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Published May 10, 2010, 10:16 AM

Howard, SD, community battles back from pair of economic development setbacks

By: Melanie Brandert , The (Mitchell, SD) Daily Republic

HOWARD, SD — In recent times, Howard enjoyed a windfall of economic growth fueled by innovation and more than 200 new jobs created since 2001.

But in the last three months, the community has suffered two major economic setbacks.

In February, Dakota Beef, which had a plant in Howard, and North Dakota Natural Beef in Fargo entered into a co-packing partnership. As a result, Dakota Beef began to process its beef in Fargo, and Noah’s Ark, of Dawson, Minn., leased the Howard plant. It is operating with 15 to 20 workers, or about half of Dakota Beef’s workforce.

Last week, 16 of Knight and Carver Wind Group’s 55 employees at its Howard plant were laid off. Gary Kanaby, vice president of sales at the company location in suburban San Diego, said a strong likelihood exists for a second round of layoffs. It’s also possible the plant could shut down for two to six months.

While Randy Parry, president of the Maroney Rural Learning Center in Howard, remains confident in the community’s future, some local residents are concerned about future layoffs at Knight and Carver. Workers at the plant make and repair wind-turbine blades.

“It’s tough, because we’ve lost a lot of jobs,” said Tom Dold, who owns Dold Implement. “… They both claim they are going to pick up operation again. That remains to be seen.”

The Maroney Rural Learning Center is renowned nationally for being an innovator in rural development. The center was first known as Miner County Community Revitalization, a grassroots, nonprofit group that received $5.8 million over a 10-year period beginning in 2001 from the Northwest Area Foundation to continue and expand the community’s development vision. Accomplishments include boosting Howard’s sales-tax revenue by 163 percent during the past 10 years, attracting Dakota Beef, Knight and Carver, and Energy Maintenance Service to add dozens of jobs with benefits, decreasing poverty in Miner County and developing better housing for families.

The center uses Miner County’s example to assist other rural communities. Center officials are planning a $6.4 million expansion that includes a restaurant, wellness center, hotel and conference training center. The center recently received at least $1 million in loans and grants to assist with building that conference center, where wind-energy workers will receive workforce training.

The recent bad news is not prompting center officials to re-evaluate their approach.

“We will continue to do what we are doing to help people get to where they want to be,” Parry said. “We are going to continue to move forward, always looking at ways that we ourselves can improve and help individuals and entities.”

A University of South Dakota economics professor, Raymond Ring, called Howard’s situation with the two plants unusual.

Many communities of Howard’s size — an estimated 891 residents as of July 2008 — do not have two strong employers such as Dakota Beef or Knight and Carver, Ring said.

“Maybe Howard is taking a double shot just because both of these happened to come at almost the same time. I would think once these problems are taken care of, that as the economy recovers … wind power is something that is going to take off.

“They seem to have a lot going for them. But they certainly are going to be hurting for a few months.”

Parry said he doesn’t think the recent setbacks are an indicator of what lies ahead for Howard.

“This is something you have to take in stride. I believe the recession has hit both of those industries in a way,” he said. “It’s not a sign (of things) to come. That would be as if we were saying, ‘We lost,’ and we’re not going to ever say we lost.”

Parry noted that the Dakota Beef plant building is being used. Noah’s Ark is processing 100 animals per day, though it is employing 15 to 20 people full time, compared to Dakota Beef’s 38 workers when it closed.

Ring said he believes that Dakota Beef and North Dakota Natural Beef found a way to continue to produce with fewer workers while adjusting to lower demand.

Most of Dakota Beef’s employees who commuted from Mitchell, Madison or Huron went to Fargo, local officials said. Relocation packages were offered. Some of Dakota Beef’s managers in marketing and accounting stayed and continued working in Howard, Parry said.

Mayor Don Arens attributed Dakota Beef’s problems to the recession.

“I knew it was going to hurt right at the time,” he said of the plant’s closure. “A guy has got to keep thinking good about that, and everything is going to come back again.”

If Noah’s Ark hadn’t leased the plant, Arens said, the impact would have been greater.

While expressing concern about the situation at Knight and Carver, Parry called the layoffs there temporary. Once a couple contracts are signed, he said, employees will be recalled.

“For individuals and families affected by those layoffs, it is very much a concern for us,” Parry said. “It’s another little struggle you have to get through. We are not going to stop, lick the wounds and not do anything.”

Kanaby said the company remains committed to staying in Howard. Other than the plant, the company owns a building on Main Street and a house.

“The market for our blades has not developed as forecast,” he said, adding “there will be blades to build there.”

Despite local officials’ belief that the two plants will bounce back, some local residents — especially family members of affected employees — are concerned about what will happen in the meantime.

Brigette Stevenson, Epiphany, whose fiancè, Chano Juarez, works in the finishing department at Knight and Carver, fears that he and other employees will lose their jobs. Employees who were laid off could be recalled by Dec. 1, she said.

“They’re not sure how much longer they’ll work. They just have a few blades,” Stevenson said. “I’m just kind of worried about what they will do.”

Juarez hopes he might be offered one of a few positions in which employees could work for the company’s services division and travel.

Deb Cleveland, who owns Deb’s Diner, also is apprehensive about her son’s situation. Aaron Callies still works at the wind turbine plant, but he’s looking for another job.

“It probably would be easier if he was laid off, because the other ones have a family and kids,” she said, adding her son lives with his father. “It’s not making the economy in Howard much better.”

Cleveland, who has owned her restaurant for a year, said she hasn’t noticed a decline in business yet. But she expects her diner to be impacted at some point.

Arens’ confidence in the Rural Learning Center’s ability to attract rural and local development in the Howard area hasn’t diminished.

Faye Oines, front-end manager for Rafferty Robbins Drug Store, is also hopeful about the city’s future.

“It’s unfortunate that’s it happened, but I think the future is still bright for Howard,” she said. “I think we will persevere.”

Parry and Arens expressed optimism that Howard will rebound.

“I think Howard will come back OK,” Arens said. “We’ve got our ups and downs right now.”

Parry said the center is working with a lot of entities regarding the Dakota Beef plant and might make an announcement about its future in the next couple months.

Parry believes the key to Howard’s future is to work to grow, move forward and try to have a diversified, local economy. That involves working on job creation, housing and helping businesses weather the tough times of the recession.

“So if one segment goes down, the others can hopefully continue to grow and support it,” he said. “You want to build a community back up and transform it if it needs to be transformed.”