FULTON -- One of the largest dairies in South Dakota may soon be located in largely rural Hanson County, bringing tax dollars, jobs and a multi-million-dollar investment into the area.

But if some local residents have their way, it will never happen.

Michael Crinion, an Irish-born developer who operates Global Dairy in Deuel County and is also developing Valley View Dairy, a large dairy operation in Brookings County, is attempting to build a 7,000-head dairy 15 miles from Mitchell.

He has received a state permit to pump 720,000 gallons out of the Floyd East James Aquifer daily to water his cattle and clean the barns, although that is being challenged in court.

A local group, The Concerned Citizens of Hanson County, has been fighting against the proposed mega-dairy, which would be located northeast of the small community of Fulton.

Crinion plans to build on 160 acres owned by Hugo and Darlene Iburg and has acquired an option on the land. The Iburgs and their son, Paul Iburg, may be part owners in the project.

Paul Iburg said the dairy would be a boost to Hanson County. He said Crinion would buy corn and silage for feed, and the manure the cattle would produce would be used to fertilize fields and improve crop production.

"I believe with all my heart and soul it's the right thing to do," Iburg said during an interview at his farm Wednesday.

Getting the dairy built, however, has been a long process that has slowed in recent months. Efforts started nearly five years ago, and still nothing has been constructed, partly because of the ongoing legal challenge.

The price of milk plummeted a few years ago, Iburg noted, and that was a factor in the delay. Now, The Concerned Citizens of Hanson County is fighting the dairy and has blocked construction, at least temporarily.

The Hanson County Planning and Zoning Commission unanimously approved the conditional use permit for the proposed dairy, which would be located in Jasper Township, after a three-hour hearing in August 2007.

At that meeting, Crinion said the dairy would cost up to $30 million to build, create 60 to 70 new jobs in the county and would need to purchase 4,000 acres of corn silage, 2,500 acres of hay and 450,000 bushels of corn -- about 3,700 acres -- annually.

He said a minimum of 7,000 acres of land would be needed to apply the manure, which will be injected in the soil, not spread atop the land. Crinion said his company has already procured 18,000 acres of manure easements from surrounding farmers. It is estimated the organic fertilizer will be a $280,000 benefit to area farmers.

Crinion estimated the annual economic benefit for area communities at $31 million, while paying approximately $60,000 in additional yearly property taxes, about $35,760 of which would be taxes for schools.

Hanson County Equalization Director Mary Wilcox said Crinion is in full compliance with the county and has all the permits he needs to move ahead.

The Hanson County Planning and Zoning Commission gave Crinion a conditional use permit for a concentrated animal feeding operation (CAFO) in 2007. He also obtained a variance for a Class A CAFO, which usually requires a two-mile setback from any home. His dairy was allowed a 3,000-foot setback.

Wilcox said while the county's rules state that work must begin within 180 days and be completed with two years, both Crinion and county officials knew those deadlines wouldn't be met.

"They've had extensions ... and a project of this size, we knew could not transpire in this time," she said. "The very first meeting he came, we discussed there was no way to get a project of $50 million or whatever it was off the ground. So we take the rules that we had and adjust and apply as needed."

The permits remain valid, Wilcox said.

A county building permit was issued in May of this year and it has the same timelines. But Wilcox said with the simmering dispute over the water permits, Crinion will be allowed the time needed to complete the operation.

On Friday, First Circuit Court Judge Sean O'Brien declined to issue a stay that was sought by The Concerned Citizens of Hanson County that would prevent Crinion from using his water permit, which he received after a July 13 hearing.

However, the appeal of the permit filed by the dairy opponents is still moving ahead. No matter what decision is handed down, an appeal to the state Supreme Court is possible, meaning it could be spring or summer before a final decision is reached.

Crinion still must apply to the state Department of Environment and Natural Resources for a general permit for concentrated animal feeding operations, according to DENR spokesman Kim Smith. If he plans to disturb an acre or more during construction, he will need a storm water construction general permit, Smith said.

"Sometimes both of the permit applications come in together," he said.

Opponents vow to fight on

Rob Bender, a landowner near the dairy's proposed site outside the small community of Fulton, and state Rep. Stace Nelson, R-Fulton, are leading the fight against the mega-dairy.

