050129 Bill Seeks $10M For Mississippi Poultry Plant

Jackson, MS - Despite ongoing investigations into Mississippi's $54 million investment in a defunct beef processing plant, a state lawmaker said he'll introduce a bill seeking a $10 million grant or bank loan guaranty for a poultry processor.

Rep. Erik Fleming, D-Clinton, said he plans to introduce the legislation before a Monday bill deadline on behalf of C.R. Williamson, president and CEO of a company that has existed on paper for 11 years but has failed to gather funds for construction. Almost 4,000 stockholders have invested more than $3 million.

The company owns 125-undeveloped acres in Braxton, where it plans to construct a facility that would employ 150 workers at average salaries of $8.50 to $9.25 an hour. Within five years, of operation, the company projects it will hire just under 500.

Fleming said the timing is bad for Williamson's request for money to build a poultry procession plant in Braxton.

"That handicaps it a great deal," Fleming said of the proposed plant from his consitutent.

Lawmakers are seeking answers about the failed Mississippi Beef Processors, which was constructed with a $35 million state-guaranteed loan. To date, the price tab to taxpayers for the beef processing operation has grown to $54 million. The Oakland facility closed Nov. 17 after three months in operation, leaving 400 unemployed. With company president Richard N. Hall Jr. in default on the loan payments, the plant is headed toward foreclosure.

State Auditor Phil Bryant is investigating Mississippi Beef Processors and Hall. Lawmakers have asked their watchdog Joint Legislative Committee on Performance Evaluation and Expenditure Review to investigate as well.

Williamson spoke with lawmakers Tuesday, minutes after asking the state Land, Water and Timber Resources Board for re-instatement of a $2.5 million grant that it approved Aug. 1, 2002. Williamson did not accept the grant then because he said he couldn't secure a required federally guaranteed $10 million loan.

Williamson, 56, asked the board to back a $10 million loan and endorse his company's plans as a means of leveraging a bank loan.

State Agriculture and Commerce Commissioner Lester Spell Jr., co-chairman of the board, said Williamson needed to approach the Legislature about the loan because the board depends on lawmakers for funding.

"We've never done a loan guarantee like you're asking, and I don't know if we've got the authority," Spell said.

Spell told Williamson the board would contact him by letter within a week with a decision about re-extending the grant offer.

"It's amazing to me that certain folks can get what they want," Fleming said referring to Hall.

The board gave Hall a $5 million grant, and lawmakers agreed to back a loan that started off at $21 million. It also gave him $3.5 million to hire a consultant and returned his $1.5 million loan collateral so he could try to get another loan.

Rep. Steve Holland, D-Plantersville, who was instrumental in legislation setting up and funding Mississippi Beef Processors, agreed the timing's bad for Williamson's request.

"I would think it would be pretty hard to get an agricultural guarantee loan on anything agricultural until we clear Mississippi Beef up," he said.

"I don't know much about Williamson Poultry. I think it's a noble concept," Holland said.

Williamson said state intervention only seems fair since his minority status will enhance his success. The U.S. Department of Agriculture has a 5 percent minority quota for federal contracts. Because there are few minority contractors, he could lock in sales to federal agencies, such as the Department of Defense, he said.

"I'm asking for a grant. The $10 million is going to come from the legislators, that can be a guarantee or a grant for $10 million," he said.

Williamson incorporated the company in July 1993, and a board of directors was formed in October 1994. Williamson had been approved for a $10 million loan from BankAmerica's Community Development Bank, guaranteed by the USDA's office of Rural Economic and Community Development. The loan fell through for various reasons, he said.

Williamson Poultry also owns a feed mill in Mendenhall, Williamson said.

Williamson in March 2002, admitted selling shares of unregistered stock, a violation of the Mississippi Securities Act, and agreed to relinquish his status as the majority stockholder by placing 2 million shares of personal stock into the company's treasury.

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