Manager: Sunland shutdown impact minor

By Christina Calloway

PNT senior writer

ccalloway@pntonline.com

The financial impact that Sunland’s closing has on the city of Portales is projected to be minor, according to Portales City Manager Doug Redmond.

The nation’s largest organic peanut butter processor Sunland Inc., shut its doors last week after filing for Chapter 7 bankruptcy, leaving about 100 people out of work and Valencia peanut farmers at a standstill.

But Portales isn’t expected to be a casualty of the company’s shutdown because the projected annual gross receipt tax impact on city revenues is projected to be about a $46,000 loss.

Redmond shared the information during Tuesday night’s Portales City Council meeting.

Portales City Councilor Leo Lovett requested the estimated effects of Sunland’s closure be studied because he noted that there has been a reduction to the city’s revenue in the past few months.

Sunland closed its doors after 25 years last week when it filed for Chapter 7 bankruptcy, citing the impact of a voluntary product recall and a government-enforced plant shutdown last fall.

The company’s products were tied to a salmonella outbreak that caused 41 illnesses in 20 states.

Redmond said because Sunland was more of a manufacturer of peanut butter, little money was made in retail gross receipts from its retail store.

The small amounts of money the city will lose out on come from the water and sewer billing for Sunland as well as its gross receipts tax on electricity and natural gas, the indirect impact on retail, and the indirect impact on accommodations and restaurants gross receipts taxes.

Redmond said the largest loss the city experienced was the $150,000 it shelled out in LEDA funds, a funding source for local economic development projects, for quality control improvements.

“Those are a loss that we’ll have to take being they were given with the good intention of keeping (Sunland) going and that’s what they’re set aside for,” said Councilor Ronald Jackson.

Redmond added that if Sunland’s plants are purchased by another company, than the LEDA funds given will not be a total loss because they will still be put to use since the money was used to improve those plants.

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