Spring Valley EDA responds
to loss of Rochester Cheese jobs
Tuesday, February 18, 2014 2:35 AM
After receiving a letter from the Department of Employment and Economic Development (DEED) in regards to Rochester Cheese seeking assistance to relocate to Rochester from Spring Valley, the Spring Valley EDA responded with a letter opposing the action.
The letter explains that DEED has received an application from the city of Rochester seeking assistance from the state for the relocation and expansion of Rochester Cheese. An official from DEED stated that it wants to ensure that the Minnesota Investment Fund is not used to strengthen one community at the expense of another and asked for comments before reviewing the application.
The company has been operating in Spring Valley since 1976 and became a manufacturing plant for Swiss Valley Farms since it purchased the plant in 1985.
In October of 2012, the company announced expansion plans for relocating to a Rochester location. The plans included moving the production for the company's club and pasteurized process cheeses previously handled at the Spring Valley location.
The Spring Valley plant would then become a warehousing and contingency production site with just one or two employees.
According to a statement from the company, all employees at the Spring Valley location were offered positions at the new Rochester location. The Spring Valley plant has employed up to 40 people.
At the time of the announcement, Jeff Saforek, vice president and general manager of Swiss Valley Farms' dairy ingredients division, said " the move was based on growth of the business and an increased need for production capabilities."
Both the city of Spring Valley and the EDA have sent letters addressing their concerns to DEED.
EDA President Dave Phillips, in a letter from the EDA, pointed out when the city first became aware of the company's potential move to Rochester, Rochester Cheese indicated it would not consider moving due to the cost. At that time, the city of Spring Valley offered to move the company to a new facility within city limits, using a combination of free land in the new industrial park and tax increment financing.
The company was also offered help to attempt to seek FEMA funding due the location of the current site residing in a floodplain. The hope was to keep the business in Spring Valley, but those offers were turned down by the company.
Using research from economic development director Cathy Enerson, the letter pointed out that losing 40 jobs in Spring Valley would be the equivalent of losing 1,700 jobs in Rochester if measured comparatively based on population of each city.
The letter also outlined potential negative effects, such as home sales caused by workers moving away, commuting costs for workers who stay and the loss of work for businesses that service the company.
Steve Tart, owner of Racks Bar and Grill, approached the EDA to discuss a possible loan through the revolving loan fund.
Tart is requesting $45,000 to help cover the costs of previous repairs made after purchasing the property and the future construction of a patio on the west side of the business which they would like begin in April.
The group will review the information provided and may hold a special meeting prior to March, as some of the proposed work is timely.
EDA member Steve Himle explained this application "has more moving parts than most" so they would like to wait until all EDA members were present to make a decision. Jeff Vehrenkamp and Kim Brown missed the meeting as did Enerson.
Cooperative advertisements between the EDA and Spring Valley Chamber of Commerce in two local visitors guides were approved with Phillips abstaining.
The EDA will be requesting Public Utilities to continue its participation in the Newly Constructed Housing Incentive program. This program offers $1,500 for families or individuals purchasing or building new single-family homes within the city limits. For more information on the program check the website at http://www.springvalleyeda.org/Housing.html.
Economic development consultant Michelle Vrieze updated the group on the Small Cities Block Grants.
She reported 14 commercial properties and seven rentals, 10 units total, have applied for the grants.
The goal was 15 commercial and 14 rentals, so this leaves one position available for a commercial property and up to four more rentals.
"There will be a lot of work being done this summer," Vrieze said of the success of the program.
The next regular EDA meeting will be held on March 12 at 8:30 a.m.