The Hyperion project: Boon or burden?
By Bret Hayworth Journal staff writer | Posted: Sunday, April 27, 2008
Moving gravel by shovel in a one-hour project to adjoin the new garage driveway he previously laid, on a warm April morning Joe Densberger of Elk Point, S.D., took a break to describe his support for the Hyperion Resources refinery.
He had one pro-Hyperion sign erected in his Main Street front yard, while another was on the ground near a white Lincoln auto parked on his grass. Densberger said the prospect of placing a refinery in Union County that could provide an estimated 1,850 permanent jobs has divided the town, and he has concerns about the impact in Elk Point.
"I hate to lose the bedroom community. That's what I like and have lived in -- small towns," he said.
That said, Densberger supports the project because "more jobs are great." An industrial electrician, he hopes to get a job himself, and within the last week went to the Hyperion downtown Elk Point office to inquire about a job.
Union County voters will decide June 3 whether to ratify or reject the county commission's decision last month to rezone 3,292 acres of agriculture land Hyperion controls into a new classification, Planned Energy Center Development. Hyperion officials have said they will go elsewhere if a majority of voters don't want its "green" energy center.
A 12-year resident of Elk Point, Densberger does have concerns that more Hyperion workers, especially during the construction phase, when non-area people are expected to be employed, could result in more crime. Densberger has worked out of town on construction projects and knows the mentality -- with "nothing to do," he said, the workers will head out to the bars and invariably make decisions that will require the intercession of law enforcement.
That's a belief that Sioux City councilman Aaron Rochester expressed in February during a council meeting.
"Our next budget meeting will be different if Hyperion comes to town," Rochester said during a review of the police department's 2008-09 operating budget. "It creates an issue if we have 10,000 subcontractors running about."
While many see dollar signs with the ripple economic effect that a Hyperion refinery could deliver -- perhaps up to $5 billion for state and local economies during the four-year construction phase -- numerous Siouxlanders are concerned about the burdens that the governments in Union County and surrounding counties might see.
Aside from more demands on law enforcement officials, the trucks coming to and from Hyperion will take a toll on the area's roads, increasing the need for maintenance. The influx of people could also mean a strain on social services and courts.
Covering the costs
How far out Hyperion workers would live is an open question.
A one-hour drive from the plant reaches south to Whiting, Iowa, east to Moville and Remsen, Iowa, northeast to Larchwood, Iowa, 10 miles north of Sioux Falls, west to Crofton, Neb. and just west of Yankton, S.D. and southwest to Laurel. Neb. Towns within that one-hour radius are seen as the sources for labor to Hyperion, a study performed by Stueffen Research in Vermillion determined.
While the Hyperion workforce could draw from up to 10 Siouxland counties, only the Elk Point-Jefferson School District and governmental entities in Union County will receive direct property tax benefits. According to the Stuefen study, Union County and EP-J would annually take in an additional $8.4 million and $20 million, respectively, in annual property taxes from the increased taxable valuation from the 400,000-barrel-per-day refinery.
Ed Cable, co-chairman of the opposition group Save Union County Committee, said analysis by the group estimates an annual operating increase in Union County ranging from $10 million to $14.6 million for schools, law enforcement, fire protection, the drain on rural water systems and other services.
"This is only in Union County, and certainly the surrounding counties, including those in Iowa and Nebraska, will have increased costs as well," Cable said, but without the plump property taxes Hyperion will generate in Union County, he added.
Union County Commission Chairman Doyle Karpen of Jefferson, who isn't taking a public stance on how he'll vote June 3, said the $8.4 million annual tax infusion projection "sounds a little heavy."
"If that $8 million is a good number, that should be more than enough to add what (additional) services are necessary, and also (give) tax relief, both," Karpen said.
In 2006, the taxable valuation for all property in Union County was $1.2 billion, while the assessed valuation of Hyperion facility will likely add at least $2 billion, Karpen noted. With that much more property valuation, the current county property tax of $3.15 per $1,000 of assessed valuation could greatly drop, providing major tax relief, he said.