They argue that Crinion, the owner of Hanson County Dairy Developers, would use more water than the rest of the county combined and would expose the area to risks from pollution, heavier traffic on township and county roads, and an increase in crime and possible hikes in public assistance programs caused by immigrant workers.

"I don't have anything against confinement systems if the public is for it," Nelson said. "The overwhelming feeling I get here is they're against it.

"Hanson County is one of the best places in the world to live," he said. "If it ain't broke, why fix it?"

According to the 2010 census, 3,331 people live on the 436 square miles of Hanson County.

Nelson claims more than 400 people have signed an online petition opposing the dairy. He said as the battle has continued, opposition has grown deeper and stronger.

"Everybody in this county is for ag development, but within reason," Nelson said. "And not at the expense of their neighbors."

He said when he first heard of the proposed dairy he was in favor of it. But the more he learned, and the more he listened, that changed.

"Bottom line is, my loyalty lies with my neighbors in my community," Nelson said. "These people have made Hanson County one of the finest counties."

Nelson said he has several other concerns, including the manure lagoons being in a low area alongside Johnson Creek that flows right through the center of Fulton, a small community.

He said if a heavy rain fell, the lagoons could overflow, no matter what guarantees are given.

"We were given the same promises along the Missouri River," Nelson said. "As we saw last year, pigs were flying along the Missouri River after that flooding."

South Dakota Agriculture Secretary Walt Bones testified on Crinion's behalf at a July 13 hearing of the state water board.

Bones said concerns about the manure that will be produced on the farm are overstated.

He said it will be well handled, noting that Crinion has had no problems with it on his large Brookings County dairy. In addition, it will serve farmers well, Bones said.

"The farmers surely recognize that value," he said in an e-mail. "The Hanson County dairy would need about 10,000 acres of land to be in DENR compliance, and they had over 15,000 acres wanting those soil-enhancing nutrients."

Nelson said he is also concerned about the massive amount of water Crinion seeks to draw from the aquifer.

"The whole of Hanson County Rural Water uses 535,000 gallons a day for Hanson County and parts of McCook and Davison counties," Nelson said. "So there's a concern there."

While that number is accurate, according to Hanson County Rural Water General Manager Dan Schroeder, the water system doesn't get water from the aquifer, which is located in northern Hanson County.

"I have nothing to do with that aquifer," Schroeder said.

He said Hanson Rural Water buys its water primarily from the Bon Homme-Yankton Water District and gets some from Turner McCook Rural Water. Hanson County Rural Water has about 950 customers, Schroeder said, mostly in Hanson County, but some in Miner and Davison counties.

Bender, in a letter to the state Water Management Board, said he fears the mega-dairy's wells will lower the aquifer and reduce the water he can pump from his two wells "or have them go dry altogether."

Bones said Garland Erbele, the chief engineer for the DENR's Water Rights Program, testified at the July 13 hearing on the dairy that domestic use would have first access to water from the aquifer over commercial use.

Crinion said he doesn't feel the water he wants to pump will pose a risk.

"We plan to drill three wells from the Floyd aquifer. Two to supply water and one as a back-up," he wrote in an e-mail. "We picked the Floyd because there is a large surplus of water in it. As part of the water permit, there is a requirement that private wells have preference over a commercial operation. So if local wells were affected by the dairy water use, the dairy would have to reduce its water use until there is enough water for the private wells.

"We don't believe this will happen as the amount of water that the dairy will use in a year is approximately the same amount as four center pivots would use during the growing season."

Allegations of racism

Nelson said while the dairy would reportedly provide 50 to 70 jobs, they would pay just $8 to $9 per hour and attract transitory workers, many of whom may be illegally in the country.

Those workers may be involved in identity fraud or drug trafficking, said Nelson, a former naval investigator. He said even if they are not breaking laws, many would have little or no money to support them if they quit or were fired from the dairy. The social costs, law enforcement expenses and other issues tied to transients need to be considered, he said.

"You're talking about people who definitely would take a toll on the county," Nelson said. "If they're here illegally, they're not going to be paying taxes."

He said there are just three gas stations in Hanson County, so the workers won't be buying a lot of items and paying sales tax, unlike Huron, which has a large immigrant workforce.

"Huron has a lot of retail stores where these people are frequenting, paying sales tax," Nelson said. "Here in Hanson County, we rely on property taxes."

