By Sara Quam
Exsito has indeed left town - and probably the grocery shelves - for good.
This, after months of rumors, was discussed by the Economic Development Authority Tuesday.
Frank and Ruthann Patterson, owners of the tomato-based food processing business, were actually current with city payments up to a few months ago.
The city didn't try to recoup the late payments until December to give Exsito a chance to come through with what it owed.
The Pattersons, who now live in Rock Rapids, Iowa, under an unlisted number, owe about $50,000 to the city from a loan and guarantee to a local lender. A Chapter 13 bankruptcy was recently filed only in Ruthann's name.
The money owed to the city does not count the building, land and updates worth $215,000 the city completed in order for the Pattersons to operate there.
On a brighter note, the West Hatting Street building has a potential new occupant, according to LEDA director Tony Chladek.
After payments to the city stopped, staff investigated some of the company's claims and found that it hadn't been fully incorporated as was indicated.
"They had a very good product, but they just didn't cooperate," Keith Erickson, LEDA member said.
The city's relationship with the Pattersons started more than a year and a half ago.
The city often hears from businesses wanting to relocate or start in towns such as Luverne. Through some of these business-recruiting conferences, Luverne made a deal with Exsito that was actually less costly than many of the other options.
Part of Exsito's original contract called for it to create five jobs within two years that pay not less than $9 per hour with health insurance benefits. That, according to Ruthann, wasn't going to be a problem.
She told the Star Herald in September 1999 that she had agreements from Sam's Club and Super Valu to distribute the product. Ruthann even had intentions to expand the tomato products to include fresh-squeezed lemonade.
The ReiTech relocation
On another business recruiting venture, Chladek said he doesn't expect ReiTech to locate in Luverne. Despite Luverne's generous offer, South Dakota still has some benefits Luverne can't match.
ReiTech Corporation is a manufacturer and marketer of a safety device called Easy Off Power Control. It is installed on heavy equipment used in educational, industrial, food and home workshop settings.
The shut-off mechanism is designed to reduce machine accidents. The product is retrofitted to equipment like table saws. The fitting puts a large stop button at knee level which allows the operator to push the button with his knee while keeping hands free for work.
Chladek said he expects ReiTech to locate in Brookings, S.D., but that hasn't been confirmed to him.
The LEDA said this development should only spur citizens to support border legislation, which would help businesses, through tax incentives, that would otherwise locate in South Dakota.
City Administrator Matt Hylen believes ReiTech would already be operating out of Luverne if border city legislation was in place.