Another example of why processors bypass California

Hoard's Dairyman: 

Another example of why processors bypass California

Date: 
Fri, 10/18/2013

Buy land, build a plant and start processing milk, right? Ha!

by Dennis Halladay, Hoard’s Dairyman Western Editor

Every state, county and city likes to claim it is “business friendly” in hopes of attracting new companies and the economy-sustaining jobs they bring. But backing up those claims is another matter, and one should never assume that friendly means inexpensive.

Nowhere these days does business friendly talk seem to be cheaper than in California, as reflected by the number of dairy firms that have bypassed it in recent years in favor of places like Texas, Colorado, Nevada and Idaho.

The latest example comes from the city of Tulare. Although it is a friendly place, the expense that new businesses face anywhere in the state can be steep — even when the company is a cheesemaker and even though Tulare is the biggest milk-producing county in the universe.

Early this year, CaliCheese LLC said it wanted to build a $250 million cheese plant in Tulare that would process 4 million pounds of milk per day and create about 220 jobs. The city was thrilled, and its City Council soon agreed to sell the company a 60-acre site for approximately $2.1 million.

So far so good, but then came the rub. CaliCheese was told it would have to pay a one-time sewer connection fee of . . . this is not a joke . . . $7.44 million. An additional $819,000 would also be due for mitigation traffic and development impact fees.

Amazing, isn’t it? Sewer and other fees would cost four times as much as the property.

The Tulare City Council on Wednesday cut the sewer connection fee to “just” $1.34 million, but it’s another clear example of why there isn’t a list of dairy companies waiting to set up shop in the Golden State.

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The author has served large Western dairy readers for the past 36 years and manages Hoard’s WEST, a publication written specifically for Western herds. He is a graduate of Cal Poly-San Luis Obispo, majored in journalism and is known as a Western dairying specialist.

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