City ponders fallout of tru Shrimp departure

City leaders have shared mixed responses to tru Shrimp’s Jan. 2 announcement that it will no longer build its planned $300 million production facility in Luverne.
Members of the Luverne Economic Development Authority gathered Monday morning at their first monthly board meeting of the year. It was also their first meeting since the tru Shrimp announcement, and they discussed key points that have surfaced in the days following the news.
Mayor Pat Baustian again expressed disappointment at tru Shrimp’s sudden move to South Dakota — citing a Minnesota regulatory hurdle — after years of working with state and local officials.
“We had meetings with them as late as December, and they never gave us any indication that they were considering South Dakota,” Baustian said.
“Don’t tell me this was all about an environmental regulation.”
He added that Sen. Bill Weber, Luverne, had worked tirelessly to secure Minnesota legislation for ag taxes and production tax credits for the company and was also disappointed.
The same was especially true for then-MPCA Commissioner John Linc Stine and his staff who had worked alongside tru Shrimp toward meeting each step of the environmental regulation.
The rule in question deals with “specific conductance” related to toxic levels of salt discharged in treated water from municipal wastewater treatment plants.
Linc Stine said his agency was prepared to help tru Shrimp and the city meet the state regulation, but tru Shrimp walked away before that could happen.
“Now it’s full steam ahead on addressing specific conductance in our state regulation,” Baustian said.
“We need to look a what we can do to fix it and make sure we’re set up for when tru Shrimp wants to put a second harbor in Luverne.”
 
Environmental protection or regulatory overreach?
On Wednesday this week Luverne City Administrator John Call, Sen. Weber and representatives from the Minnesota Pollution Control Agency and Minnesota DNR attended a legislative hearing in St. Paul.
Call said the point of the hearing was to consider the “specific conductance” regulation — whether or not it’s a necessary environmental safeguard or if it should be more flexible to reflect modern-day waste water treatment protocols.
“We’re hoping to look at whether it’s an outdated measure or if it’s a duplicate measure of salt in water,” Call said.
The city has retained the legal services of Flaherty and Hood to lobby for lighter regulation on Luverne’s behalf.
There was some discussion about the importance of protecting local water and soil, but LEDA board member Ryan DeBates said storm water runoff from salted streets and highways should also be a regulatory concern if toxic salt is the concern in commercial effluent.
Tru Shrimp will reportedly meet with Minnesota’s new MPCA commissioner __ Strom. The company was also planning to send staff to Wednesday’s hearing, moves that LEDA board member Sherri Thompson called promising.
“That tells me they’re still interested in Luverne,” she said. “It’s a good sign.”
Tru Shrimp officials have indicated they might be ready to build their second harbor in three years.
“We want to make sure we’re clear of regulatory challenges when they come back,” Baustian said.
He estimates that tru Shrimp walked away from roughly $40 million in Luverne and Minnesota incentives considering tax abatements, production tax credits and other offerings.
Meanwhile, Minnesota West Community and Technical College had developed new curriculum for aquaculture degrees in order to help meet anticipated labor shortages.
LEDA director Holly Sammons pointed out that no land had been conveyed to tru Shrimp and that the company will be responsible for repaying a $149,000 loan for moving an L&O power line on the edge of the property.
 
Positioned for future growth
Call said that Luverne’s infrastructure improvements, spurred partly by tru Shrimp’s production schedule, will only serve to make the city stronger for its residents and for future development.
For example, the $4 million electrical substation was already in the works to strengthen Luverne’s service for both future and existing customers.
The $10 million waste water treatment plant upgrades are necessary for any Luverne growth, but it was spurred by Premium Iowa Pork’s processing needs (in the former Gold’n Plump facility), and the company will pay for $6.7 million of those costs.
The 10-ton road (Koehn Avenue), water, sewer and electric to the industrial park have long been on Luverne’s capital improvement list.
Tru Shrimp put a deadline on that work and also qualified the city for a federal business and industrial grant that covered nearly half of the $2.6 million costs.
The same is true for the 54 apartment units planned for the former Sharkee’s lot in what will be the Towne Square development along Hatting Street and Highway 75.
Luverne already has a proven shortage of this type of housing — market rate rentals — and current growth and anticipated hiring is likely to feed demand for the available units. The city’s role in that project was to prepare the lot and secure a private developer that would build and own the apartments.
“We were going to do many of these things anyway,” Call said about the city’s recent investments. “Now we’ll be ready for any future growth.”
LEDA board member Mike Engesser said tru Shrimp’s decision to put its first harbor in South Dakota may not be so bad for Luverne.
 “This is an initial plant in a brand new industry,” he said. “Will there be issues? Sure there will.”
He noted that the company hasn’t yet done soil borings in the prospective Madison site, and there are many unknowns remaining about the viability of the project there.
Engesser also referenced Luverne’s current plans for growth.
“This might be a little blessing in disguise with everything else we have going on,” Engesser said.
The $31 million Luverne School building project will break ground this year, as will the $30 million PIP retrofit of the Gold’n Plump plant.
The $15 million National Guard Armory will break ground west of Papik Motors in 2020, in addition to several other major projects. “There’s still a lot going on,” Call said.
DeBates agreed.
“We need to hold our heads high,” he said about the change of plans for tru Shrimp. “This moves things out a few years and gives us time to accommodate growth.”