Property taxes would first be assessed to Hyperion after the first Nov. 1 on which there is any plant construction, roughly pegged for November 2010, if the plant proceeds. Property tax revenues would be begin to flow to the county a few months later.
If Hyperion comes on board, Karpen said he envisions the additional burdens on Union County government would be contained to three areas -- law enforcement, courts and roads.
Roads agreement debated
A joint powers road improvement and maintenance agreement between Union County and the South Dakota Department of Transportation covering county roads near the proposed plant is being worked out, but nothing been signed.
Karpen said while the agreement "is not poured in concrete... I feel comfortable that the state will be there to help us, if we find it necessary."
Hyperion has identified three county roads -- 473rd Avenue, 315th Street and 475th Avenue -- that would have the most truck traffic, and those roads are included in a recent version of the DOT/county proposal.
South Dakota transportation secretary Darin Bergquist said Friday that several versions of an agreement have gone back and forth between the two parties. Bergquist said it is unlikely an agreement will be finalized prior to the June 3 vote.
"The transportation commission has pledged the department's support of the project, should it go forward," Bergquist said.
Cable said the proposed road agreement is inadequate, since there is nothing in the proposal that says the state will provide funding to reimburse the county for paving costs, only that it may. No cost estimates of road work are in the pending agreement.
A better step, Cable said, would be for Hyperion to complete an impact statement on all county infrastructure. Further, he said, Hyperion should pay for the cost of all road improvements as part of a development agreement.
Cable disputes Hyperion estimates that 100 trucks a day would use the roads. "I suspect there would be 100 before 5 o'clock in the morning," he said.
Karpen, who works as a truck driver himself, noted there are 80 to 100 trucks daily at a Hudson, S.D. ethanol plant, so the estimate of 100 trucks per day carrying up to 25-ton payloads moving from Hyperion seems likely, he said.
Karpen said if the rezoning referendum passes, a traffic count study will take place and the county will make sure the roads are engineered to needs.
"We'll maintain the roads so they're all in safe operating condition...," Karpen said. "The revenue would have to come from revenue generated from the (Hyperion) project."
Cable contended the vote in five weeks was set too hastily.
"There should be an overall development agreement between the county and Hyperion... that shows, first of all, what the needs will be, not only for roads, but other infrastructure, and who should be paying for what increments of those infrastructure increases," Cable said.
More people, more crime
Union County Sheriff Dan Limoges said the arrival of thousands of workers in Union County -- an estimated 10,000 will toil for a week or few months in the projected four-year construction phase -- will certainly result in an increase in criminal activity. Limoges said he wants to keep an open mind about the Hyperion workers, but it's just simple math -- more people means more crime.
He said eventually the sheriff's department would have to add more deputies to monitor Union County, but he couldn't quantify how many employees that might be. Limoges said he'd work with the county commissioners to make sure staffing is adequate if the refinery is approved.
"It's hard to fathom really what to expect with the influx... Short-term, I don't know that there's going to be a major influx, as far as services goes, for the county. But I think long-term, as it goes and grows, sure. There will be more property owners," Limoges said.
He noted that in the building of the plant, most of the housing will be provided by Hyperion in the form a $88 million work camp at near the refinery site.
"It's going to impact the local area, including other counties," Limoges said.
Clay County lies just west of the proposed site, and county sheriff Andy Howell said he figures the impact on his office would include monitoring increased traffic on South Dakota Highway 50 and processing civil warrant matters.
He said he has a concern that the "transient" workers could leave the area with unpaid fines, but Howell said conversations with Hyperion officials "have been pretty reassuring."
Limoges is undecided how he'll vote on an important June 3 Union County rezoning that would enable Hyperion to proceed.
"I see the pros and the cons, I see it both ways at this point," Limoges said.
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com.
Timeline, quiz, video, blog and moreSee a timeline, take a Hyperion quiz, see relatedvideos and stories as well as read more news in our hyperion blog.
