A recent agricultural group investment in three Dakota towns will have a total economic impact of $170 million, thanks to the availability of a Dakotas America LLC, New Markets Tax Credit (NMTC) allocation.

South Dakota Wheat Growers is using $17 million in NMTC-enhanced financing to facilitate the construction, upgrade and modernization of three projects located in Berlin and Oakes, North Dakota and McLaughlin, South Dakota. Two of the three projects are located in NMTC-qualified low-income communities. In Berlin, the 2000 poverty rate is higher than the statewide rate, and the community is experiencing out migration. In McLaughlin, the poverty level in the area is 38%, nearly three times the statewide poverty rate.

The project includes $4.2 million to acquire the Berlin Farmers cooperative and provide $3.5 million in upgrade and modernization activities including a new 7,000 bushel/hour grain dryer to replace a 500 bushel/hour dryer, two 48 foot by 85 foot grain bins and related equipment, and a new receiving truck dump and driveway enclosure. In Oakes, $5.4 million will build a new 19,000-ton fertilizer plant, a 20,000 square foot seed and chemical warehouse, a truck scale and an upgraded road system to and from the plant. In McLaughlin, $4.5 million in NMTC-enhanced financing will construct a new 20,000-ton dry fertilizer plant and distribution hub.

The economic impact of these projects is profound, especially in these areas experiencing high poverty rates and diminished economic opportunity. The project will generate $1.3 million in local taxes. Nearly 550 jobs will be created, supported or expanded as a result of this NMTC-supported project. Area farmers will see benefits of $1.3 million, thanks to the SD Wheat Growers Cooperative.

During construction and at stabilized operations, these projects create economic output through payroll, sales revenue and patronage payment distributions to farmer members. The three sites are expected to stimulate $170.7 million in economic output within the economic region, with an expected annual growth of approximately 5% to 7%.

Under the NMTC program, projects must meet community impact criteria and be located on a distressed census tract. The project must evidence feasibility and have identified a majority of the financing. A NMTC investment will enhance the terms of the deal. The minimum project size is $5 million.

To learn more about Dakotas America LLC or the New Markets Tax Credit program, phone 605-978-2804, e-mail investment@dakotasamerica.com or log on to www.dakotasamerica.com.

An exciting part of this project is that written into the agreements was a benevolent component providing for no less than one-half of one percent of the allocation amount, or $80,000, shall be donated to benevolent, charitable or mission based organizations that serve the needs of the low-income communities in which the investments were made. As the completion of construction on the project nears, executives at SDWGA are beginning to explore options to put these funds to good use in the two project communities of Berlin, ND and McLaughlin, SD.

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