Tyson Foods offers buyout of Cherokee plant lease
July 15, 2016
by Erica Shaffer
SPRINGDALE, Ark. – Tyson Foods is proposing an end to the company’s lease on a shuttered meat processing plant in Cherokee, Iowa.
The company offered to buy out the lease by paying the remaining four years of rent on the property at a cost of nearly $400,000. The company decided to buy out the lease after discussions with the Iowa Economic Development Authority. Wes Morris, president – Prepared Foods, said in a statement that Tyson is making the offer in an effort to resolve concerns about how the plant should be marketed.
“We hope the owner will accept our offer, which would end Tyson Foods’ ties to the plant and give the owner complete control over finding a new tenant,” Morris said. “We know the plant is important to Cherokee, which is why we’ve been working with the owner and local economic development authorities to find another business to lease the property. Several food companies expressed interest. Unfortunately, each decided it wouldn’t work for them.”
Tyson closed the plant in September 2014, and 450 jobs were eliminated. The plant manufactured deli meats, hams, Canadian bacon and hot dogs.
Community leaders in Cherokee had complained that Tyson was making it difficult to find a new use for the plant. Tyson is contractually bound to the Cherokee plant lease through Sept. 30, 2020. Morris noted that “neither the city nor property owner have offered any ways” to relieve Tyson of its lease obligations.
Sen. Chuck Grassley (R-Iowa) intervened in the dispute when he wrote a letter to Tyson CEO Donnie Smith urging a resolution to the impasse.
Now, the fate of the plant is up to Mark Langfan, a New York real estate investor whose family owns the plant. And while Tyson is willing to walk away from the shuttered facility, the company emphasized that Iowa remains “a vital part” of the company’s future.
“Make no mistake, Iowa is hugely significant to Tyson Foods,” Morris said. “We operate seven plants and employ more than 11,500 Iowa residents. In addition, we buy livestock from almost 2,500 independent family farmers in the state.
“When you factor such things as annual payroll and livestock purchases, the economic impact of our Iowa operations in 2015 was nearly $4 billion dollars,” Morris continued. “Over the last two years alone, we spent more than $100 million in the state to improve or expand our facilities.”