Jobs, Optimism Begin Return To Postville

Postville city leaders, residents and business owners agree the community's economy has hit bottom. What isn't clear is how fast and how far the recovery will go.

Jobs, optimism return to Postville after raid
By JOHN MOLSEED • Waterloo-Cedar Falls Courier

POSTVILLE - Postville city leaders, residents and business owners agree the community's economy has hit bottom. What isn't clear is how fast and how far the recovery will go.

An immigration raid in May 2008 shut down kosher meat processing plant Agriprocessors, the town's largest employer. The loss of jobs, was followed by an exodus of residents and steep decline in revenue in the Northeast Iowa community.

 

More than 100 of the Postville's 632 residential homes were put up for tax sale by the Allamakee County Treasurer's office in June. "For Sale" signs are still a common sight. Property tax and utility fee income has plummeted, straining the city's budget and empty storefronts line Greene Street. The closure propelled the unemployment rate in Allamakee County to around 10 percent. It remained 9.3 percent in September, according to Iowa Workforce Development.

Trevor Seiberts, owner of a construction company, laundromat, and dozens of rental properties has had to work harder just to stay afloat.

"I'm in enough businesses, and I have enough people around me that I've been able to keep up my mortgages," Seiberts said.

The grocery store portion of Sabor Latino, a Mexican store and restaurant, sits dark.

"It's slow, but it's still trying to survive," said Juan Pagaza, a Sabor Latino employee.

Some signs are emerging that the Postville economy is beginning to rebound. Of the 103 properties sold on tax sale for delinquent taxes, 70 have had their back taxes have already been paid off by their new owners, said Lori Hessey, Allamakee Treasurer.

The new owners of the meat packing plant, now called Agri Star, have started poultry processing and promise to begin beef production in December, Allamakee County Economic Development officials said.

Many small business owners, pushed to the brink, are holding on until a ramp up in production injects jobs and revenue into the town.

"If the other sections (of the plant) open, we'll have more business around here," said Pagaza.

The plant can also be a draw for other related businesses, said Steve Brustkern, executive director of the Black Hawk Development Corporation.

"In Postville's case, they have a gorilla to help jump start things," he said. The corporation has leads on potential businesses that either are considering locating or starting up in the Postville area that are in a related sector to the kosher processing plant, Brustkern said. He declined to provide more details about the opportunities.

The upbeat outlook is tempered, especially in the Jewish community where business leaders there are even more so dependant on the kosher plant.

"It's an optimism that's infused with 'we've heard that before,'" said Meir Simchal, who runs a kosher grocery store. He said his business' survival is contingent on the plant thriving and supporting the Jewish community in Postville.

"Part of the draw here is that the plant subsidized an oasis of Jewish living," he said.

The effect of the plant's temporary closure is also a reminder of the dangers of relying on one industry.

Other large mainstays in Postville, including Norplex-Micarta, an international laminates manufacturer headquartered in Postville, and distributor Hall Robert's Son Inc., have weathered the economic storm.

The Agri Star plant will likely not employ as many people as Agriprocessors did. Agriprocessors had more than 1,000 employees. Agri Star has more than 350 employees. Another approximately 150 people will be hired when beef production begins, said Rachelle Howe, Allamakee County economic development executive director. "You're not putting all your eggs in one basket," she said.

"It's very difficult to become diversified in a rural community," said Wendy Mihm-Herold, executive director of Upper Explorerland Planning Commission. The commission is based in Postville and is working with city leaders, business owners and property owners to secure grants, loans and other funding for improvement projects. The corporation helped the city draft grant applications for home renovations and homebuyers.

City leaders say they expect the grant assistance to help up to eight home buyers repair and renovate their homes and up to another eight families in homes repair and renovate their current house.

The city had teamed up with Agriprocessors in housing ownership - an enterprise that left the city with unpaid bills. Agri Star has expressed no interest in such a venture, Howe said.

"That's a mistake the city is not going to make twice," she said.

Agri Star's fortune's may be out of the city's hands in the end, but trying to make Postville a community in which people want to live is something city leaders say they can do more to control.

"It doesn't mean Postville can't become a bedroom community for other areas," said Darcy Radloff.

Seiberts said the housing market decline, the recession and Agriprocessor's woes created a perfect storm that hit Postville. An excess of rental housing compounded the problem, he said. The city's effort to rehabilitate existing homes and encourage higher home ownership could help offset another downturn, he said. Renters don't have equity in the homes they live in and rarely have interest no incentives to improve the properties where they live.

"You have to attract young couples to buy some of these houses," he said, adding the city and economic leaders, including banks, need to help sweeten the deal for first-time buyers.

"The best way to attract people to Postville is to make it much more attractive than anywhere else," he said.

With a year-and-a-half of negative attention, developers admit that is an uphill battle. The Postville Chamber of Commerce is working on ways to market the city.

"People were uneducated and assumed a lot of things about the community," Howe said.
Like the economy, it can only get better from here.

