19-03-2025
Railroad Board changes loans for two projects
PIERRE, S.D. (KELO) — A new soybean facility at Mitchell will pay a lower rate of interest on its loan from South Dakota state government, while an ethanol producer at Onida will have its existing state loan extended another seven years and borrow some additional money.
The South Dakota Railroad Board took those actions on Wednesday as steps to promote economic development.
The soybean operation, High Plains Processing, requested that the interest rate on a $12.6 million loan that the state board previously had approved in November now be reduced to 2%.
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The loan had been made at a rate of 2.95%. That included a 0.25% administrative charge for the state Department of Transportation, to which the Railroad Board is attached.
State Transportation Secretary Joel Jundt said on Wednesday that the administrative charge now looks unnecessary.
'To add on 0.25 percent doesn't seem prudent,' Jundt said.
High Plains originally applied through the Davison Regional Railroad Authority for a $16.1 million loan at 2% interest. The loan financed construction of 33,000 feet of track for loading rail cars. The facility is along the Burlington Northern Santa Fe Railroad line.
Other terms of the original loan — a 15-year amortization, with a balloon payment due after seven years — remain the same.
'We expect to see new businesses pop because of this. It's good for South Dakota,' Mike Lauritsen, CEO of the Mitchell Area Development Corporation (MADC) and Chamber of Commerce, told the state board.
South Dakota Soybean Processors, which has about 2,200 producer members, manages the Mitchell facility. CEO Tom Kersting thanked the state board for approving the interest-rate reduction. 'It's really going to help make this project a success,' he said.
The state board on Wednesday also reconfigured a $2.1 million loan for Ringneck Energy that was due on April 1 and loaned another $1.3 million to the Onida ethanol producer.
Kevin Kjorsvik, who's commodities manager at Ringneck, presented the plan calling for extending the loading track 2,382 feet. Currently the plant switches rail cars in strings of five. The expansion will allow strings of 25 cars.
'It's to help expand our production,' Kjorsvik told the state board. He said Ringneck would pay the approximately $50,000 of interest by April 1. The $2.1 million original loan and the new $1.3 million loan will be combined.
Those terms are 2% rate of interest, amortized over 15 years, with a balloon payment due April 1, 2032.
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