County approves term sheet with Mesabi

LEE COUNTY – The Lee County Board of Supervisors put their stamp on an incentive package that was discussed last week to spur construction on a $15 billion steel plant in Lee County.
The board approved the term sheet with a unanimous 5-0 vote in what Supervisor Chuck Holmes called an anticlimactic event, with the officials from Mesabi Metallics on hand, as well as Lee County Economic Development Group President Emily Benjamin and staff.
The incentive package is a 20-year deal that includes a host community piece, a $112 million initial taxable valuation, a 20-year TIF piece and a 20-Year Payment In Lieu Of Taxes (PILOT) program.
All told, the program could generate close to $100 million for county taxing agencies over the 20-year period if the project does eventually come to the county.
Mesabi Chief Development Officer Charles Sutton thanked the board and LCEDG for the negotiations.
“I would say a quick thank you to Emily and to all the staff at Lee County (Economic Development Group) and the supervisors as well for the ongoing work with them. We appreciate the dialogue and discussion as we work through this and look forward to taking next steps towards a development agreement,” Sutton said.
Sutton declined to address media questions following the passage of the term sheet citing time constraints. Mesabi President Joe Broking declined to answer questions from the media following the community forum held on Nov. 4 at Quality Inn & Suites in Fort Madison. He did however speak at the forum for about 20 minutes addressing the project and stayed around after to meet with stakeholders.
In a release on Wednesday, Broking called it a generational investment.
“This is a generational investment in Iowa, and this week’s vote moves it forward,” said Joe Broking, CEO of Mesabi Metallics. “Paired with our nearly $3 billion investment in Minnesota, this project creates a fully integrated American steel supply chain—iron ore mined and processed in Minnesota, high-quality steel made in Iowa. “We thank the Lee County Board of Supervisors for bringing us one step closer to thousands of good-paying jobs, a stronger American manufacturing base and a critical new source of domestic steel."
Holmes said he was happy with agreement and the amount of work that has gone into it.
“I’m very comfortable supporting this as I understand the very best law firm dealing with large improvements in the state of Iowa has worked with Lee County and the company for the last year and half bringing this term agreement to a conclusion. So I’m happy with it,” he said.
Following the vote Holmes quipped it about the quick vote.

“That’s almost anticlimactic,” he said to laughs from the room. “Working on this the past year and half and in two minutes were done.”
State Sen Jeff Reichman (R-Montrose) ushered a $1.36 billion incentive package through the Iowa Senate in October. State Rep. Blaine Watkins (R-Donnellson) helped move the bill through the state House. The state package was signed into law Oct. 3 combining the state’s MEGA program into one incentive package. The program was designed for two projects a year. But under the incentive package the Iowa legislature voted to approve the move to incentivize Mesabi to build in Iowa.
The project is still not completely viable as several hurdles are still in the way, including state contracts, financing, permitting, land acquisition, and utility commitments including natural gas improvements to the area.
The agreement with the county also puts the cost of infrastructure improvements on the company which could include potential state and federal grants, but not Lee County funds.
Next steps would also include Mesabi submitting a formal application to the Iowa Economic Development Authority.
Lee County Chair Ginger Knisley said she believes a development agreement with the county on the project could be coming in the next few weeks, but she has no definitive timeline on that.
“It’s my understanding the next step is a development agreement between us and Mesabi. Their agreement with IEDA is completely separate from us, but they have to do that as well,” she said.
“We needed to accept the term sheet to allow them to move on with the next step with IEDA. It could be in the next week or two that we get that development agreement.”
The County held the community forum last week to get input from the public, but since that time Knisley said things have been “eerily quiet.”
“It’s been very quiet. Personally, I got an email from one individual in the last week and no phone calls,” she said.
“My personal belief is that there’s a certain percentage of the population that doesn’t believe this is going to happen, and a certain group that believes they don’t have any control. In my mind those are the reasons why.”
The facility, when and if built, would Support more than 6,000 construction jobsEmploy at least 1,750 full-time workers once fully operational; generate an estimated $95 billion in total economic output during construction and the first 10 years of full operations; create a fully domestic mine-to-mill supply chain, linking Minnesota iron ore with modern DRI and EAF steelmaking in Iowa.