Tax dispute hangs over Postville

By The Gazette Editorial Board

It seems as if the drama over the former Agriprocessors plant in Postville might never end. Now, Allamakee County and the plant's new owners are arguing over more than a half-million dollars in back property taxes, penalties and interest.

The county says SHF Holdings LLC should pay the bill. SHF representatives say they bought the beleaguered plant free and clear.

Caught in the middle are Allamakee County school children and residents, primarily in Postville, whose services depend on a $577,872 tax bill that somehow fell through the cracks in the bankruptcy and sale of the former Agriprocessors meatpacking operation.

It shouldn't have come to this. But now that it has, county officials and owners of the plant must work together to find a deal acceptable to all parties.

We're not sure why Allamakee County didn't get clarity on how the delinquent property taxes fit in with the blanket order forgiving current owners of Agriprocessors' past debts. Cedar Rapids-based attorney Wesley Huisinga, who is representing the county in the matter, told us Thursday that he didn't know why the county wasn't at the table during the bankruptcy proceedings, even though officials knew there were delinquent taxes on the property.

We're also not persuaded by the county's claim that an objection would have been filed if only officials had known the bankruptcy court planned to allow the plant to be sold free and clear.

SHF's Agri Star Meat & Poultry plant is one of the county's largest employers. The county had an interest in paying close attention to the details as the new company took over.

That delinquent tax bill equals more than $282,000 in income for the city of Postville and $133,000 for Postville Community Schools - much needed public money.

There's another important variable: the financial health of one of the county's largest employers. SHF has been updating the plant, hiring workers and investing money that could result in big returns for Allamakee County and its residents for years to come.

Many of the Postville plant's creditors wrote off what they were owed because their ongoing business relationship with a thriving meat packing plant was worth more to them than those outstanding debts.

Economic realities likely prevent Allamakee County from doing the same, but that doesn't mean there can't be flexibility.

If the issue isn't resolved soon, the county could sell the property for back taxes. More likely, a judge will decide who gets stuck with the bill.

Allamakee County and Agri Star's owners have drawn their lines in the sand. We'd like to see them look for common ground and explain why this oversight occurred.