Comments

[yidandahalf]

An oasis of Jewish living with Sholem as the sultan. Postville could become a bedroom community...make Postville more attractive than anywhere else...Postville has a gorilla to help jump start things. Had enough?

[Yochanan Lavie]

I wish Postville a speedy recovery. My prayers and best wishes go with that.

[krewz]

have you ever been there?

[yidandahalf]

I have nothing but compassion and good will for and toward the Postville folks who have suffered at the hands of the Rubash-ins. I would very much like to visit there.

[Yochanan Lavie]

I am of the same mind on this as yid & 1/2.

[yidandahalf]

Rubash-in has not made the 'front page' of Vin, instead the "Hot Dog King" has coverage. This is terrible. What does it mean?

[reuven sabel]

i do not believe that things will remain so good in postville. i believe that hershy freidman will get a heksher tzedek for his slaughterhouse in postville and will do everything 115% legally as required to get a heksher tzedek including paying all employees 115% of minimum wage.
but i also believe that hershy friedman will lose money from doing this and will eventually either go out of business or use this business as a tax shelter for the purpose of equalizing his losses in this business with his profits in his other businesses in order so that he should have to pay less taxes on his other businesses and in order to show that anybody who has a heksher tzedek looses money in business. unfortunately most honest businessmen lose money in business.

[state of disgust]

krewz:
I have spent a lot of time in Postville and know it well.

[krewz]

state,
my question was directed at Yidandahalf.

from his comments it seems that he's never been there

[Hometown Postville]

Perhaps Postville could become a Hassidic tourist mecca after the SMR Museum is built ($50 admission for the SMR defense fund)

[TheTruthAsItIs]

I know Postville well.

It will take years for it to rebound.

But, I think, eventually it will.

All it really needs, I think, is one more, legitimate medium sized business that pays decent wages to its workers.

City leaders are smart( and correct) not to trust Agri-Star. They are heading down the same path as the Rubashkins ( how can you not when you have so many of them and their cronies still working there? I still say there is a connection there - there has to be. It is the only thing that makes sense. One wouldnt keep the Rubashkins around because they have proven they have infallable business skills.)

Postville would be wise to diversify ( or at least attempt it) Like the article said, that is hard to do in a rural setting. But perhaps something in wind or greeen energy or some other manufacturing concern.

It will take time, but they will get there. And frankly, I think the less they put any stock in Agri-Star ( aka 'WeReallyAreTheRubashkinsInDisguise' - I suppose that name wouldn't have fit on the water tower though)

The better off the town will be overall.
The Town wont have to worry about the old trick Old Man Rubashkin or Sholom/Heshy used to pull : "Let us get away with what we want around here or we will pack up this plant and move somewhere else"

The Town always used to have that hammer over its head. That is another mistake I hope the city leaders wont allow to happen again.

[Chabadnik Attorney]

"An immigration raid in May 2008 shut down kosher meat processing plant Agriprocessors, the town's largest employer. The loss of jobs, was followed by an exodus of residents and steep decline in revenue in the Northeast Iowa community."

The shut down of the plant was bad for the town. The plant was the town's largest employer.

The comments that the town is better off without Agri don't follow the facts.

[reuven sabel]

the lesson of postville is that if you enforce laws too strictly you create an economic disaster.
if the government wants to collect as much taxes as possible, the government should not do anything that would put anybody out of business even in the name of law enforcement.
this just goes to show what a stupid idiot president bush was. the only thing that i liked about bush was that he was a republican instead of a democrat.
this goes to show that only G-d's law is perfect and man's law is not perfect.

[reuven sabel]

if sucessful businessmen pay only half as much taxes as they are required by law to pay, the government collects a lot more taxes that they collect after they put the tax cheats out of business.

[sage]

+++ I know Postville well.

It will take years for it to rebound.

But, I think, eventually it will.

All it really needs, I think, is one more, legitimate medium sized business that pays decent wages to its workers.

Posted by: TheTruthAsItIs | November 08, 2009 at 05:55 PM +++

This is crucial for Postville having a postive future.

Unless HF continues to invest his personal funds to keep Agr-Star afloat, it will, as other bloggers have noted, fail.

On another note, the presence of the Chabad folks in Postville, is extremely detrimental to Postville's future.

Stated simply, a community that believes that Gentiles are to be treated with contempt, has no place in a City with strong Mid-Western values that stress respect for all.

[AGRI-vated Angel]

[the lesson of postville is that if you enforce laws too strictly you create an economic disaster.]

The truth is . . .

The laws should have been enforced strictly, l-o-n-g before they were.

. . . and the lesson of Postville is-the Postville community should NOT have been sold piece by piece to one family, without financial limitation at the banks.

There really should be a crosscheck (like a national/international data base) of loan activity, to eliminate this type of fraudulence.

[sage]

Yes !!!!

All the more reason to create (conditions/incentives) for the Chabad community to "Pack It Up And Move It On".

[krewz]

"On another note, the presence of the Chabad folks in Postville, is extremely detrimental to Postville's future."

How?

[sage]

How?

Do an objective study of the disastrous effect that this community had on Postville for the past twenty years, and you will get your answer.