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Kerry plans $10.8 million project with city help

By Staff | Feb 18, 2008

Just four months after a devastating fire at their manufacturing plant in Blue Earth, Kerry Group announced a $10.8 million rebuilding project that is part of an agreement with the City of Blue Earth.

The agreement between the city and Nuvex Ingredients, Inc. – a subsidiary of Kerry Holding Co. (the official name of the plant in Blue Earth) was officially adopted at a special city council meeting held on Monday night, Feb. 11.

In that agreement, both the city and Kerry (Nuvex) made several concessions involving the plan.

Kerry (Nuvex) said that they are proceeding with a $10.8 million rebuilding plan that will include expansion as well as rebuilding.

The project calls for a 48,000 sq. ft. warehouse which will be about 8,000 sq. ft. larger than the one destroyed in the fire. Cost of the warehouse was put at $2.7 million.

In addition, Kerry (Nuvex) will install a $6.3 million packaging equipment replacement and upgrade in the Blue Earth plant.

They will also be moving an extruder (cooking equipment) from another plant location to Blue Earth. That machine is valued at $1 million. They also are installing another new extruder at a cost of $800,000.

There are other concessions in the agreement that Kerry (Nuvex) agreed to. One is that the company will pay for half of a wastewater sampling station that has an estimated cost of $77,400. The city will be paying the other half of the cost.

Kerry (Nuvex) also agreed to not only keep all 200 employees on staff who were there at the time of the fire, but also will add eight more full time positions in the next two years.

That clause of the agreement is part of the city’s concession to start a JOBZ Zone for the company. That will provide an exemption of property taxes on the new warehouse expansion portion of the building through 2015. It also includes other tax breaks.

The city also agreed to forgive a financial obligation of approximately $143,000 related to an expansion that Kerry did in 1996 in which the city provided Tax Increment Financing incentives, some of which still were to be repaid.

Kerry (Nuvex) also made two other concessions.

One was to drop a property tax appeal from 2006 and 2007. The other one was to make a $5,000 donation to the Blue Earth Area School Foundation each year for seven years, for a total of $35,000 through 2015.

The Blue Earth Economic Development Authority had met the previous Friday and voted to recommend the city sign the agreement. City Administrator Ben Martig also said the staff recommended its passage.

The council agreed and passed it unanimously.

“This arrangement is very good for both sides,” Mayor Rob Hammond said. “It has a tremendous benefit to the community, to keep Kerry here.”

He commended Kerry for their efforts after the fire to keep the employees working and to rebuild and expand.

Adrian Feeney, Kerry Group Vice President Finance and Supply Chain, thanked Martig and Hammond and the city. “I am glad we were able to work this out,” he said. “We have a good working relationship with the city now and it will enable us to step forward.”