EB-5 visa program funded SD projectsMore than a dozen other large South Dakota projects were funded by the same controversial visa program used by the Northern Beef Packers Plant that is now bankrupt and under an apparent federal investigation.
SIOUX FALLS, S.D.— More than a dozen other large South Dakota projects were funded by the same controversial visa program used by the Northern Beef Packers Plant that is now bankrupt and under an apparent federal investigation.
Projects including a power plant, several dairies and a Black Hills hotel and casino were funded entirely or in part by wealthy foreigners who invested $500,000 each in exchange for green cards through the federal EB-5 program. Many of those projects are successful enterprises, but at least one other is a failure.
Former officials of the Northern Beef Packers plant say federal investigators have been asking questions about the financial dealings and EB-5. The 120 Chinese investors who loaned $500,000 each to the plant are now seeking in bankruptcy court to get as much of their investment back as they can.
But Ken Rutledge, CEO of Huron’s Dakota Provisions turkey processing plant, says the financing program worked well for that plant.
“It’s a terrific program,” he says.
Dakota Provisions borrowed $55 million from 110 foreign investors under the EB-5 program. It now employs about 800 people, even though it’s not yet running at full capacity.
Rutledge says Dakota Provisions has made all its interest payments to date and expects to pay off its loans on schedule at the end of next year.
Basin Electric also used EB-5 to help pay for its $400 million Deer Creek power station near Elkton. EB-5 money provided $105 million of that cost.
“It gave us a favorable interest rate for about one-fourth of the total cost of the project,” says Curt Pearson of Basin Electric. “The process that was advertised ... it worked well for us, and we were satisfied.”
Pearson says Basin Electric will pay off its EB-5 loans when they come due in 2015.
But the program didn’t work so well for two dairies and their foreign investors. Veblen East dairy went bankrupt in 2010 along with its cousin, the Veblen West dairy. They were bought in bankruptcy by a Minnesota company.