Several court cases linked to a controversial Sanderson Farms poultry processing plant site have placed substantial dents in the wallets of Nash County and the city of Wilson.

More than $1.1 million in taxpayers’ money has been spent on litigation and environmental studies between the two local government entities over two lawsuits. Sanderson Farms, based in Laurel, Miss., wants to build a second North Carolina poultry processing plant — a 180,000-square-foot facility proposed for a nearly 150-acre tract at the intersection of Interstate 95 and N.C. 97.

Nash County officials said the corridor was rezoned for industrial use to serve as an area for any large industry that wants to relocate to the region, pointing out that the land has prime access to utilities and major highways. Wilson officials — along with 34 landowners from Nash and Wilson counties — have vowed to keep the company away from the corridor, citing possible environmental damage to the protected watershed.

A Pitt County judge recently dismissed two lawsuits designed to prevent Sanderson from building. Landowners in the area and the city of Wilson have not said whether they plan to appeal.

Wilson attorney Jim Cauley said city officials have turned to specialized legal counsel and technical experts to advise the Wilson City Council on potential environmental impacts and to handle related court proceedings. To date, Wilson has spent $587,668 on this effort, he said.

That total includes approximately $314,095 to challenge the initial and the second rezonings. Those costs also include court reporters’ charges in the rezoning cases.

Cauley said Wilson officials have not paid any of the attorney fees incurred by the landowners. The rest of the city’s costs, $273,573, have been spent in connection with the environmental issues, rather than the zoning issues, Cauley said.

“Since November 2010, the city of Wilson has been working to defend its priceless water supply from adverse impacts anticipated from chicken operations,” Cauley said in a prepared statement.

Regarding the money spent on litigation, Wilson City Manager Grant Goings said in a prepared statement, “Some things are always worth fighting for, regardless of the cost. (Wilson) City Council has clearly stated that our water supply is one of them.”

The Wilson City Council last fall voted to spend as much as $1 million to pay for litigation against the proposed plant. Wilson’s litigation costs do not include amounts paid by the 34 landowners who also brought claims against Nash County.

“Wilson would like to see this issue resolved and initiated compromise discussions back in February of this year. We remain open to compromise that protects our environment,” Goings said in a prepared statement.

Nash County has spent approximately $459,406 on legal fees, trying to ward off opposition from Wilson over allegations of contract zoning. Nash financial officials said $475,000 originally was budgeted to cover the costs for litigation.

There are additional costs — $23,597 for engineering fees associated with the project’s development costs; $88,180 for collaboration with the Raleigh-based engineering firm Wooten Company on the project’s draft environmental impact statement; and $33,121 for grant application and other administrative costs. The grand total is $144,900.

In a recent interview, Nash County Manager Bob Murphy said it is a shame that Wilson and Nash County taxpayers have to spend those amounts of money for attorneys.

“The way we look at it was, we really didn’t have a choice in the matter,” Murphy said. “We were sued by the city of Wilson and other plaintiffs. ... What they challenged was our right to zone property.

“What we do know is that we have 150 acres on Highway 97 — a highway with significant capacity, located within a mile of an interchange on a major interstate that is prime industrial property. ... We think we are entirely in our rights to rezone that property for industry. We’re not going to allow the city of Wilson to control our destiny in a large area of Nash County. We have to vigorously defend our right to develop in Nash County.”

BEHIND THE SCENES

Depositions from the ongoing legal battles indicate that Nash County officials have worked since last summer to try and bring the company to the industrial corridor. Members of the Nash County Board of Commissioners, the county’s staff, officials from the city of Rocky Mount and the Carolinas Gateway Partnership all have vigorously pursued the poultry producer since last June, citing the desperate need for 1,100 jobs the plant would create for the economically distressed region.

The company would offer employees starting wages of $8.50 an hour. Workers usually are eligible to move up to an average of $11.50 an hour after six months to a year, and the company also would pay for 75 percent of health care insurance costs for its employees, Sanderson Farms officials said.

Company officials have said the proposed Nash County site is a prime location for reaching customers in the northeastern parts of the United States. A deboning plant would accommodate casual dining and food service industries in conjunction with a similar Sanderson Farms plant complex in Kinston, which opened in January.

Wilson City Council and area landowners sued Nash County in November over allegations that improper zoning tactics were applied. A second lawsuit was filed by the city of Wilson and landowners in April over claims of illegal contract zoning.

Nash County Commissioner Robbie Davis was one of the key players in trying to bring Sanderson Farms to the region, according to depositions taken by the plaintiffs’ attorneys. During a Feb. 15 deposition with Jim Rogerson, a Wilson attorney who represents the Nash and Wilson counties landowners; and Bob Hornick, a Chapel Hill attorney who represents the city of Wilson; Davis acknowledged his involvement in recruiting Sanderson Farms, adding that the industry is exactly what’s needed for this economically stressed region.

