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Economic Development: What’s Good? What’s Bad?

by Ken Root

The north-central Iowa town of Mason City sits far enough away from Des Moines and Minneapolis to create its own gravity.  It is the hub for business and culture in the region and has a long history of both.  Music Man Square is a tribute to the work of Meredith Willson, who lived here as a boy.  He wrote the stage play: “Music Man” that was performed on Broadway and is still a standard in high schools and colleges across the country.  Kraft makes packaged foods in Mason City, Cargill processes eggs and Smithfield slices meats.  The largest employer is North Iowa Mercy Health Center.   Two weeks ago, the town rose up, in masse, and pressured the city council to reject a four hundred million dollar pork packing plant proposed by Prestage Farms of North Carolina.  The council vote was 3-3 with one abstaining.  A tie is a “No” vote so the proposal failed.

Examining this effort to bring a very large packing facility, eventually offering two thousand jobs, to a region that desperately wants new industry is both a social and economic dilemma.  In the current age, an immigrant laden, dirty industry cannot be forced on people who want to be more selective in whom they welcome to their town.

From a pure economic sense, Mason City was an ideal place to build a hog slaughter facility.  Iowa produces twenty million pigs per year.  It also plants almost every acre to corn or soybeans and has plentiful water, good roads and intersecting rail lines.  The town is a single track hub for the UP/SP and the IANR.  Interstate 35 sits only a few miles away.  If you were to draw a one-hundred mile circle around the town, there would be more market ready hogs than the plant could handle on a daily basis.

The logistics were not the issue for the estimated two-thirds of city residents who opposed it.  They put forth examples of other towns that had welcomed a large packing facility and the negative quality of life issues for both the existing townspeople and the employees who moved there.  In the course of a seven-hour city council meeting, that lasted until 2 am the following morning, over sixty people spoke and most were against the facility.  They cited the strain on city infrastructure, from water and sewer to educational facilities for children.  They cited odor and pollution from the plant and the difficulty in suing for damages, if harmed.

One resident of Mason City conducted a blind survey that had received just under one thousand responses.  She presented her findings which showed almost seven hundred were opposed and listed their complaints against the proposed packing facility.  Many said they were not opposed to economic development but they didn’t want to become a “packing plant” town because that stigma would prevent other businesses from coming there.  She concluded with: “We can do better.  We just have to be patient and keep our long term goals in place.”

I think of the proposals put before towns and landowners in the past that had side effects not anticipated at the time.  Damage from oil drilling and pollution from discharge or other spills have ruined many acres across the plains.  Truck traffic in excess of the capability of roads and bridges.  Schools overwhelmed with children who do not speak English.  In this case Prestage farms offered one point four million dollars to help the schools cope with the influx but the amount, spread over ten years, was used as an example of how minimal the company will be in taking care of a problem it has caused.

Individuals and towns often feel compelled to take the deal from the company that wishes to mine their resources or bring them an opportunity to keep the community alive.  Those are good things but awareness of bad outcomes from “knee jerk” reactions are legendary.  Most towns in rural America would favor high tech industries but the approval declines as an industry is likely to smell, pollute and hire low wage employees.

A Mason City man, testifying at the city council meeting, outlined the wages to be paid at the proposed packing plant and determined it to be low enough families would likely seek public assistance to live at the poverty level.  “I don’t mind subsidizing people but I hate subsidizing companies,” he said.

On the other hand, I look at Garden City, Kansas as a town that embraced the fortunes brought by being a packing plant town.  The ethnic progression of workers through the years and the investment in industrial activity serves the locals as well as Americans from coast to coast.  The challenge is to have quality of life within the region where you work and send your children to school.   It comes down to all of us wanting the products from a dirty industry but we don’t want it located in our back yards.

I think it was a healthy exercise, for Prestage Farms and Mason City, even though the packing facility is now re-examining its options and knows the next town may be less attractive to their needs and more empowered to be resistant to the venture.  With the need to utilize existing infrastructure and expecting millions of dollars in tax breaks, how can it find a town which will swap their peaceful backwater status for the benefits of hundreds of millions of dollars of investment?

It is clear the modern age of awareness has produced citizens who are much more “empowered” and are actively holding their local governments accountable for their decisions.