In 2006, Aberdeen beef man Dennis Hellwig asked the Brown County Commission to help him build his Northern Beef Packers slaughterhouse. The commission delivered help in the form of a tax increment finance district. Under the TIF designation, Brown County forewent $8.6 million in increased property tax revenue from the packing plant, allowing Hellwig (and, as it turned out, the Korean investors who bought him out in 2009) use that money top pay down the construction costs over time.
Brown County Commission Chairwoman Deb Knecht led the 4-to-1 majority voting for the TIF in October 2006. Defending her vote, she told KELO, "If we turn everything down we'll never have that tax base... we will however in a few years...we have to be patient and wait for it and hopefully with the new building of homes and things like that we will see some money generated for the county."
When Brown County residents submitted petitions to put the TIF to a public vote, Chairwoman Knecht led the same majority in rejecting those petitions, wanting to keep the public from standing in the way of this tax giveaway on the grounds that approving the TIF was an unreferrable administrative decision. Judge Jon Flemmer reversed that undemocratic rejection in April 2007, saying the TIF was clearly a referrable legislative decision. The TIF went to a public vote that month and won 2-to-1 public support.
But the voters, like Deb Knecht and her fellow county commissioners, the Governor's Office of Economic Development, Joop Bollen, Mike Rounds, and 160 foreign EB-5 visa investors, erred. Northern Beef Packers took five and a half years longer than expected to build and open. NBP collapsed into bankruptcy in under nine months, unable to pay its TIF bonds or even the reduced taxes it owes under TIF designation.
Deb Knecht is no longer chairwoman of the Brown County Commission. But she is now chairwoman of the South Dakota Democratic Party, culminating many years of active participation in the SD Dems.
So just think: If Deb Knecht had smelled the offal, if she had not suffered from the same anything-for-a-buck desperation that induces too many of South Dakota's elected officials to sacrifice tax revenues for the sake of economic development, she could have used her clout (and yes, Democrats had clout in Brown County in 2006) to sway just one more vote to join her and Dennis Feickert in voting against corporate welfare for Northern Beef Packers. That no vote could have stopped the project, saved 160 Korean and Chinese investors $80 million dollars, and erased from this universe's timeline state and federal investigations of financial misconduct in the Governor's Office of Economic Development and South Dakota's EB-5 program that looms over the Senate campaign of the governor who pushed NBP, Marion Michael Rounds.
So the whole scandal really is the fault of the chairwoman of the South Dakota Democratic Party. Ah ha! I knew it had to be a Democratic plot!