Rapid City's billion-dollar beef plant deal may be falling through as company eyes other states

Dominik Dausch
Farm Forum
An overhead perspective of the Black Hills Industrial Center, an industrial zone being developed by Dream Design International. Western Legacy Development Corporation was working with the developers to build a $1.1 billion meatpacking plant in the district, but those plans have started to fall through after communications ceased between the two companies.

From cattlemen to council members, South Dakotans from many walks of life have watched as Western Legacy Development Corporation courted Rapid City officials with talks of building the nation's single-largest beef processing plant in their town.

However, Rapid City officials told Farm Forum Wednesday plans to build a $1.1 billion slaughter house with a harvest rate of 8,000 cattle per day appear to have been rejected - for now - as the company looks outside of South Dakota for a place to break ground on the ambitious project.

Megan Kingsbury, president of the proposed meat plant and CEO of Kingsbury & Associates, a debt equity capital firm based out of South Carolina, called the plant a "done deal," according to a Rapid City Journal article on July 12.

However, city communications coordinator Darrell Shoemaker told Farm Forum Wednesday Western Legacy has not made any formal contact with city officials, "indicating they are now pursuing another city or state."

Kingsbury said Rapid City is still in the running for the plant. She said she "would like the plant specifically to be in Rapid City" but added she has reached out to other cities in different states, including Cheyenne, Wyoming, as potential sites for the billion-dollar plant.

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She also said she spoke to Sen. John Thune on Wednesday about developing the plant in South Dakota, adding "we're working on it."

Farm Forum reached out to Thune's communications staff to confirm the details of the meeting. Annie Topp, Thune's Deputy Press Secretary, said Kingsbury never met with the senator, but she did meet with staffers to discuss "very basic" information about resources available to the company.

"Sen. Thune's staff accommodated the request for an informational meeting from this group as we routinely do with businesses, constituents and stakeholders. This meeting was handled at the staff-level, and Sen. Thune was not in attendance," Topp said.

Dezmond Ward, Sen. Mike Rounds' Communications Director, said Kingsbury also visited with Rounds' staff at their Washington office to make a general introduction.

The company president, who is also owner of Grimes Cattle Company in Kadoka and CEO of a South Carolina-based capital firm, doubled down on plans to develop a competitive meatpacking organization. In a phone call, she said Western Legacy has designs for multiple meat processing facilities with an 8,000-head-per-day harvest rate across the Midwest, with at least two facilities planned so far.

"Currently, it's all been speculation from third parties. Western Legacy is looking in South Dakota, both East River and West River. I would like the plant specifically to be in Rapid City. The municipality is all for it," Kingsbury said. "We are in talks with the [Wyoming] governor's office and their economic development team … so that door is also open. We are also in contact with other governors. I'm under [a non-disclosure agreement], so I can't disclose other sites specifically."

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All hat and no cattle?

Ritchie Nordstrom, Rapid City Council member

Council member Ritchie Nordstrom told Farm Forum the unprecedented facility spurred many logistical questions that Western Legacy never answered during their informal talks.

Based on previous reporting from the Rapid City Journal, Hani Shafai, president of Dream Design International, the development company working with Western Legacy, said the 1-million-square-foot facility would be too large for the Black Hills Industrial Center, the site for the proposed plant in southern Rapid City. Kingsbury later said Shafai's statements were inaccurate in a July 12 RCJ article.

"Working with municipalities, it's been fantastic. Ranchers, they're fantastic. There's a one-off individual who, when he gets a microphone, he goes off," Kingsbury said Wednesday. "[Dream Design had] their feelings hurt. Everybody thinks every piece of dirt is God's gift to earth. It's not."

Nordstrom, however, shared Shafai's sentiment, saying the site was "not going to work," because the amount of real estate required to accommodate the plant would prevent other businesses from developing in the area. He added the city's Tax Increment Financing (TIF) committee has already approved permits for other business to develop in the planning district.

"There just wasn't enough room for the packing plant," Nordstrom said. "We've got a battery manufacturer coming in and there are negotiations taking place. Other businesses are coming in that are interested in this property, so what was remaining … in that district area would not be sufficient enough for this slaughterhouse."

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A preliminary map of the Black Hills Industrial Center, an industrial zone in Rapid City under development by Dream Design International.

A definitional debate around 'formal communications'

Shoemaker said Western Legacy never reached out to the city or city officials to discuss specific details about their project and, as a result, the city has yet to issue a permit for Western Legacy to build at their proposed site.

The communications coordinator said he has personally heard of informal meetings or discussions between Kingsbury and city council members and staff, but maintained the city does not consider those formal communications with the city or official endorsements about the proposed plan.

"It’s not the same as company officials or representatives formally sitting down with appropriate City staff to present and review plans detailing location and the operations of the proposed business, addressing questions and issues, discussing options, time lines and the process moving forward.  None of that took place in this instance," Shoemaker said.

Kingsbury specifically criticized Shoemaker's statement by calling it "blatantly false." She said Western Legacy has spoken directly with Shoemaker, county commissioners, the mayor and multiple city council members.

"I have no idea where [Shoemaker] is getting license to make such a statement, but again, that is between him and his department," Kingsbury said.

Kyle Treloar, Western Legacy's director of development, told Farm Forum on Thursday the company has not turned in any formal application to the city for the proposed beef plant. He said they have obtained permits for the overall project and have had conversations with city officials and said disagreements between the city and the company circulates around how each party defines "formal communications."

"I would put this on the back of the fact we are an experienced development company," Treloar said. "So, yes, anytime you're developing something of this size, we're going to hear all sorts of things."

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Nordstrom, who sits on ward 2 of the Rapid City Common Council, said Western Legacy did not formally reach out to council members. He suggested there may be some on-going conversations between the aspiring meatpacker and the city's finance department, but added "all indications point to communications hav[ing] ceased."

He said council members have largely been "in the dark" on what, if any, official communications exist. He added council members are typically not privileged to discussions between prospective businesses and the city's finance and planning departments, but speculated city planners "did not have the information they needed to follow through with the facility."

South Dakota needs more processors

Nordstrom added he is worried the dispute could set a bad precedent for the city and leave the impression Rapid City is "anti-ag."

Eric Jennings, president of South Dakota Cattlemen's Association

Eric Jennings, a Meade County rancher and president of South Dakota Cattleman's Association, told Farm Forum it would be unfortunate if the beef plant wouldn't come to South Dakota, because the state would lose out on the large stream of revenue associated with the facility. He also said the facility would benefit the cattle industry as a whole.

"About a year ago, we were short about 6,000-head-a-day. We need that as a nation," Jennings said.

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Jennings added the plant would not be of major benefit to local ranchers, because the state does not have enough feedlots to manage the large number of cattle such a facility would require.

"It probably makes more sense to have a 1500-head-per-day [plant]. That's not to say that a larger plant wouldn't work - it's entirely possible - but as you up the size, you get into more logistical issues," Jennings said.

Shoemaker said the city maintains its invitation for Western Legacy to approach city officials and bring a formal proposal before the council.

"Whether or not the Western Legacy beef plant has a future in Rapid City depends on Western Legacy," Shoemaker said.