Windom asks Minnesota for $18 million as the potential closure of HyLife Foods looms

WINDOM — The city of Windom is asking the state of Minnesota for $18 million dollars to help soften the blow of a potential closure of the HyLife Foods Windom meatpacking plant, which employs 1,007 people.

The company sent a conditional layoff notice to its workers in April, explaining that it was attempting to find a buyer for the facility but that if it did not, layoffs would occur either between April 17 and May 1 or between May 19 and June 2.

Since then, city and state officials, including staff from Minnesota’s congressional delegation, have been meeting in hopes of working with HyLife or, if needed, cushioning the blow to Windom and the surrounding communities.

In late April, HyLife filed for Chapter 11 bankruptcy in Delaware.

On Tuesday, the Windom City Council unanimously passed a resolution requesting $18 million from the state — $6.5 million for reducing wastewater treatment plant debt with the Minnesota Public Facilities Authority, $1 million for transitional aid to the Windom Area School District, and $10.5 million for housing.

“There’s only a couple weeks of the legislative session left, and then the state systems would be kind of coming through there, approved by the legislature,” said City Administrator Steve Nasby. “So we don’t have a whole lot of time to wait to see what eventuality happens with the plan. We need to try and plan it out.”

The three specific requests made in the resolution were chosen because while HyLife’s closure would have many impacts in the community, the state can only act in a few specific ways, he explained.

One of the requests stems from Windom’s construction of a $19 million wastewater plant, after the state required the city to upgrade its facility. Bonding money and a grant paid for about $ million. Given that HyLife’s predecessor was using about 40% of the capacity of the wastewater plant, it had to pay for about 40% of the cost, with the city footing the rest of it.

Currently, HyLife still owes about $2 million, and should it find a buyer, that buyer would need to pay that off. The resolution asks the state for that amount, plus the remaining cost of the project, which would alleviate the burden on local taxpayers, Nasby explained.

The request for $1 million to help the school stems from the fact that about 100 Windom students have at least one parent working at HyLife. State aid to schools is calculated with a formula based on the number of students attending.

If all the students with parents working at HyLife had to leave to find jobs elsewhere, that would leave the school about $1 million short. The funds requested would help the school adjust to its new student population requirements.

The last chunk of money is for housing assistance. The Windom Apartments are currently being constructed, but the builders have a deal with HyLife to put tenants in the building. While the deal is a private one and the city has no direct involvement, there was a TIF agreement to help incentivize the construction of the building. Should the developers decide not to complete the building, the city of Windom would like to set funds aside to finish construction. A half-built building would not serve anyone, Nasby said, and would not help attract new employers to the area.

“This is a request for state assistance. There’s no guarantees, it’s not that we’re going to get these dollars,” Nasby emphasized.

Windom Mayor Dominic Jones said he had been speaking with both state and federal legislators about the HyLife issue.

“It’s kind of an unprecedented event. You know we’ve not been through this before, we’re kind of walking our way through it as best we can,” Nasby said.