Local governments use tax increment financing to jump start projects that market forces alone won’t support. The idea behind a TIF district is that, without providing tax dollars to cover the cost of building the public infrastructure associated with the project, the project would not happen.
Canadian milk corporation Agropur is asking Hamlin County for tax increment financing to support an expansion of its cheese plant in Lake Norden. Yet, even without the TIF designation, Agropur appears to have already begun its expansion:
The City of Lake Norden—whose slogan is “Cheese Is Our Whey“—approved on November 17 a whole whack of variance requests to accommodate the expansion on the south side of their town—eight-foot-high fence instead of seven-foot; 54-foot-high warehouse, 90-foot-high silos, and 110-foot-high whey evaporator and dryer building instead of the usual 45-foot limit; 5.5-foot setback for its raw milk silos and 2.25-foot setback for its construction truck scale instead of 50-foot setbacks. On December 4, the city also extended Agropur’s building permits from one year to two.
The Hamlin County Commission got information about the TIF request at its December 5 meeting from Toby Morris of Dougherty and Company in Pierre, which is designing the TIF for Agropur. The commission met Tuesday to discuss the TIF further; according to a report by Jenna Aderhold in the December 13 Hamlin County Herald Enterprise, the TIF proposal goes to the Hamlin County Board of Adjustment next month, then back to the full county commission for final approval.
Governor Dennis Daugaard is asking the 2018 Legislature to review the use of tax increment financing. The Legislature’s Executive Board has already received a draft report from the Legislative Research Council on apparent misuse of TIF districts in Madison and Rapid City.
The Hamlin County Commission should take a look at the construction already underway at the Agropur site in Lake Norden and ask if they aren’t cruising toward giving Governor Daugaard example of bad tax increment financing.
Related Reading: The Department of Revenue posted a guide to tax increment financing in September. The department says it will post its first annual TIF district report, listing all TIF districts in the state, on Open.SD.gov by January 1.