Davis also confirmed in his deposition — which lasted from 10:03 a.m. to 5:13 p.m. — that he was involved in early negotiations with landowners to acquire land that would situate a processing plant, hatchery and spray field for Sanderson Farms. All of that legwork was done while Davis still was the board’s chairman. He lost that position to Commissioner Billy Morgan in a partisan board vote on Dec. 1.

“I think one of the largest things that a commissioner is charged with is industrial recruitment,” Davis said during his deposition. “And of course, the current economic situation, the need is just so great. We’ve got an extremely high unemployment rate. We, in my opinion, are going to have a hard time holding our values on our existing properties, so we need to recruit for additional tax base.”

The state’s Employment Security Commission indicates that Edgecombe County’s unemployment rate for May was 14.4 percent. Nash County’s unemployment rate was 11.9 percent. Wilson County’s rate was 12.8 percent.

“This is an opportunity to get a very large group of jobs, as well as increase in tax base in one fell swoop,” Davis said. “There will be some minor inconveniences to the people living real close to the site. But when you weigh a minor inconvenience against the need for jobs and the building of a tax base, it’s a no-brainer to me.”

Nash County officials said that the rezoning was for future industrial purposes. Wilson officials and landowners argue the move was done to accommodate Sanderson Farms and allege that the company would cause environmental harm to local water, land and air resources.

Attorneys representing the plaintiffs said the fact that Nash County officials already have drafted inducement agreements for the company and have corresponded through emails about where the plant and hatchery should go, are grounds that contract zoning was applied.

Murphy said there were talks of inducements shortly before and after the first rezoning between Nash County, the Carolinas Gateway Partnership and Rocky Mount. Those negotiations have been at a standstill for several months mainly because Sanderson Farms has not verbally committed to the area, Murphy said.

Sanderson Farms officials announced in February they would delay building a second plant due to the escalating prices of feed grains and a tight supply of corn.

“If the company at some point says, ‘We’re committed to Nash County,’ we’ll renew those discussions,” Murphy said.

SANDERSON FARMS COMES TO TOWN

June 21, 2010, was the first time community leaders learned about Sanderson Farms wanting to bring a plant to the area. In an e-mail that day, Carolinas Gateway Partnership Vice President Krista Ikirt notified the following people that there would be a scheduled meeting with a Sanderson Farms official about the project: Davis, Murphy, Rocky Mount Mayor David Combs, then-Rocky Mount City Manager Steve Raper, Rocky Mount Water Resources director Wayne Hollowell, Nash County Planning Director Rosemary Dorsey, Carolinas Gateway Partnership Chairman Frank Harrison, Partnership CEO John Gessaman and Bobby Joyner of Appian Consulting Engineers.

Bob Billingsley, Sanderson Farms’ director of development, met with the group on June 22 at the partnership’s office, and gave a presentation about the company’s current locations, annual revenue, sales and the $100 million dollar commitment the company would make in property, equipment and building the facility if it came to Nash County.

Murphy said Nash County would be the direct provider of water, which Rocky Mount provides, and sewer, which Rocky Mount treats. Natural gas would be located at the plant site and Rocky Mount would be the direct provider.

Murphy said the plant’s water usage would come from a mixture of ground wells and Rocky Mount water, but there has been no set arrangement on the final mixture or an industrial rate for water usage.

“We just didn’t have anything in our rates to charge someone using the amount of water that we projected Sanderson to use. So, we were attempting to set up a rate structure that met their volume of use,” Murphy said. “It looks like the company will rely on wells for some amount of their water. Just depends on how much well water they use and how much they buy from us as to what the rate’s going to be. They might just fit into our rate structure.”

Company officials project the plant will use about 1.5 million gallons of water a day, an amount that is manageable, Murphy said.

“If we can’t supply 1.5 million of water a day to some business coming in, and still have some safe capacity beyond that, then we should shut down our entire economic development program,” Murphy said.

PUTTING TOGETHER THE PIECES

By July 2010, Nash County officials identified seven sites for the plant and were discussing what type of water rates could be offered by the city of Rocky Mount. via the N.C. Department of Commerce, Billingsley said he viewed six to seven sites in Nash County considered for the second proposed plant, as well as areas in Pitt and Wayne counties.

Murphy sent an e-mail on July 9 to Derek Hawkes, Nash County public utilities director and engineer, stating the proposed site for the plant was narrowed to land east of Interstate 95 belonging to Cecil and Bertine Williams. Along with water and sewer lines for the Sanderson Farms site,

Davis said he was working to identify and sell property to the company.

