McAlester plant deal causes concern as deadline approaches

Monday, January 17th 2005, 6:31 am
By: News On 6

McALESTER, Okla. (AP) _ More than two years after it received nearly $700,000 in taxpayer money, a McAlester pet food plant has yet to open.

A series of delays is causing concern among those who invested public and private money in National Pet Products.

``In my 10 years on the city council, that's the only vote I regret,'' former Vice Mayor Dave Attebury said of an August 2002 decision to give the company $250,000.

Under an October 2002 agreement, the company received that amount in startup funds from the city, plus $439,560 from the Kiamichi Economic Development District of Oklahoma and $100,000 from the McAlester Foundation, a private, nonprofit endowment.

The economic development district's share was part of $2 million in ``passthrough'' money it received that year from the state Legislature, said Chester Dennis, the district's executive director.

Under the agreement, National Pet Products was to employ 25 full-time workers within two years. After three years, the company must pay the city a $10,000 penalty for each employee below that threshold.

If the project fails before Oct. 21, the foundation would take possession of the land and all assets and divide the proceeds with the city.

``I really thought the thing would be producing by now,'' foundation President Dick Dudley said. ``If they never go into production ... it's going to be a sorry mess. I don't know what to think.''

The company's majority owner, Steve Phipps, said such concerns are unnecessary. He expects the plant to make 250 tons of dog food per day, long before the penalty clause starts.

Phipps said he has invested $600,000 of his own money into the plant in the past two months.

In a March 2004 letter, Phipps said that National Pet Products employed 13 full-time workers and expected to double that number within six months. Phipps also said in the letter that he expected production to start soon.