Hanson County Sheriff Randy Bartlett said he doesn't believe any illegal aliens live in the county now, although some certainly pass through on Interstate 90 or other roads.

Bartlett said if he stops someone and ascertains the person is an illegal alien, he will cite and then release them if they are accused of a minor offense.

"There's nothing I can do if ICE doesn't want him, and ICE doesn't look at traffic offenses," he said, referring to U.S. Immigration and Customs Enforcement.

Nelson said the dairy proponents are "playing the race card."

"That is a straw man argument," Nelson said. "That's a way to change the argument, saying people don't want them because of the color of their skin. I know these people in Hanson County. There's no finer people in the state."

His wife is a Filipina, he said, and his three youngest daughters are half-Japanese. Nelson said he has not witnessed any prejudice against his family and said his election to the Legislature proves locals are not racist.

"I 100 percent disagree with it," Nelson said of such claims. "What people are saying is they do not want the crime element coming with the illegal immigrant population. It's not about the color of people's skin."

Two county residents who were interviewed Wednesday said they are concerned about an influx of Spanish-speaking workers.

Janice Schoenfelder, of Alexandria, said she is "not comfortable" with Hispanic workers coming into such a rural area. She said the dairy may be needed, and she supports such development.

"I just think it's probably a good thing -- but not for here," Schoenfelder said. "Take it someplace else."

Liz Soladay, of Fulton, said she is opposed to the dairy for two reasons: the potential of environmental damage from a factory farm, and health-care costs tied to the workers.

"I'm extremely concerned about pollution," Soladay said. "They told us it was going to be 4,000 head and now they're saying 7,000 head. What will it be when they get here?"

She said while Crinion has said he offers health insurance, there's no guarantee all the workers will be able to afford it. If they don't have health insurance, the county could be forced to pay some big bills, Soladay said.

Iburg, whose parents own the land where the dairy would be located, said he's convinced racism is a major factor in the opposition.

"Yes, it is," he said.

He said the Hispanic people he has met through Crinion are hard workers and good people. Iburg said he would like to employ people like that.

Iburg and Nelson live just two miles away from each other, but they are far apart on the proposed dairy.

Iburg claimed Nelson threatened him during a telephone call that he reported to the sheriff's office. Sheriff Bartlett said no such report was taken.

Nelson, while admitting a heated phone exchange took place, said he didn't threaten to harm Iburg.

"That is categorically false. That is not true," Nelson said. "He and I did have a heated argument over the phone. I told him, you're d--lucky you're not in close proximity to me at this point."

Nelson said he has other concerns aside from water and the dairy workers.

The massive manure lagoons would place a great deal of bacteria in the air, he said --"let alone the smell."

Nelson is also concerned about heavy trucks and farm equipment on county and township roads

"You're talking about a big increase in the use of heavy vehicles on county roads," Nelson said. "People who have been living here for decades would like to see their roads improved."

Crinion has asked the county to consider creating a $1.1 million tax increment financing (TIF) district to harden three and a half miles of 421st Avenue leading to the dairy so the road can withstand the traffic. TIF districts capture new and increased property taxes for a period of time to pay off public improvements such as roads.

Hanson County Auditor Lisa Trabing said the county commissioners gave preliminary approval to the TIF in the spring. The next step is up to Crinion.

"If he brings us the project plan, the commissioners will make the next decision on it," Trabing said.

Nelson said the payments on the TIF would reduce the positive impact of the taxes Crinion and his partners would pay.

Nelson said he believes it would take 14 to 15 years of using the new taxes assessed on the dairy to pay off the TIF.

"That road will not last 14, 15 years," he said. "The county is going to have to improve it. Because it takes so long to be paid off, there's no guarantee that dairy will still be there."

When a TIF district ends, the full value is then added to the tax rolls. It's an increasingly popular development tool.

Trabing said while opponents of the dairy have been active and vocal, other local residents haven't made their views known.

"You know, the group of Hanson County Concerned Citizens all live around the dairy," she said. "I don't ever hear anybody from Emery about the dairy for or against it. It's the people who are around the dairy."

Bones said he is puzzled by the strong opposition to Crinion's proposed dairy.

"Agriculture is the only industry that is consistently investing in rural counties and rural areas," he said.