He had one pro-Hyperion sign erected in his Main Street front yard, while another was on the ground near a white Lincoln auto parked on his grass. Densberger said the prospect of placing a refinery in Union County that could provide an estimated 1,850 permanent jobs has divided the town, and he has concerns about the impact in Elk Point.
"I hate to lose the bedroom community. That's what I like and have lived in -- small towns," he said.
That said, Densberger supports the project because "more jobs are great." An industrial electrician, he hopes to get a job himself, and within the last week went to the Hyperion downtown Elk Point office to inquire about a job.
Union County voters will decide June 3 whether to ratify or reject the county commission's decision last month to rezone 3,292 acres of agriculture land Hyperion controls into a new classification, Planned Energy Center Development. Hyperion officials have said they will go elsewhere if a majority of voters don't want its "green" energy center.
A 12-year resident of Elk Point, Densberger does have concerns that more Hyperion workers, especially during the construction phase, when non-area people are expected to be employed, could result in more crime. Densberger has worked out of town on construction projects and knows the mentality -- with "nothing to do," he said, the workers will head out to the bars and invariably make decisions that will require the intercession of law enforcement.
That's a belief that Sioux City councilman Aaron Rochester expressed in February during a council meeting.
"Our next budget meeting will be different if Hyperion comes to town," Rochester said during a review of the police department's 2008-09 operating budget. "It creates an issue if we have 10,000 subcontractors running about."
While many see dollar signs with the ripple economic effect that a Hyperion refinery could deliver -- perhaps up to $5 billion for state and local economies during the four-year construction phase -- numerous Siouxlanders are concerned about the burdens that the governments in Union County and surrounding counties might see.
Aside from more demands on law enforcement officials, the trucks coming to and from Hyperion will take a toll on the area's roads, increasing the need for maintenance. The influx of people could also mean a strain on social services and courts.
Covering the costs
How far out Hyperion workers would live is an open question.
A one-hour drive from the plant reaches south to Whiting, Iowa, east to Moville and Remsen, Iowa, northeast to Larchwood, Iowa, 10 miles north of Sioux Falls, west to Crofton, Neb. and just west of Yankton, S.D. and southwest to Laurel. Neb. Towns within that one-hour radius are seen as the sources for labor to Hyperion, a study performed by Stueffen Research in Vermillion determined.
While the Hyperion workforce could draw from up to 10 Siouxland counties, only the Elk Point-Jefferson School District and governmental entities in Union County will receive direct property tax benefits. According to the Stuefen study, Union County and EP-J would annually take in an additional $8.4 million and $20 million, respectively, in annual property taxes from the increased taxable valuation from the 400,000-barrel-per-day refinery.
Ed Cable, co-chairman of the opposition group Save Union County Committee, said analysis by the group estimates an annual operating increase in Union County ranging from $10 million to $14.6 million for schools, law enforcement, fire protection, the drain on rural water systems and other services.
"This is only in Union County, and certainly the surrounding counties, including those in Iowa and Nebraska, will have increased costs as well," Cable said, but without the plump property taxes Hyperion will generate in Union County, he added.
Union County Commission Chairman Doyle Karpen of Jefferson, who isn't taking a public stance on how he'll vote June 3, said the $8.4 million annual tax infusion projection "sounds a little heavy."
"If that $8 million is a good number, that should be more than enough to add what (additional) services are necessary, and also (give) tax relief, both," Karpen said.
In 2006, the taxable valuation for all property in Union County was $1.2 billion, while the assessed valuation of Hyperion facility will likely add at least $2 billion, Karpen noted. With that much more property valuation, the current county property tax of $3.15 per $1,000 of assessed valuation could greatly drop, providing major tax relief, he said.
Property taxes would first be assessed to Hyperion after the first Nov. 1 on which there is any plant construction, roughly pegged for November 2010, if the plant proceeds. Property tax revenues would be begin to flow to the county a few months later.
If Hyperion comes on board, Karpen said he envisions the additional burdens on Union County government would be contained to three areas -- law enforcement, courts and roads.
