Sleepy Eye to sell former Del Monte plant

Heartland Properties to use property as warehouse

SLEEPY EYE - The City of Sleepy Eye is preparing to sell the former Del Monte plant to Heartland Properties.

During Tuesday's Sleepy Eye City Council meeting, a resolution was unanimously approved calling for a public hearing on a proposed 15-year tax abatement of up to $400,000. The abatement would be used to repay Sleepy Eye for incentives offered to Heartland Properties of Andover, LLC (also known as Heartland Tire) for a discounted purchase price of $600,000 for the former Del Monte Corp. plant.

“We expect the property will generate about $30,000 in taxes payable to the city each year, so we will take that tax money and pay ourselves back for the $400,000 until it is paid off,” said Sleepy Eye City Manager Bob Elston. “There is a requirement of generating one full-time job with a wage of $25 to $30 an hour or so. That will be decided at the Nov. 10 city council meeting. We are just calling for the hearing now.”

Action came to call for the Nov. 10 public hearing came on a resolution by Councilor Kristina Andres, seconded by Nate Stevermer that passed unanimously. Stevermer called for the first reading of an ordinance to sell the former Del Monte plant (all property inside the fence at the plant site).

Del Monte closed the plant in 2019 after nearly 80 years in operations. Seneca Foods bought the property in 2020 and sold it to a pet food manufacturer. The plant was sold again to an investment firm and eventually went into foreclosure. Sleepy Eye Public Utilities would later purchase the property for $600,000 in March.

Elston said Heartland Properties wants to close on the property sale for $600,000 cash before the end of 2026. He said Heartland wants to use the property as a warehouse.

In other news, the city council unanimously approved up to a 10-year property tax abatement not to exceed $1,020,000 for water park repairs, bike trail pavement and a ballpark lavatory Tuesday. Elston said plans call to issue bonds for work on some of the city’s larger recreational items, the water and baseball parks and bike trail.

“It’s a new way to issue bonds that we’ve never done before, but that’s why we have George (Eilbertson), our Northland Securities Bond Underwriter,” said Elston.

“The financing will be considered at the Nov. 10 city council meeting,” said Eilbertson. “Tonight, we have a tax abatement public hearing to finance three projects, ballpark lavatories, trail improvements and pool repairs. We’re using tax abatement in two different ways tonight. First, for a public purpose which we are talking about here. A second hearing for a different type of tax abatement will be discussed to assist in economic development.”

He said some of City of Sleepy Eye’s bonds for the water park project will drop off soon, so the city is looking at continuing them for new projects. 

“The new bonds for the three new projects total slightly less than $150,000 a year,” said Eilbertson. “They will net the city about $963,000 for the three projects and pay off the debt over 10 years with nine principal payments. It’s pretty efficient financing, a good way to do recreational projects. The bond sale will be Nov. 10.”

“Sounds like a good deal,” said Councilor Doug Pelzel.

No other comments were received at the tax abatement hearing.

Tax abatement approval came on a resolution by Stevermer, seconded by Councilor Andres.