Integrated poultry plant, feed mill met with lawsuit in Nebraska

By Aerin Einstein-Curtis

- Last updated on GMT

© iStock
© iStock
A community group in Fremont, Nebraska is suing the city to protest against an attempt by Costco to bring a large poultry processing facility to the area.

The lawsuit was brought in the District Court of Dodge Country by James Jaksha, Wesley Schiermann and Pamela Allen, members of Nebraska Communities United (NCU), and alleges that city officials followed incorrect procedure to annex and “blight”​ 992 acres of property so that benefits could be offered to a company interested in the property. These actions, they say, are a violation of state law and violated their due process. 

The complex that had been proposed for the property included an integrated poultry processing facility that would have its own feed mill, hatchery and processing facility.

The NCU members filed the lawsuit on Monday, according to court documents. The group has also requested a temporary injunction in the matter, which is expected to have a hearing on August 4, said Laura Krebsbach, regional representative for the Socially Responsible Agricultural Project, which is assisting with the lawsuit.

The campaigners are objecting to several different issues including the secrecy with which the project was handled by the city and company, she told FeedNavigator.

Much of the project planning was done behind closed doors and when it was put to a public vote it already had the full support of members of the city council, alleged Krebsbach.

“The other thing that was scary is the big picture,”​ she said. “We’re losing competition in the food supply – the vendor is the producer and processor that leads us to complete vertical integration.”

Although outside of the lawsuit, the group also has reservations about Costco Wholesale Corporation’s (Costco) ability to run the proposed facility and what it would mean for farmers involved with bird production, said Krebsbach. “What you are is a chicken coop janitor – the bank owns the building, the integrator owns the chickens and the feed and you’re at their mercy,”​ she added.

The lawsuit is specific to city elected officials who are allegedly violating due process and Nebraska statutory law regarding blighting property and is not set to be expanded, she said.

Case details

In its case the group is seeking for the court to agree that decisions made by the Fremont City Council both deprived citizens of the right of due process and “violated provisions of the Nebraska Community Development Law.”​ And, group members are asking that the decisions be voided or rescinded.

In 2016 Costco looked at bringing a large chicken processing facility to the area around Fremont, Nebraska, said group lawyer Greg Barton in the lawsuit.

“One of the sites that Costco expressed an interest in for the proposed facility in early 2016 was approximately 414 acres of vacant, rural agricultural crop land commonly referred to as the ‘Hills Farm Sites,’” ​he said. “The ‘Hills Farm Sites’ were then located south of the geographical territorial limit of the City of Fremont.”

Members of the city government were apparently negotiating with the company at that point and offering incentives like tax increment financing, he said. However, the land was outside of city limits and property called the “Roadway Subdivision”​ was between the two locations.

To provide tax benefits, the properties would have to be annexed into city limits and declared “blighted and substandard,” ​said Barton in case documents. By May, landowners had filed petitions for voluntary annexation and for annexation and consent in regards to the properties and a group had been hired to assess the area for a blight and substandard study.

The city council and mayor voted to approve a deal with Costco prior to the petitions being brought to the council, he said. Moves to annex the area were started on June 21 and were completed on July 7, while the combined 992 acre plot was proposed as a blight area on June 27 and declared one on July 12.

A redevelopment plan for the area for the Costco Poultry Complex project was introduced on July 12 to use the 400 acres of what had been farm land and the project was approved on July 19, said Barton.

However, the predisposition of the council members and mayor prior to public hearings on the topic meant there was no impartial decision made on the project, and that there was no due process of law for those who had concerns about the facility, he said. The group is asking that the votes on the project be voided and prevented from happening in the future.

Additionally, the blighted and substandard review has been misapplied as it is a process that was intended to address urban areas not rural ones, he said. “None of the above-referenced statutory conditions which establish blight or substandard urban conditions are present on the rural, agricultural ‘Hills Farms Sites,’”​ he added.

“The City of Fremont declared the over 400 acres of vacant rural crop land that comprise the ‘Hills Farms Sites’ to be blighted and substandard for the sole purpose of enabling the City of Fremont to funnel tax increment financing to Costco, a private developer, in ‘Redevelopment Project No. 1, Costco Poultry Complex,”​ he said.

The group is also asking for the judge to say that the decision should not stand and that efforts made in the project should not have any legal effect, said Barton in the case document.  The group also asks for attorney and court fees along with any “further relief as the Court deems to be just and proper.”

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