sewer planning process

• RISE (Revitalize Iowa’s Sound Economy) grant—for infrastructure such as streets (City’s match approximately $200,000)

• $350,000—City of Lime Springs (possibly $200,000 up front and $150,000 in abatements

Total investment promised by City so far is $550,000. That may sound like a lot of money for a town that a few years ago was nearly in the red, but it is an investment in the future of the town. Also, the entire amount is not needed right away.

The money would come from TIF (Tax Increment Financing).

TIFs are tools to help city and county governments finance projects. Lime Springs did a TIF on the Travel Plaza when it was first built.

First of all, remember that the land where the Plaza sits was vacant and worth ‘X’ amount of dollars. The City received property taxes for the vacant land.

After it was built, the value of the property increased immensely, which means more taxes for the City. But those extra taxes do not go to the City, at least not yet.

A loan was needed for the water and sewer extensions, a costly endeavor. Those loan payments are paid back with property taxes coming into the City from the Travel Plaza.

In reality, the water and sewer did not cost the City anything as it was all paid with the larger property taxes paid by the business that wasn’t there 15 years ago.

When the TIF is due, the loan should be paid off and all those tax monies are then routed to the city, county, school etc. as all property taxes are.

(It is like purchasing a car when you get a pay raise. All the extra salary goes to pay for the car. When the car is paid in full, you get to keep all the money.)

The TIF for Lime Springs Beef is also connected to sewer and water expenses. Stevens found out only regular/domestic sewer and water could be discharged into the Lime Springs system, so he had to find a different, more expensive disposal for the meat processing part of the plant. It was an unexpected $950,000 bill.

The tax base for the new business will probably be at least $1.2 million. That is over $45,000 of new taxes coming into the city per year. “These new taxes going into the TIF will pay for the company investment and the new streets in approximately 15 years or less.

Passmore explained, “When you look at this type of project—50 jobs and over $1 million—it is a premier project. It is not often that a start-up comes in and drops anchor. Once in a while you get a chance to take a swing and hit a home run. That’s what this project is.”

Looking at all the other entities that have supported LS Beef, Councilman Corey Gates said, “We need to make a commitment, too.” All council voted aye to the $350,000 commitment.

Stevens added, “We’ve got some large potential investors we’re talking with . . . The interesting thing to me is how cooperative the state has been. They are keeping us on track, so we can break ground on May 1.”

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