Pine Bluff Mayor Debe Hollingsworth and Jefferson County Judge Dutch King said Thursday that they were unaware of the Horizon Foods poultry plant in Pine Bluff shutting down operations until they read the news in Tuesday’s Commercial.
“I didn’t know anything about it,” Hollingsworth said. “It caught me by surprise. My chief concern is that about 180 people are suddenly losing their jobs, their paychecks, and there’s no telling how many others that impacts when you consider the workers’ families. I’m looking into ways in which the city might be able to help them.”
“I was stunned,” King said. “Of course, the first focus is to help those who have lost their jobs. They are the No. 1 priority, and right now they’re in limbo.”
King said he was “disappointed” that the plant, which opened 11 months ago, is struggling to survive. He said officials had “recruited” the company and believed it would have long-term success. Horizon — which processed spent laying hens for foreign markets — received a $379,000 incentive loan from the Economic Development Corp. of Jefferson County, more commonly known as the tax board. The seven-member panel, appointed by King, is charged with appropriating revenue from collections of a three-eighths cent sales tax approved by voters in 2011 and earmarked for job development.
The corporation — chaired by George Makris and also including Glen Barnes, Eugene Hunt, Scott McGeorge, Jimmy Don McKissack, Kaleybra Morehead and James “Jitters” Morgan — hired the Economic Development Alliance for Jefferson County to provide professional support.
Lou Ann Nisbett, president and chief executive officer of The Alliance, said previously that the loan to Horizon was used by the firm to aid in purchasing freezer equipment. The loan was to be erased at a rate of $1,000 per employee actually hired after five years. The Alliance has a lien on the equipment. The first installment toward satisfying the loan was recently achieved with hiring numbers.
In a Monday interview in which Horizon Vice President and chief investor Rory Botto disclosed the shutdown, he confirmed he had pleaded guilty to a federal charge of bank fraud in California in 2000. He was sentenced to 11 months in prison and five years probation, fined $7,500 and ordered to repay $367,000 to Wells Fargo Bank. Botto said he had never attempted to conceal his conviction and that officials here had been aware of his record during discussions that led to the local incentive loan.
Horizon was also able to secure $58,558 from the Arkansas Economic Development Commission for employee training, according to commission spokesman Scott Hardin.
King said Thursday that he didn’t have any knowledge of Botto’s legal troubles until they were reported Tuesday.
“I learned about it when I read it in the paper,” said the judge.
Hollingsworth had not been elected at the time of the incentive talks and said she also hadn’t known of Botto’s situation until Tuesday.
“I’m not familiar with him,” she said.
Makris said Thursday evening that the local board was not advised of Botto’s conviction and there was nothing in the incentive process that would prompt such information to be related. Makris said financial and investor facts are gathered by The Alliance and “safeguards” are in place to protect individuals’ personal information. Makris said he also learned of the plant’s closing and Botto’s past difficulties from the Tuesday reports.
The Commercial intended to ask Nisbett on Thursday if she had learned of Botto’s conviction during the process, but she was away from her office and couldn’t be reached.
Horizon is within the city’s fourth ward, which Steven Mays represents as an alderman. Mays said Wednesday that several of his constituents had been working at Horizon and kept him advised of assorted problems there. Mays said he’s “troubled” that a convicted felon can obtain local and state funds to help start a business.
Mays said he “prays” that officials will “do a better job on screening future employers.”
“I don’t want this bad situation to hamper our future job growth,” said Mays, who added that “such problems” can occur anywhere. “Pine Bluff is still a great place to work, live and raise a family.”
He said officials need to “work together” in ensuring “the quality” of potential industry and business investors in the county.
Makris said every event can be an educational opportunity and the tax board will apply its lessons learned in the Horizon endeavor to future development efforts.
A former Horizon worker who asked not to be identified said Wednesday that the company had been “dishonest with its workers” and “stealing their time by not paying us right.”
He said that despite Botto’s claims to the contrary, employees had been working only part-time “for several months” and the company has failed to pay wages “on time and not at all in some cases.” He also said that employees had had to purchase their own “personal protection equipment” necessary for work and were never reimbursed.
“We were told we would be working full-time, but we mostly worked part-time if we worked at all,” he said. “Then we have troubles getting our checks cashed because the company doesn’t have money to cover them with. This place sounded good at first. You had people who quit other jobs to come here, and look at what we got. I know that if we had known about Botto’s bank fraud, a lot of us would have just quit.”
Some former workers have already started drawing unemployment benefits, the man said. Meanwhile, he’s spoken with a local attorney about a class-action lawsuit and visited the sheriff’s office to see if it could help with check-cashing problems.
“A bunch of us have at least two checks coming,” he said. “We don’t mind working, but we want to be paid for it. There are some guys plenty mad who say they’ll turn this place out without no pay. A lot of young guys work out there and if they come out there and get upset, there could be trouble.”
Botto said Monday that negotiations are under way for a sale of the company, and he’s optimistic it will be sold and re-open within a few weeks.
“That’s what I’m hoping for,” King said. “I hope it can sell and keep on running and provide good jobs. That’s what we need.”
“I think that would be the best thing that could happen,” Hollingsworth said.
“We’re hopeful that occurs,” Makris said, “so lemonade can be made out of the lemons.”
Makris noted that the incentive agreement with the plant is transferable if the business is sold to a new company, so the loan “can still help in creating new jobs.”