GRAND FORKS, N.D.—For more than two years, the mayor of this city near the Minnesota border backed a Chinese company’s plans to build a $700 million corn mill on the outskirts of town, citing the prospect of new jobs, added tax revenue and another place for farmers to sell their corn. Then last week Brandon Bochenski reversed course, hours after the release of a letter from an Air Force official declaring the corn-mill project a security risk because of its proximity to the Grand Forks Air Force Base 12 miles away.

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