Roads agreement debated
A joint powers road improvement and maintenance agreement between Union County and the South Dakota Department of Transportation covering county roads near the proposed plant is being worked out, but nothing been signed.
Karpen said while the agreement "is not poured in concrete... I feel comfortable that the state will be there to help us, if we find it necessary."
Hyperion has identified three county roads -- 473rd Avenue, 315th Street and 475th Avenue -- that would have the most truck traffic, and those roads are included in a recent version of the DOT/county proposal.
South Dakota transportation secretary Darin Bergquist said Friday that several versions of an agreement have gone back and forth between the two parties. Bergquist said it is unlikely an agreement will be finalized prior to the June 3 vote.
"The transportation commission has pledged the department's support of the project, should it go forward," Bergquist said.
Cable said the proposed road agreement is inadequate, since there is nothing in the proposal that says the state will provide funding to reimburse the county for paving costs, only that it may. No cost estimates of road work are in the pending agreement.
A better step, Cable said, would be for Hyperion to complete an impact statement on all county infrastructure. Further, he said, Hyperion should pay for the cost of all road improvements as part of a development agreement.
Cable disputes Hyperion estimates that 100 trucks a day would use the roads. "I suspect there would be 100 before 5 o'clock in the morning," he said.
Karpen, who works as a truck driver himself, noted there are 80 to 100 trucks daily at a Hudson, S.D. ethanol plant, so the estimate of 100 trucks per day carrying up to 25-ton payloads moving from Hyperion seems likely, he said.
Karpen said if the rezoning referendum passes, a traffic count study will take place and the county will make sure the roads are engineered to needs.
"We'll maintain the roads so they're all in safe operating condition...," Karpen said. "The revenue would have to come from revenue generated from the (Hyperion) project."
Cable contended the vote in five weeks was set too hastily.
"There should be an overall development agreement between the county and Hyperion... that shows, first of all, what the needs will be, not only for roads, but other infrastructure, and who should be paying for what increments of those infrastructure increases," Cable said.
More people, more crime
Union County Sheriff Dan Limoges said the arrival of thousands of workers in Union County -- an estimated 10,000 will toil for a week or few months in the projected four-year construction phase -- will certainly result in an increase in criminal activity. Limoges said he wants to keep an open mind about the Hyperion workers, but it's just simple math -- more people means more crime.
He said eventually the sheriff's department would have to add more deputies to monitor Union County, but he couldn't quantify how many employees that might be. Limoges said he'd work with the county commissioners to make sure staffing is adequate if the refinery is approved.
"It's hard to fathom really what to expect with the influx... Short-term, I don't know that there's going to be a major influx, as far as services goes, for the county. But I think long-term, as it goes and grows, sure. There will be more property owners," Limoges said.
He noted that in the building of the plant, most of the housing will be provided by Hyperion in the form a $88 million work camp at near the refinery site.
"It's going to impact the local area, including other counties," Limoges said.
Clay County lies just west of the proposed site, and county sheriff Andy Howell said he figures the impact on his office would include monitoring increased traffic on South Dakota Highway 50 and processing civil warrant matters.
He said he has a concern that the "transient" workers could leave the area with unpaid fines, but Howell said conversations with Hyperion officials "have been pretty reassuring."
Limoges is undecided how he'll vote on an important June 3 Union County rezoning that would enable Hyperion to proceed.
"I see the pros and the cons, I see it both ways at this point," Limoges said.
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com.
Timeline, quiz, video, blog and moreSee a timeline, take a Hyperion quiz, see relatedvideos and stories as well as read more news in our hyperion blog.
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AnnieO wrote on Apr 28, 2008 1:19 PM:
Tim H wrote on Apr 28, 2008 9:01 AM:
BUILD IT!! "
Dilbert wrote on Apr 28, 2008 6:24 AM:
a mom wrote on Apr 27, 2008 7:22 PM:
IowaBoy wrote on Apr 27, 2008 12:37 PM: