To Get More Tax Breaks, Agropur Claims 90-Foot Milk Silos Are Mobile

Not satisfied with the tax increment financing it got to incentivize a plant expansion that was already underway, Canadian cheese maker Agropur continues to try getting out of paying its fair share of taxes.

The November 8 minutes reflect none of this conversation, and the agenda certainly didn’t announce anything along this line, but this week’s edition of the Hamlin County Herald Enterprise reports that the Hamlin County Commission discussed and adjusted the new tax valuation of the expanded cheese plant:

The Hamlin County Commissioners debated the value of the silos at the Agropur Cheese Plant in Lake Norden and how to fairly assess them at their Nov. 8 meeting.

…The previous tax valuation was around $8 million for the old plant, but that hadn’t been updated since the early 2000’s. The new valuation came in around $46-$47 million [Jenna Aderhold, “County Debates Agropur Valuation,” Hamlin County Herals Enterprise, 2018.11.14].

The cheese plant opened in 2003, and only now with a production-tripling expansion does the county admit it’s time to update the assessment. Local farmers don’t get that kind of break. While Agropur has gotten to pay taxes on a fifteen-year-old valuation, farmers see their valuation updated every year, on the basis of production data averaged over the last eight years.

Note also that Agropur tells us it’s investing $250 million in expanding the Lake Norden plant. The assessment is only $47 million, tops. We may be getting contractor’s excise tax on the $200 million in construction overhead… but what would you like to bet the state refunds that to Agropur? Oh, never mind—Agropur already got that: $7,254,497 in sales and use tax refund issued August 8, 2017, through the Reinvestment Payment Program.

Given that refund (the second largest in the state in 2017) paid Agropur’s estimated $353,410 in property taxes on the project for 20.5 years, why quibble about the valuation and tax any further? But quibble good capitalists do:

The large storage silos that make up the Lake Norden skyline make up between $6-7 million of that new total appraisal.

Director of Equalization Chris Schafer said state statute requires them to assess at 85-100 percent of market value. The 29 milk storage silos retail for $400,000 each brand new. Schafer said they do have to take into consideration what they would resell for, which are [sic] around $100,000-$150,000.

…Agropur’s Tim Czmoqski said at a previous commissioners meeting he considered them mobile equipment and they shouldn’t be included in the assessment [Aderhold, 2018.11.14].

Mobile equipment? Those milk silos are up to 90 feet tall. I don’t see any wheels on them. If they start rolling down Dakota Street, let me know—I will drive down to take pictures.

The Herald Enterprise reports the commission settled on valuing the milk silos at $120,000 each, which multiplied by 29 gives us $3.48 million, about half of what this year’s updated valuation said they should be.