Since 2009, Mississippi taxpayers paid nearly $4 million to help Peco Foods Inc. and Koch Foods, both food processing companies targeted in immigration enforcement raids in early August.
Mississippi offers a variety of economic development programs to businesses, including tax incentives, grants and loans to encourage companies to locate or expand in the state, with the ultimate goal of bringing jobs to Mississippians.
Mississippi Development Authority spokesperson Melissa Scallan said that none of the food processing companies raided in the recent immigration enforcement operation — the nation’s largest in a decade — received traditional tax incentives from the state.
Families search for answers following immigration raids; 680 people working at food processing plants detained
The companies benefited from other incentives awarded to local governments for help with infrastructure improvements, including road construction and water and sewer systems. In some cases, the awards went unspent and returned to the state because either the company or local government could not meet certain requirements.
When taking the unspent funds into account, the state has earmarked close to $9 million for the Peco and Koch companies in the past decade.
MDA, the state’s economic development agency, administers grants through its Community Services Division, its Financial Resources Division and the federal Hurricane Katrina Community Development Block Grant to assist communities affected by the 2005 hurricane.
The development authority awards grants through its Community Services Division and the federal Katrina grant to local entities, such as towns or counties, to make public improvements benefiting nearby plants in exchange for those companies’ promises to add jobs to their facilities.
Grants from the Financial Resources Division go directly to companies, but they must have a local sponsor, such as an economic development group.
Regional development agencies also assist companies in receiving similar grants. In 1999, the Central Mississippi Planning and Development District prepared a grant application for the city of Canton, according to a 2018 report celebrating it’s 50th anniversary, which led to $1.2 million in infrastructure improvements to support expansion at the local Peco plant.
Here is a list of grants the state awarded to three of the companies — Peco Foods, Inc., Koch Foods and Pearl River Foods — targeted in the raids:
Peco, 2008, $1.09 million: Bay Springs received a $1,093,480 Katrina block grant and spent $1,092,800 of it “to replace damaged and underperforming equipment at the city’s existing wastewater treatment facility.” In exchange, Peco promised to retain 550 existing jobs at its Bay Springs plant, one of those raided in August.
Peco, 2009, $1.29 million: The town of Lake received a $1.3 Katrina block grant and spent $1,289,416.26 on infrastructure improvements, such as water and wastewater extensions and a new access road for Peco’s new feed mill in exchange for 28 new jobs.
Koch, 2011, $712,327: Morton received $712,500 in Community Service Division funds and spent $712,326.78 making improvements on publicly-owned Koch access roads. Koch created 36 jobs.
Koch, 2014, $897,640: Morton received $1.06 million in Community Service Division funds and spent $897,639.50 making improvements on publicly-owned Koch access roads. Koch created 80 jobs.
Pearl River Foods, 2016, $0: Leake County received a $1.5 million Community Service Division award for improvements to publicly-owned sites and buildings, but bids for the project came in much higher than $1.5 million and the county could not make up the difference. It left the money on the table and Pearl River Foods paid for the improvements.
Peco, 2018, $0: On behalf of Peco, local development agency Golden Triangle LINK received a $2.5 million grant for building improvements and $500,000 in “MS Works” funds for workforce training through the development authority’s Financial Resources Division. Peco acquired an empty warehouse in West Point to transform into freezer, cooler and storage space. The state awarded Peco the grants in exchange for 300 new jobs, but Peco “was not certain it would be able to create 300 jobs,” Scallan said, so the funds were never transferred.
Peco received 10 years of ad valorem tax exemptions from West Point and Clay County and reduced rates for city water, according to a May, 2018 story in The Columbus Dispatch.
Any unspent funds are “deobligated” and returned to the state’s coffers.