Sparks played city’s cards carefully after fire

Published 12:00 am Tuesday, July 9, 2002

For Albert Lea City Manager Paul Sparks, the real challenge started when firefighters finally got the Farmland blaze under control two days after it started. Tuesday, July 10, looking up at the smoldering debris on the site, Sparks found out the plant was going to be a total loss.

The embarrassment of seeing the second-largest employer in the town crushed on one hand, Sparks had another thought: &uot;This could be an opportunity.&uot;

The city had been dealing with the safety and sanitation concerns of the 90-year-old packing plant. &uot;The fire gave us an opportunity to get something new,&uot; he said.

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His moves were quick. They were target-oriented, aiming to remove the old plant and have a new plant built. Yet, the strategy did change with circumstances, similar to ones employed by a good poker player, a game he enjoys as a hobby.

“You cannot attack things when you have no influence on them,&uot; Sparks said about the principle he followed.

Three days after the fire broke out, Sparks started talking about the new plant with Farmland Foods President George Richter.

One of the cards the city had was a city parcel at the Habben Industrial Park near Interstate 35 that would be suitable for replacing the old site.

What Sparks concentrated on was settling a lawsuit with the property’s developer and assembling an incentive package for Farmland to move in.

The loss of the plant meant a lot to the city’s economy. A $14 million annual payroll and $50 million annual local spending including utility purchases were gone.

The city came up with offers consisting of a land swap between the old site and new one and a takeover of the $5 million cleanup project. Legislative support was required for exempting state sales taxes on the new plant construction and the designation of a tax-increment financing district; both were granted this year.

Though Farmland had the option to build the facility in other cities such as Denison, Iowa, and Monmouth, Ill., Sparks was confident with the plan that used the cleanup obligation as leverage.

A number of meetings were held with Richter and Farmland attorney Bob Sehuller. &uot;Farmland officials were very cooperative and easy to work with,&uot; Sparks recalled.

His visits to St. Paul to talk with state officials and attend legislative committees counted almost ten, which was unprecedented in his 32 years of career in public services.

When it turned out Farmland was stuck in negotiations with insurers over the fire damage assessment, Sparks moved to obtain a court order to enforce the demolition of the plant. The order would weaken the position of insurers who have been asserting that the plant can be restored, and move the negotiation forward in favor of Farmland. On the other hand, it also placed pressure on Farmland to make a decision to build the new plant, reminding them the city always has an option to enforce the demolition at Farmland’s cost.

But an unexpected announcement of bankruptcy on May 31 has placed the city’s meticulous efforts to urge Farmland to stay in Albert Lea in peril. The future of the Albert Lea plant now is in the hands of not only Farmland and insurance companies but also the bankruptcy court and creditors.

Though Sparks still has hope that the court would favor the new plant, regarding it essential for the company’s revitalization, he already took one step as a fail-safe to escrow 25 percent of the insurance proceeds, under state law, to pay for demolition if Farmland cannot.

The game is not done, but continues with a new, and probably more complex, equation.

Even if the chance for a new plant is dismissed, the city still needs to push for removing the old plant and redeveloping the site. &uot;What happens to that site is very important to the community,&uot; said Sparks. &uot;That building needs to be torn down, no matter what.&uot;