Albert Lea has been chosen at last.

Nine months after a fire that took around 500 jobs away from the community, Farmland Industries has decided to build a new meat processing plant in the city. A new plant will be built in the industrial park near Interstate 35, creating jobs for more than 700 workers. The construction is expected to take 16 months.

George Richter, Farmland Industries executive vice president and Refrigerated Foods division president, said if insurance settlements and economic incentives can be resolved, Farmland will break ground on a new

350,000-square-foot facility this spring, with operations expected to begin

in fall 2003.

According to the term sheet presented by Farmland to the city, the new

plant will cost $86 million to build. It is expected to produce 200 million

pounds of ham and packaged pork products per year.

The plant will create 720 new jobs: 600 for hourly production, 70 for

management and clerical and 50 for maintenance. The base wages are expected

to be $10.55 per hour for hourly production and $14.55 for management and

clerical. The total annual payroll will be $25 million.

The Kansas City-based corporation appeared to be preparing to build in

Albert Lea, going as far as preparing initial drawings of the plant and

having them approved by a city committee. Today, however, marked the first

official announcement of its intentions this morning.

&uot;The community has been showing strong positive feelings to us. Nine

months has passed since the fire and we felt it is very important to reach

the decision,&uot; said Bill Fielding, President of Farmland Refrigerated Group.

Fielding emphasized that the insurance negotiation still remains a key

factor in starting the construction of $86 million new plant.

&uot;Insurance firms are trying to delay or reduce the proceeds amount,

which is not responsible for the people who are out of work. We decided to

announce our decision, because we wanted to be very clear about our

committment to the community.&uot;

The plant will generate significant revenue for the city and local

utilities. The city will receive an estimated $150,000 by providing 150

million gallons of water and $500,000 for wastewater treatment every year.

The plant will also consume 21 million kilowatt hours of electricity

annually, generating $1.3 million, and it will spend $600,000 for 108,000

mmbtu of natural gas.

The corporation’s design team will visit Albert Lea shortly and draw up

final blueprints of the new factory. The city explains the new facility will

be a state-of-the-art factory where all the production lines are

accommodated on the same floor. It is expected that the construction will

take about a year using panelized construction.

The selection apparently reflects the city’s efforts to assemble a

land-swap package.

Richter said the decision on whether to rebuild in Albert Lea is a

complex one that involves many parties. He said that the company will break

ground and get employees back to work as soon as possible.

The proposal, approved by the city council on Oct. 8 last year, offered

a 32-acre parcel of land in the industrial park, worth $800,000 to $900,000,

to Farmland at the cost of $1. In exchange the city will acquire the 40-acre

old site near downtown, and take over the demolition project for the

burned-down facility. If the legislature approves the proposal, a

tax-increment financing district on the new site will pay for the cleanup

costs with tax revenue generated by the new plant.

Economic incentives from the city and state are also essential to a

groundbreaking, Richter said.

&uot;Building a new plant, in Albert Lea or elsewhere, has to make economic

sense for our farmer-owners. At this time, we are continuing talks with

local, state and federal officials on tax increment financing for the new

site, sales tax abatement, extension of unemployment benefits to our

workers, and school aid to help ensure Albert Lea schools are not adversely

affected by the students lost when families left the area for other jobs,&uot;

Richter said in a statement.

The new plant still hinges on an insurance settlement. Eight insurance

companies are negotiating with Farmland about the damage inflicted by the

fire. While Farmland has been claiming a total loss of $86 million, the

insurers believe that the old plant can be restored for around $25 million.

Farmland Industries Communication Director Sherlyn Manson said the time

when construction will start still depends on insurance negotiations. She

mentioned it also depends on the course of incentive packages currently

being discussed in the state legislature.