Ben Delman is a GOVERNING contributor.
Twitter: @governing
In his 1984 Presidential campaign, candidate Walter Mondale asked: "Where's the beef?" A failed investment into beef processing in Mississippi has local politicians asking the same question--an expensive query since the plant failure is costing the state $55 million dollars on a defaulted loan.
The loan, which the Mississippi legislature guaranteed in 2003, was to help Richard Hall, the owner of Mississippi Beef Processors, build a plant in economically disadvantaged Yalobusha County. After three months of operation--and the hiring of 400 workers--the plant closed in late 2004. The demise of the plant and other events surrounding the deal have prompted an FBI investigation.
Meanwhile, a report by State Auditor Phil Bryant found answers for the failure close to home. He chided the legislature for its lack of research in choosing the packing industry as a source of economic development. The report noted the high level of volatility in the beef market and the difficulty of starting a processing plant.
"Rushing to please every company is something we have to be careful of," Bryant says. "In our haste, we did some things we would have never done otherwise. We ignored basic business and industry principles."
Mississippi is still trying to sell the plant to another processor but it does not have any prospective buyers at the moment. Even at $12 million, less than a quarter of what the state owes on the loan, it has been unable make a deal. To get itself out of the mess, the state will use part of its $100 million settlement with MCI-WorldCom--the company was found guilty of failing to pay income tax--to work off the beef-plant debt.
Twitter
Facebook
LinkedIn
YouTube
Flickr
RSS
© 2011 e.Republic, Inc. All Rights reserved. |