HENDRICKS, Minn. – Mayor Jay Nelson hoisted a pair of six-packs from the local microbrewery and explained the civic renaissance taking place across his town. Lively shops line Main Street, soon to be joined by the first new movie theater in Lincoln County in 42 years. The local hospital is getting a $5 million expansion, and 17 new homes were built in 2014.

Nelson traces this decade of progress to the town's painstaking and expensive campaign to clean up Lake Hendricks, the centerpiece of this eclectic community in southwestern Minnesota. "There's a circle of life that takes place in our town, and everything revolves around the quality of our lake water," the mayor said. "We've made tremendous strides."

For now, though, the good news is on hold.

Nelson and other leaders of this old Norwegian settlement say their efforts are now threatened by a giant 4,000-cow dairy farm proposed just across the border in South Dakota, on top of the area's highest hill.

They say the operation will produce as much sewage as a city of 657,000 people and operate with less regulation than any similarly sized feedlot in Minnesota. The waste will be held in lagoons situated just 600 feet from Deer Creek, which flows directly into Lake Hendricks, just 4 miles away. And while the owner plans to inject the effluent into surrounding cropland as fertilizer, similar livestock confinement operations in South Dakota have experienced spills and field runoff capable of polluting rivers and lakes.

In November, the Hendricks City Council filed a lawsuit against Brookings County, S.D., to stop the $30 million to $50 million corporate farm. They say the threat to Minnesota border towns will only grow ­— a function of South Dakota's laissez-faire approach to pollution control and its intensified recruitment of agribusinesses onto lands that drain into the North Star state.

"It's not a matter of if a problem comes up, it's a matter of when," said Chuck Nygaard, who owns a farm equipment repair business in Hendricks.

South Dakota officials declined to comment on the lawsuit but say they want to make their state attractive for new business, while protecting water with regulations that meet all the applicable federal water-quality laws. Still, they say they can't remember ever having been sued by civic groups from a neighboring state over border pollution disputes.

Green algae

Lake Hendricks has long been polluted by too much phosphorus, a chemical in commercial fertilizer and animal waste, according to a 2009 report by the Minnesota Pollution Control Agency (PCA). Some of the contamination has come from farm runoff during heavy rains, the report said. The excess nutrients have fueled unwanted plant and algae growth that has turned the lake green and putrid-smelling for long stretches during summer.

Nelson said weeds in the lake were so thick during the height of the pollution in the 1990s that steel fishing lures wouldn't always sink. At times, schools of fish would die in midsummer because there wasn't enough oxygen in the water.

But the mayor and several members of the lake association said cleanup efforts that started more than 20 years ago have started to pay off, a trend that was confirmed in the 2009 PCA report. The clarity gains are fragile, the leaders of Hendricks say, because the 1,500-acre lake is only 12 feet deep and remains green with algae around its edges.

The fight for cleaner water in Lake Hendricks started with area farmers converting to lake-friendly land uses on thousands of acres around the lake. They planted 22 miles of buffer strips and other vegetation designed to stop runoff of sediment and nutrients. Together with sewage and stormwater improvements by lake cabin owners and by the surrounding wastewater districts, the cleanup has cost more than $5 million, Nelson said.

In one recent project, 22 property owners on the South Dakota side of Lake Hendricks and 44 homeowners on the Minnesota side each invested an average of $12,000 in septic improvements, including hookups to the Hendricks city sewer district. Another $1.5 million has been spent on environmental testing and research, the mayor said.

"Our town's major concern is that we've spent millions to clean up our lake, and it's an unfinished job," Nelson said. "Any runoff from this dairy would end up in Lake Hendricks."

Scant public notice

Nygaard and Nelson said the people of Hendricks might not be so alarmed except that the zoning committee for Brookings County quickly took the project through the approval process Oct. 7 with scant public notice. South Dakota resident Bradley Olsen, who lives next door to the proposed site, said he knew nothing of the project until a few hours before the vote. Nelson said his first notice arrived less than two days before the meeting. For the plant to be built and operated, it also needs state permits related to pollution control and groundwater usage.

