County gives approval to proposed new rail authority to serve Mitchell, Davison County

Jun. 11—MITCHELL — The Davison County Commission voted Tuesday to approve forming a new railroad authority, which is being formed to help drive development around the under-construction soybean processing facility set to open in late 2025.

The commission approved the formation of the Davison County Railroad Authority during its meeting at the Davison County North Offices. Railroad authorities require at least two government bodies as sponsors. The city of Mitchell will consider a similar resolution to join the authority during its regular meeting on Monday, June 17.

Toby Morris, a senior vice president at Colliers Securities, spoke to the commission to encourage their approval on the matter. He said having the authority is an economic development asset that would allow the county to access low-interest funds or grants to support further development along the line.

The High Plains Processing facility is located about 2 miles south of Mitchell along State Highway 37 and the BNSF Railway line that runs through Mitchell.

Aside from Morris’ support, the only public input came from Mitchell resident Steve Sibson, who expressed his concern over how rail authorities are comprised in terms of members and whether they are elected or appointed. The Davison County Commission appointed Chris Nebelsick and Mike Blaalid to the authority as part of the approval process on Tuesday.

“Citizens are basically locked out of the process. If we are not happy with what is going on, we can’t elect someone else. … We’re cut out of the process,” Sibson said.

If it’s a five-person board, as was discussed on Tuesday, two members each would be from the Davison County Commission and the Mitchell City Council and a fifth member would be appointed at-large. It’s not yet clear what the process would be for term limits or cycling at-large members on and off the board, as the bylaws have yet to be written.

“Railroad authorities have the taxing authority but they’re not elected officials,” Sibson said. “I would like us to have a second thought about what we’re doing. Not against railroads or the soybean plant but I am concerned about how we’re going about it.”

Commissioner Denny Kiner asked about the county being involved in the new Davison County authority and the existing Mitchell Rapid City Railroad Authority, which has run to counties west of Mitchell for many years. Commission Chairman Randy Reider noted that the county could be in both, comparing it to a person being in the Lions Club and Rotary Club at the same time.

“By passing this, you’ll be in the Optimist Club, as well,” Morris quipped.

There were also questions among the commissioners about the ownership makeup of High Plains Processing and its involvement with joint owner BP Products North America, wondering how much BP has invested in the project. Nebelsick alluded to the project getting an additional funding package for the complex’s construction.

“I am intrigued about why a $500 million company wants an $18 million loan,” Nebelsick said.

Commissioner John Claggett said that’s a question for the Governor’s Office of Economic Development, as “they’re the ones who pulled all that together.” As of Tuesday afternoon, it wasn’t clear if GOED had approved additional funding, as the state’s boards and commissions website was down.

According to filings with the Securities and Exchange Commission, High Plains Processing and its associated companies committed $192 million into High Plains Partners from South Dakota Soybean Processors and “other regional investors” and then “created a joint venture with another partner to create High Plains Processing LLC” in September 2023 to build the Mitchell facility.

The Davison County Commission approved a $21 million tax-increment financing proposal in April 2023 to pay for site work, improve power, water and natural gas utilities and a turn lane into the facility. In 2023, a reinvestment payment program was approved by the South Dakota State Board of Economic Development for $6.6 million (not to exceed the sales and use tax on the project), which will offset upfront costs associated with the project.

Nebelsick has previously disclosed himself as an investor in the project and recused himself from the county TIF approval process.

Other county business:

* At the conclusion of a June 6 executive session and meeting, the county’s human resources director Tonya Meaney resigned her position. Meaney was the first person to hold the role in house for the county in 2021. The commission is advertising to fill the position.

* Meeting as the board of adjustment, the commission approved a temporary asphalt mixing facility at the request of the Duininck company. The plant will be near the intersection of 263rd Street and 409th Avenue near Ethan and will be used to mix asphalt for a repaving project on State Highway 42 for 25 miles east of Ethan that will be completed in 2025.

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