State rejects bid to buy Palmer slaughterhouse

August 6, 2006

By JOEL DAVIDSON

Frontiersman

MAT-SU - The fate of a state-owned meat processing plant in Palmer still is unknown after the Board of Agriculture and Conservation on Wednesday rejected a private bid to take over the plant.

North Pole butcher Bob Franklin wasn't able to secure finances to buy Mt. McKinley Meat and Sausage, and said Thursday that he wasn't surprised by the board's decision.

The problem, according to Franklin, was that the state requires that he run the plant for at least three years as a slaughterhouse or lose the property.

Franklin said he needed a $500,000 loan to get the plant up and running, but no one would loan him the money for a business the state could repossess.

&#8220It's just that you can't get anyone to finance it with the covenant on it,” Franklin said.

&#8220You can't pay half a million dollars back in three years.”

Owner of BY Farms near Fairbanks, Franklin already operates a successful meat-processing facility.

His plan to run the Palmer slaughterhouse would have meant the Division of Agriculture finally could drop what has become an annual financial drain on the state.

Earlier this year, the Board of Agriculture voted unanimously to authorize the state to sell the property.

If no acceptable bids were received to run the plant as a slaughterhouse, then the state was free to sell the property &#8220as is, where is” without any restriction on usage.

Franklin's offer was the lone bid. Now that it is rejected, the fate of the slaughterhouse is uncertain. Franklin suggested the state lease the property to him with the option to buy after three years. This would allow him to show potential investors that he has a viable business.

If the board makes the slaughterhouse available under those terms, Franklin said he would consider running the plant

&#8220My next step is to find out what the board is going to propose to the public,” he said. &#8220At that time, I will take a look at it.”

Mat-Su farmers and 4-H officials have expressed concern about the state's plan to sell the slaughterhouse.

The slaughterhouse butchers non-producing dairy cows, between 50 and 75 4-H animals, and hundreds of animals for wholesale annually. Several local agricultural producers say the viability of their operations depends on a successful local slaughterhouse.

Contact Joel Davidson at 352-2266 or joel.davidson@frontiersman.com.