Wells' Dairy pays back $1.2 million to state

Monday, September 29, 2008

Wells' Dairy has been asked to pay back $1.25 million of a nearly $3 million state award after they missed a job creation and retention goal by about 150 jobs.

The debt to the state has already been paid, according to a statement from the Le Mars ice cream and frozen novelty producer's CEO Mike Wells.

"We live up to our commitments," he said in a release from the Iowa Department of Economic Development (IDED).

Wells' Dairy originally received $2.9 million from the Iowa Values Fund in 2004 in forgivable loans. The money was designated to help build the company's new corporate center at the southwest edge of Le Mars. The facility was completed in 2006.

According to the IDED's release, these incentives were based on Wells' Dairy investing $25 million to build the corporate headquarters, creating 129 jobs and retaining 346 existing "high quality" positions by June 11, 2008.

Those jobs had to meet an average wage of $28.87 per hour.

Currently, the company's number of qualifying jobs is 317.

That number, found in the IDED's recently completed review of Wells' Dairy, is 158 people less than the award's targeted total.

Based on that number, IDED decided Wells' Dairy must pay back $1,251,414 to the state.

Mike Tramontina, director of IDED, stated in a press release that IDED officials understand that Wells' Dairy made business decisions over the past four years to support the company's ability to grow and expand for the long term.

Wells' Dairy, he said, has a 95-year history of contributing to Iowa's economy.

"At the same time, IDED must be stewards of the State's investment and have therefore negotiated the repayment of funds based on the project parameters that were unmet," he stated.

Wells' Dairy, according to the IDED press release, cites swift record increases in commodity ingredient costs throughout the past two years and its 2008 decision to sell off their fresh dairy business as the primary reasons for falling short on the job creation goals.

"While many of the jobs that went with the sale of its Le Mars milk plant were retained in the Le Mars community by the new owner, those jobs were not able to be counted in Wells' Dairy's retention numbers," the release stated.

Wells' Dairy sold both its Le Mars milk plant and Omaha yogurt plant to other corporations in the winter of 2007-08.

Then in January, Wells' announced the cut of about 20 jobs, mainly corporate.

By consolidating all the Le Mars corporate offices into one location, Wells' Dairy, the release noted, has become more efficient than anticipated.

Ongoing requirements to support the business are less than originally projected.

Wells thanked the state of Iowa in the release for recognizing Wells' Dairy's need to "make decisions in the interest of our companies health, vitality and long term stability."

Respond to this story

Posting a comment requires free registration: