Hemp farmer and city accept repayment of LB840 loan | Policy






Mark Johnson of Western Farms, LLC., addresses Scottsbluff City Council January 21, 2020. The council approved a request for LB 840 for Western Farms, which is now to be repaid after the business closes.


Star-Herald file photo


Western Farms LLC will have to repay part of a loan it received from the City of Scottsbluff’s LB840 committee after the hemp farm closed.

Western Farms LLC entered into an economic development assistance agreement with the city on January 21, 2020, with a maximum principal amount set at $500,000. Western Farms requested $434,000 for its hemp seed operation, down from an initial request of $1.8 million.

With the company’s operations completed, the matter was brought before City Council on Monday, May 16.

Starr Lehl, the city’s director of economic development, told council that the LB840 Citizen Advisory Committee met on May 3 to review the loans. The Western Farms loan was non-compliant, Lehl said.

“The Citizens’ Advisory Committee for LB840 has reviewed this agreement and is now referring it to the board,” Lehl said.

A proposed loan modification agreement was accepted by Western Farms chairman Arthur Hoehn and had to be approved by the board. The terms of the amendment require the defunct business to repay the balance. The original agreement included a clause to offset part of the loan with job credits of up to $75,000 per year for the next three years by creating at least 17 jobs.

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Council member Nathan Green asked how much of the loan had been cancelled. Green was one of two council members who objected to the initial request for LB840 funds in January 2020.

After applying employment credits of $5,400 under the agreement with the EDA, the amount due for the first installment is $140,516.87, which is due June 1, according to information presented to the board. The remaining balance – just over $145,000 – must be paid by December 15 to repay the promissory note balance totaling $291,180.05.

“Our lawyers do a great job on these contracts and they cover us very well,” Lehl said.

The board approved the change.

The Star-Herald had not yet received comment from Western Farms at the time of publication.

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