Allegations raise a stink over Mower County feedlot

Feedlot barn
The Santos Group, a subsidiary of the national feedlot company Holden Farms, bought this property for $292,000 just two weeks after the local feedlot officer received state permits for it. Some residents claim the price is exorbitant and may have been a bribe.
MPR photo/Sea Stachura

In October 2006, Lowell Franzen gave notice that he wanted to build a hog feedlot. County ordinance required a public meeting to disclose project details. So, Lowell Franzen held a meeting at his house.

If you had any concerns about the proposal you could call the county feedlot officer.

His name? Lowell Franzen.

Neighbor Tim Carroll decided to call.

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"What he told me was he was going to start an operation for his son, his son was just getting into farming. And it was going to be a finishing operation," he says.

Tim Carroll
Tim Carroll lives less than a mile from the new feedlot. He says the stink will ruin his furniture and horse riding businesses.
MPR photo/Sea Stachura

A finishing feedlot fattens pigs for markets. Carroll says he and his neighbors weren't too concerned because the smell from that type of farm isn't too bad, and everybody knew the people involved. So, no one kept up with the state or county permitting process.

Then construction began, and the finishing feedlot turned out to be a sow facility for breeding piglets. It began operating late last month.

Carroll says the stink from a sow feedlot is horrible in comparison to a finishing lot.

Neighbors also learned that less than two weeks after Franzen obtained the MPCA feedlot permit, he sold the undeveloped property and the permits to Santos Group. Santos is a subsidiary of Holden Farms, one of the largest hog producers in the country.

Santos bought the property for just shy of $300,000. That's more than six times the assessed value of the property.

Tim Carroll says Franzen lied to the public about the type of facility he intended to build, and who would be involved.

"My contention is that the Santos Group paid him to use his power and authority to slip these permits through, paid him an exorbitant amount of money and basically paid him for his position," Carroll says.

"Would you consider that bribery?" MPR asks.

"Well, that's my opinion."

"My contention is that the Santos Group paid him to use his power and authority to slip these permits through... and basically paid him for his position."

Franzen isn't commenting on the matter. But agricultural appraisers and real estate agents who work in the upper Midwest told MPR an undeveloped permitted feedlot is rarely sold.

It's so rare that appraisers couldn't recall another instance in the past 20 years. So, no one can say for sure whether a feedlot permit added almost $250,000 to the land's value.

But Carroll says avoiding attention and public scrutiny may have been valuable to the company. He says if Santos Group had been involved in getting the permit, that would have piqued residents' concerns.

Lowell Franzen's lawyer Kevin Stroup says Franzen did nothing wrong. He says Franzen was clear with the MPCA that he intended to build a sow facility. It was the MPCA that granted the state permit.

"The paper trail is all very clear that it's a sow facility. The only place anybody claims it wasn't just happens to be an informational meeting, where there's no tape recorder on. And quite frankly, I don't think the testimony of these people is very credible," Stroup says.

But MPR couldn't examine state documents because the file is currently closed. The MPCA is investigating whether any statutes or rules were violated in the permitting process. If there were, that could shut down the feedlot.

Lowell Franzen did sign his own county feedlot permit, valued at $1,000. And the county issued a building permit six months before the state OK'd the project.

State Attorney General Lori Swanson sent a letter to the county, saying those two actions violate state law. She also indicated that if these permits were final county approvals of the feedlot, they had to be declared null and void. The attorney general's office will neither confirm nor deny an investigation into the matter.

A group of citizens filed suit against the county and Lowell Franzen, asking for a temporary injunction based on the improper permitting. The request was denied.

Attorney Paul Reevers represents Mower County in this case. He admits Franzen may have had a conflict of interest, in permitting himself and representing the county in the public meeting. But as far as the actual paperwork is concerned, he says everything seems to be in order.

"Does the county wish that this had been handled differently? Absolutely," Reevers says. "But at this point in time, does he comply with the requirements, yes or no? And do we think he followed the letter of the law? Absolutely."

"Do we think the spirit there may be an issue?," Reevers adds. "There may be, and that's why the county has initiated an investigation into that."

The county's investigation started in August and its findings will determine any possible criminal charges. Right now, Lowell Franzen is on paid administrative leave.