Davis worked alongside local real estate agent Judy Winstead, who was hired by the Carolinas Gateway Partnership, and Sam Johnson of Coastal Plain Land LLC, also hired by the partnership, to find suitable land for the Sanderson Farms site.

Davis said he accompanied Winstead once to meet with property owners, the Newton sisters, about infrastructure and the proposed use of a site at N.C. 97 and N.C. 58 for a 65,000-square-foot Sanderson Farms hatchery. On Oct. 19, Davis sent a letter to Irene Newton and her sisters further informing them that Nash County was interested in purchasing their property.

Johnson first acquired options on land Aug. 26 from property owners Lane F. Schroeder and Frederick J. Schroeder for the proposed spray field. Other option agreements were acquired from Ann R. Hobbs on Sept. 10 and from the Schroeders again on Oct. 12 and Nov. 30.

Davis said by Sept. 15, 2010, the county’s planning staff was gearing up to prepare for rezoning on the plant and hatchery sites. On Sept. 17, Coastal Plain Land entered into an option agreement with the Williams for their land for plant site. Nash County purchased the nearly 150-acre site last December for $1.2 million.

Billingsley said he had no contact with Costal Plain Land to find suitable land for the proposed project. He said he was aware that the Williams’ property was being purchased by the county, but thought it was potentially risky not knowing whether his company would come to the area.

“That site has good potential, potential for a lot of uses. And if anybody thought that site was being bought based off of an agreement that we had to come there you know, that’s not right; that’s inaccurate,” Billingsley said. “Now the fact they bought (the land) and it being a good site, long term, that site could be used for a lot of different things because of it’s infrastructure there. It’s a good area, it’s a rural area, it’s in the southern part of the county,  and its access to two good labor markets, so it would be very good.”

He said Nash and Wayne counties still are being considered for the processing plant.

Ikirt said the rezoning of the Williams’ property from rural and residential to industrial needed to happen regardless if Sanderson Farms made a  commitment. She said the corridor was ideal because of the location to I-95 and existing infrastructure, which could be extended there with job-driven grate source funds.

“It’s location, location, location,” Ikirt said. “With county property, I can’t market effectively land that is not zoned properly for industrial recruitment.”

‘WE STILL HAVE A CASE’

N.C. Superior Court Judge Russell “Rusty” Duke Jr. recently ruled that the rezoning done by Nash County was lawful and that both lawsuits should be considered moot. Attorneys in both lawsuits have received signed orders by Duke, and the plaintiffs’ attorneys have said it’s “very likely” an appeal will happen.

“The proof is all there (in the depositions),” said Cauley in an earlier interview. “It’s been understood for quite some time that Nash County officials aren’t interested in any other industry except Sanderson Farms.”

Sanderson Farms had a timeline to begin construction in March or April of this year and be in production sometime between August through October 2012. Billingsley said in his deposition that utilities to sites, property acquisition and tax refunds tied to investments were considered in a draft incentive agreement offered by Nash County and the partnership on Nov. 3, 2010, two days after the rezoning of the Williams’ property.

“To some extent, the nature of the proposed inducements and the timing of when the offer was made and all that may be important to the court’s determination on at least one of our claims,” Hornick said.

Davis said in a previous interview that if an announcement is made by Sanderson Farms, there will be a public hearing on the proposed incentives. He said regardless if the plaintiffs file for an appeal, it would not stop the company from making a commitment.

“They said they want the same thing they got in Lenoir County, and as long as we can agree to that, they will come,” Davis said. “I think it’s pretty much agreed upon that we would be able to what Lenoir County has done.” 

“In our opinion, (Sanderson Farms was) clear cut to start with, but now a judge has said they were clear cut. There’s really no basis to appeal,” Davis said.

Chapel Hill attorney T.C. Morphis, another attorney representing the city of Wilson, said even if his clients appeal there’s no guarantee that would prevent Sanderson Farms and Nash County from starting development on the new plant.

“The zoning is effective unless the Court of Appeals invalidates it,” Morphis said. “We couldn’t seek an injunction to stop them from building. ... But I think we still have a case. If the Court of Appeals agrees with us, then they could have a problem. My view is that work on the plant would have to stop. But I can’t say that for sure.”

Murphy said that county officials have every right to rezone land for economic development and that Wilson’s arguments have had no merits in court. He said the recent decisions by N.C. Superior Court Judge Russell “Rusty” Duke that Wilson be removed from both lawsuits and that contract zoning was not applied, should serve as some indication to Wilson that the legal battle is over.

“We know that in the end we’re going to win. It’s a darn shame that we have to spend all of this money,” Murphy said. “But at least we know that when we win, at some point, there’s going to be an industry siting on that land — it may or may not be Sanderson.”