Board of Supervisors discusses status of Agristar delinquent property tax case

by Bob Beach

During its regular meeting Monday, May 13 the Allamakee County Board of Supervisors discussed its meeting that took place last Wednesday, May 8 at the offices of Shuttleworth and Ingersoll in Cedar Rapids for mediation regarding delinquent property taxes at the Agristar meat packing facility in Postville.
Chairman Larry Schellhammer said that Agristar attorneys claimed that Allamakee County is “not being fair” in holding Agristar responsible for property taxes owed by the previous owners of the facility, though the courts have already ruled that the County is, in fact, owed the taxes. Schellhammer said that the Board rejected Agristar’s initial offer of $100,000 to settle the matter because the County is currently owed approximately $1,007,000, including nearly $600,000 in unpaid taxes plus interest, penalties and fees.
Schellhammer reported that Agristar responded to the County’s counteroffer of $907,000  by threatening to walk away from negotiations if the County did not set the principle amount of taxes owed as a starting point for a settlement. Schellhammer also said that Agristar requested a lowering of the assessed value of the facility with appropriate credits to reflect the adjusted value and insisted that the County support a $600,000 state economic development grant for which Agristar has applied for equipment and upgrades at the facility.
Schellhammer added that he does not believe it is a coincidence that the economic development grant is for almost exactly the same amount as the County is owed for unpaid property taxes, noting that Agristar indicated it would not be able to pay the County until the grant is approved and paid.
Supervisor Sherry Strub said that the County hopes to avoid further legal proceedings, as Agristar will likely appeal any court ruling, which would result in further legal fees for the County, already estimated at over $140,000.
Schellhammer said that the County’s final “drop dead” offer to settle for just over $600,000 amounts to the County giving Agristar a three-year, interest-free loan of over half a million dollars for three years, but would avoid further legal fees if Agristar accepts it. Agristar was given until May 24 to respond to the offer, which includes consideration of the economic development grant and a slight reduction in the assessed value of the property but no credits resulting from that reduction. Also included in the settlement offer is a payment deadline of May 31.

The Board also met with the Makee Manor Board to discuss an agreement transferring custody and control of the facility to the County. Chairman Schellhammer said that the purpose of the agreement is to simplify maintenance at the facility, emphasizing that it is not the County’s intention to “rush out there, lock the doors and start counting things” and that Makee Manor employees would still have access to the building.
Makee Manor Director Jan Ellingson said that there are records at the facility that must be kept for seven years and requested that an agreement be drafted to provide storage space for those records. Ellingson also said that she and two employees would need continuing access to the facility in order to complete audits and cost reports.
The Board agreed to table consideration of the agreement to transfer custody of the facility until next week, at which time it would also consider rental agreements for records storage and office space for Ellingson and her remaining employees.
In other business, the Board conducted a public hearing regarding the amendment of the County’s budget for fiscal year 2013. Hearing no public comments, the Board approved the amended budget and appropriations.