The Waseca City Council held a special meeting Monday to discuss a non-binding letter of intent from Conagra, the parent company of Birds Eye Foods, to build a new facility south of the former Quad Graphics building.
The council met in conjunction with the Waseca Economic Development Authority and unanimously approved signing a letter of intent. The letter includes a number of requests by Conagra in order to build a new 220,000-square foot facility on 47 acres to replace the current facility, which is set to close in 2021. The city authorized annexing 120 acres from St. Mary Township July 7. Conagra will use the remaining 73 acres as agricultural spray fields and will be classified for agricultural use for property taxes.
Birds Eye Foods employs 179 full-time workers and an additional 250 seasonal workers. The new plant will initially employ 119 full-time workers and 250 seasonal workers. Conagra anticipates adding new product lines which will help make up the loss of 60 full-time jobs.
The facility will operate as a fresh-pack vegetable processing plant. It’s believed the plant will process peas and corn. Construction is expected to begin in the fall and the plant will open in 2022. The site improvements, plant and equipment is budgeted at $200 million, according to an application for a Greater Minnesota Business Development Public Infrastructure grant through the Minnesota Department of Employment and Economic Development, the Waseca Economic Development Authority filed.
Conagra already contracts around 5,000 acres in Waseca County and the new plant is expected to continue to have a positive impact on farmers in the county.
The Waseca County Planning Commission on July 2 approved an amendment to city ordinance, and the county board approved it at its meeting Tuesday. Food processing plants connected to municipal water, sewer or waste treatment facility were not included among permitted uses in the general industrial district.
The city of Waseca released a letter of intent dated July 9 from Conagra Monday that outlines Conagra’s requests from the city and county. Chief among them is a tax abatement that would last between 15-20 years. The abatement could be between 50 to 65% of the expected property taxes with the city. The county accessor determined the property to have a value of $12.4 million and it’s anticipated that the county portion of the abatement would be 65 percent. The county would anticipate receiving around $100,000 in tax revenue and the city would receive around $200,000 annually.
The city would receive a larger share of the revenue, according to Waseca City Manager Lee Mattson. Conagra also asked the county for funding or future tax abatement for a water tower to serve the facility. Under an abatement, Conagra would pay the taxes but get between 50-65 percent of it back from the city and county.
Constructing a 16-inch water main remains a big hurdle for the city to clear in order for the project to take off. The city is expected to pay for the main but needs to secure funding for half of it. The city plans on seeking grants, but getting money from the state remains in question after a bonding bill failed to pass in the state legislature. The water main is essential to the project to provide the proper water pressure and flow rate, Mattson said.
The city applied for a Greater Minnesota Business Development Public Infrastructure grant through DEED to cover half the cost of the water main project, which is estimated at $1.2 million.
Conagra anticipates it will need to use between 120-150 million gallons or more of water each year and wants a new water tower built by 2026. The company’s said its willing to help secure federal and state funding through lobbying, though Mattson said the water tower is more of an aspirational goal for the company.
Conagra also included a request for a license agreement to use airport property and water service agreements. Conagra wants access to Airport Farm Field No. 5 to use to excavate soil for the proposed building site since the site is lower in elevation than the surrounding area. In addition to the airport site, Conagra wants access to a 20-acre property along 14th Avenue in Woodville Township to excavate soil.
Conagra requested a five-year lease of Airport Farm Field No. 5 to also use for irrigation and land application of vegetable processing wastewater. The five-year lease would be renewable for five-year periods with a total length of 30 years. License payments of $300 an acre annually or $9,900 a year, to the city would begin in November.
Conagra also proposes to transfer a 10.75-acre, a .75-acre lot and 5.1-acre site near the wastewater treatment facility to the city. The company will also decommission the 1947 lagoon near the wastewater treatment facility.
Conagra wants a right turn lane for the property onto eastbound Brown Avenue. The road would have to be restriped to include the turn lane, which the county would pay for.
It’s anticipated that the Conagra Board of Directors will decide on the project at its meeting next week. Should Conagra decide to move forward with the project, the city would hold a public hearing Aug. 18 on the proposed tax abatement.