Many South Dakota projects used EB-5 visa program

2013-11-10T17:00:00Z Many South Dakota projects used EB-5 visa programThe Associated Press The Associated Press
November 10, 2013 5:00 pm  • 

SIOUX FALLS | 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 have said 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 said.

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 said 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," said Curt Pearson of Basin Electric. "The process that was advertised ... it worked well for us, and we were satisfied."

Pearson said 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.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. farmer
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    farmer - November 11, 2013 2:22 am
  2. tanstaafl
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    tanstaafl - November 10, 2013 7:26 pm
    This is not a partisan issue, is it? I mean, this program has bi-partisan support, right? And Republican governors have been ultimately responsible with administering this program, probably with at least tacit support from Democrats. The point being, no one in either party should ever criticize anyone in the other party for supporting socialism, government interference in the marketplace, government picking winners and losers, and so forth, because this program demonstrates that Republicans are quite capable of doing all that.
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