Farbest plans more automation improvements, upgrades

By CANDY NEAL
cneal@dcherald.com

HUNTINGBURG — Farbest Foods is planning to make more improvements to its facility.

As part of that, company representatives asked the Huntingburg Common Council to authorize the issuance of $1 million in economic development bonds to help with the $32.5 million Farbest is investing in improvements and automation upgrades to its Huntingburg site.

Ted Seger, president of Farbest Foods, said the automation upgrades would help the company to retain and attract more qualified employees, so that Farbest would not have so many unfilled positions.

“This is the only way that we can compete,” he told the council, “to make jobs safer, easier, and fortunately, I think for us, (have) fewer jobs. We’re short close to 50 people right now. That just means we will be short 30 when we’re done with this project.”

The improvements Farbest plans to make include modernizing and updating different areas of the facility, adding automation that will replace 22 positions, and building a 22,000-square-foot structure.

“We have more than 22 positions open right now,” said Jarod Morrison, chief financial officer of Farbest Foods. “This is really about helping us combat the challenges of filling the positions.” The improvements will help retain more than 600 current positions, he explained.

Construction is set to begin in September. The building should be completed by summer 2022 and the other improvements in the fall of that year.

In 2017, Farbest requested and received about $3.5 million in economic development bonds. At that time, the company was making $21.7 million in improvements and updates to different parts of the facility; that work was completed in 2018.

Seger thanked the council for its support through approving those bonds. “The automation that we put in back then helped us retain employees and make the jobs easier and safer, especially through this last year and a half, when COVID was all around.” he said. “Having those jobs automated, it kept us going in both of our facilities. And in general, the Farbest business is about as good as it has ever been.”

Councilman Steve McPherron said that since 2017, he has noticed improvements.

“I’ve seen what you’ve done. The jobs have gotten more technical and better, and the wages have gone up. So that’s good,” he said. “Automating this will lead into that direction even more, as they become more technical.”

Like the last time, the city would authorize the issuance of taxable economic development bonds and Farbest, as the developer, would buy and hold the bonds,” City Attorney Phil Schneider explained to the council. The debt service on the bonds would be funded by the tax-increment financing, or TIF, revenue generated in the county portion of the 400 West economic development area, he said, since the improvements will be located in the county section of the economic development area.

“The city has no liability on these bonds. The only liability it has is to apply the revenue of the 400 West increment of the county side to the debt service on the bond,” Schneider said, “to the extent that if it would be insufficient to service the debt, the bondholder is just out because they are holding the bonds.”

This will be added to the balance of the 2017 bonds, and the term would expire in February 2034, which is the same as the 2017 agreement. “We’re not extending the term of that TIF district,” Schneider said. “We’re adding to the pledge of those TIF revenues.”

After hearing the presentation, the council introduced the ordinance to authorize the issuance of the bonds and authorize pledging the TIF revenue. Before the request can be considered for final approval, the Huntingburg Economic Development Commission must hold a public hearing; that has been set for 4:15 p.m. Tuesday at City Hall, 508 E. Fourth St. The Huntingburg Redevelopment Commission will also meet Tuesday to discuss the proposal; that meeting, also at City Hall, will be at 5:15 p.m.

The council will revisit the request at its Aug. 24 meeting.




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