Robert Hill, director of development in Brookings County, declined to comment because of the litigation.

Kent Woodmansey, feedlot permit administrator for the South Dakota Department of Environment and Natural Resources, said legal challenges to stop development of confined animal feeding operations (CAFOs) in South Dakota are not new. But Woodmansey said this is the first time to his knowledge where a civic group from outside the state has taken legal action to halt one.

Nelson said Minnesota state agency officials have discussed the proposed project with South Dakota officials, but so far the city stands alone in its fight to stop it.

The conflict has implications beyond Hendricks, Nelson said, because South Dakota Gov. Dennis Daugaard is on a recruitment drive to lure additional mega-dairies to the Interstate 29 corridor. Nelson said hundreds of those sites are located in watersheds that drain into Minnesota and the Minnesota River. Lake Hendricks, for example, is in the headwaters of the Lac qui Parle River basin, which flows into the Minnesota River and on to the Mississippi and Lake Pepin.

Nathan Sanderson, Daugaard's director of policy and operations, said the proposed dairy CAFO near Hendricks would be a step to help the state double its milking herd from 100,000 to 200,000 head. But even then, in-state milk production will just begin to meet the demands of growing processing operations in the state, he said.

"We have a number of dairy processors, and they all want to expand," Sanderson said.

In Brookings, 20 miles west of the Minnesota border, subsidies helped build a massive production plant for Bel Brands USA, makers of individually wrapped mini Babybel cheese. The owners opened the plant in July, hoping to employ 250 people while processing 500,000 pounds of milk a day. Sanderson said about half a dozen new dairy CAFOs, each with herds of at least 2,500 cows, have opened, are under construction or have been permitted for construction since Daugaard took office in 2011.

He said Daugaard has made three consecutive recruiting trips to an annual trade expo in California's largest dairy county, where he touts the state's abundance of water, ease of permitting, high milk prices for producers, affordable land and preselected sites served adequately by roads and electricity.

"We have an approach in South Dakota where we are open for business," Sanderson said. "We're not attempting to hinder business in any way."

Previous spills

Nelson said South Dakota's laissez-faire approach amounts to less regulation and monitoring. "It's just commonly known that South Dakota isn't out there checking," he said. "They do follow up on [pollution] complaints, but then it's too late."

In 2009, a massive South Dakota dairy operation about 45 miles northwest of Ortonville, Minn., was blamed by leaders of that town for a plume of liquefied manure that made its way down the Little Minnesota River and into Big Stone Lake. Woodmansey said the state's investigation did not trace the spill to the dairy, but inspectors cited the operators for overfilling holding ponds with manure.

Two months ago, a dairy operation in Elkton, S.D., reported to Woodmansey's office that it spilled 12,000 to 15,000 gallons of manure that leaked from a broken hose. According to an e-mail Nelson received from Woodmansey, the sewage flowed into a nearby dugout and was later pumped back into the CAFO's holding pond.

Woodmansey didn't comment on whether Minnesota has tougher pollution controls than South Dakota. He said South Dakota addresses water pollution control issues at large livestock operations under a state-issued general permit that has been recognized by the U.S. Environmental Protection Agency "in the past" for its excellence. He acknowledged the general permit was last changed in 2003 and needs updating, possibly next year.

Kris Sigford, water quality program director for the Minnesota Center for Environmental Advocacy, said the people of Hendricks are right to question how South Dakota will protect their watershed.

"Minnesota has more water quality protections," Sigford said.

For one thing, she said, Minnesota requires feedlots to spread manure over more acres when it is time to inject the slurry into cropland as fertilizer.

In Hendricks, Nelson said, one of the major fears is that too much manure will be applied to the surrounding land. If misapplied, rain could wash puddles of sewage down the area's steep slopes and into the lake.

"There's tremendous cause for concern," Nelson said.

Tony Kennedy • 612-673-4213