Editorial by the Plain Talk Last July, Gov. Mike Rounds recommended that South Dakota allocate $7.5 million in financing to Hematech, LLC to assist in the planning for and construction of a $15 million headquarters building.
Hematech intends to build a highly sophisticated biotechnology campus in Sioux Falls and additional animal production facilities around the state.
The $7.5 million financial package includes a $500,000 Future Fund grant, a $2,000,000 REDI Fund loan and a $5 million taxable bond through the Economic Development Financial Authority, a state wide issuer of industrial development bonds.
No doubt some people looked at this deal with a jaundiced eye. After all, taxpayer money is involved.
But it's difficult to argue with this proposal. This project is the type of high-tech industry that we need to so badly introduce to our state.
In June 1998, Hematech was founded in Massachusetts to research, develop and produce human polyclonal antibodies, which are the disease-fighting particles in cells.
Although the antibodies that Hematech cultivates are fully human, cattle are used to produce them. The cattle produce human antibodies because they have been created using a novel method of chromatin transfer.
"This is exactly the type of economic development we are looking for," Rounds said last summer. "It allows us to capitalize on so many of our strengths in South Dakota, including agriculture, medicine, business and education. Additionally, it promises to bring together academic research and corporate worlds."
Fast forward to the present. At least two of the revenue sources mentioned in the Hematech financial package have also been considered in recent weeks in an attempt to lure, of all things, the Minnesota Vikings.
South Dakota and Sioux Falls community and government leaders have been working to put together plans to utilize Howard Wood Field and new proposed facilities to construct a training camp for the Vikings in our largest city.
It's an expensive undertaking. Initially, it looked like it could cost about $7.5 million, and Rounds wanted to use South Dakota Future Fund money as part of the financial package.
He initially offered $250,000 a year for up to four years for the operation of the training camp using Future Fund money. He also made available a $3.5 million state REDI fund loan to the Sioux Falls Development Foundation. Later, the total package was cut to $6.3 million, apparently obviating the need for Future Fund dollars.
All of this caught our eye because the Board of Regents was in Vermillion last week. A topic of discussion was the rather miserable amount of money allocated to South Dakota's public universities for research and development.
We're being outpaced in R&D by North Dakota, Montana, Iowa, Nebraska, Minnesota, Wyoming and Idaho.
We realize there is no quick fix to this problem. But the Future Fund, which was established under the Mickelson administration, was intended to promote research and economic development and over the years, there have been numerous examples of funds being directed to university projects.
The fund's present unobligated balance is about $7.8 million, and those dollars come from businesses in South Dakota that pay a fee as part of the unemployment fund tax.
The Future Fund dovetails nicely with the impact that Hematech is having in our state.
Hematech is hiring Ph.Ds, graduate students, lab technicians and other professionals with advanced degrees, according to Rounds.
Hematech has also worked closely with South Dakota State University, The University of South Dakota, and medical facilities in South Dakota. The company is utilizing the Animal Disease Research and Diagnostic lab at SDSU, and is giving students real world experiences.
We're glad the state's Future Fund was removed from the Vikings training camp bargaining table.
Should the football team accept the deal (a long shot at best) it would no doubt have an economic impact in the Sioux Falls area. It most likely would give a favorable boost to the hospitality industry in that city, and we all would benefit from the extra sales tax revenue that would be generated.
But at a time when we're scraping the bottom as far as research funding goes, we need to be careful how we spend every dollar.
A proposal like the Hematech deal makes great sense.
Allocating funds initially earmarked for research on facilities for a professional football team?
Such dollars should be spent more wisely.