Supervisors cagey on steel plant talks

DILIGENCE

Discussions are happening and they are robust, and I believe due diligence is being done by everyone, and it just takes some time for something of this size and scope.”

Garry Seyb, Lee County Supervisor

LEE COUNTY – Despite not signing any non-disclosure agreements with Mesabi Metallics, two Lee County Supervisors are stepping lightly with information about discussions with the company looking at bringing a $15 billion steel facility to the area.
Lee County Supervisors Garry Seyb, Jr. and Denise Fraise both said they had not signed an NDA, but are part of ongoing discussions with the company, Lee County Economic Development Group, and the county's law firm BrownWinick of Des Moines.
However, both were cagey in their responses to Supervisor Chuck Holmes' request for more information on the negotiations, which Seyb described as “ongoing” and “robust’, and Fraise described as close on many issues, but still lots to do.
“We’re closer than we’ve ever been on numbers, but there’s still a lot of things,” she said.
Seyb said the discussions haven’t gone away.
“We look forward to working with them in the area if we can get them,” he said.
Holmes said he knows nothing more than the general public.
Seyb said all the same timelines apply with the group, including a 60-day exclusivity agreement with the state which would expire on Dec. 1. The incentive package was approved on Oct. 2. But no contracts are currently in place. If that window closes without an application on file with the state, the project's future changes substantially for Iowa and Lee County.
According to the IEDA, Mesabi must first file a formal application with the state. Second, the department and the company must negotiate and finalize an actual contract. Third, the IEDA board must approve that final deal.
“That just limits Mesabi to looking in the state of Iowa. But there has not been, to my knowledge, anything from the company that Lee County is it,” he said. “Discussions are happening and they are robust, and I believe due diligence is being done by everyone, and it just takes some time for something of this size and scope.”
“Why is it that the supervisors cannot be told anything about this," Holmes asked.
Seyb said it’s similar to the state level where economic development was working on it at the state level before it got to legislators and the public for comment and voting.
“Once something was worked out that could be put in front of the legislature, they did that and it was voted on,” Seyb said.
“Now it’s at the county level at the Lee County Economic Development Group, a small group, that is working through issues and things with them and, once that group has something to put in front of the full board and the public, everyone will be able to see that and know everything that’s going on with it. And they will have time to comment on it. But until you get to that point, there’s really nothing to put in front of the board.”
He said nothing can be decided at the economic development level and eventually it will have to come to the public for discussion.
Holmes asked why LCEDG couldn’t provide information to other supervisors on an update basis. Fraise said that office will when they have something specific to share.
Holmes pushed, asking how Congresswoman Mariannette Miller-Meeks can say this is coming to Lee County when no one else is saying that.
“Does Mariannette Miller-Meeks know more about this than we do,” he asked. “She’s saying in her advertising that she brought Mesabi to Lee County Iowa as part of her campaign so what does she know that we don’t,” Holmes asked.
Seyb said Holmes would have to ask the Congresswoman about that.  Fraise said Miller-Meeks wouldn’t know what is happening at the local level. Supervisor Tim Wondra said Mesabi is negotiating with Lee County so somebody brought them to Iowa.
Fraise said that’s why the county hired BrownWinick, to help the county negotiate with Mesabi officials. Holmes said he was unaware the county had hired an attorney for the negotiations. The county brought on BrownWinick to help them through potential ordinances and other large impact projects within the county.
Mesabi Metallics, a Minnesota company owned by the India-based Essar Group, is considering building in Lee County and would feed it from its own iron ore operations on Minnesota’s Iron Range.
Mesabi was offered $1.4 billion in benchmarked incentives by the state. Those incentives are amortized over 10 years and are triggered by employment and development thresholds.
Essar is the sponsor of the Mesabi project. Pen City Current received through a Freedom of Information request, a redacted copy of a slide presentation provided to Iowa Economic Development Authority that outlines the historic tax incentives Iowa has passed that helped attract the project to the state.
Those included lowering the corporate tax rate from 9.8% to 7.1% with an ultimate target of 5.5%; reduced personal income tax rates to a flat 3.8% in 2025, eliminated retirement income tax in 2023 and inheritance tax in 2025; created capital gains exemption for employees with stock acquired by employment; and created an anticipated cumulative tax savings of $25 billion from 2020-2030, according to the slide presentation.
The presentation also outlined some of the permanent full-time employment benchmarks that Mesabi must meet before incentives are triggered, including 50 or higher by 2028, 150 by 2029, 400 by 2030 and 625 by 2031. Mesabi is estimating the facility will hire more than 1,700 full time employees making more than 140% of the laborshed wage of $38.63, estimating that to be $48/hour.
Iowa DOT is estimating $221 million in roadway and bridge improvements along Hwy. 61 as part of their 5-year plan. Under Iowa’s RISE program, there could be $24.5 million in new investment for necessary local road improvements, and $20 million in interchange and access point infrastructure.
The state would also offer some railroad loan and grant program funding for rail spur construction; funds through the Traffic Safety Improvement Program for qualifying improvements; engineer funding assistance; and river port infrastructure funding to improve the safety, efficiency, and/or reliability of the movement of goods into, out of, around, and within a port.
The slide presentation showed a significant savings in having a mill in Iowa compared to building the facility in Kentucky or Arkansas, two other states that entered into the mix as Iowa was putting together its incentive program.
Iowa’s cost for rail over 20 years was $5.3 billion compared to Kentucky’s $6.5 billion and Arkansas’ $8.2 billion in 2026 dollars. Those figures adjusted for inflation were $8.7 billion in Iowa compared to $10.8 billion in Kentucky and $13.4 billion in Arkansas.
Barge numbers were similar in comparison with $1.3 billion over 20 years in Iowa; $2.6 billion in Kentucky and $3.1 billion in Arkansas in 2026 dollars. Those inflated figures were $2.2 billion in Iowa, $4.3 billion in Kentucky and $5.1 billion in Arkansas.
According to information out of the MEGA program at IEDA, Essar would bring 300,000 dekatherms per day to southeast Iowa. A dekatherm is a unit of measurement used in the energy industry to measure the volume or heating value of natural gas consumed or produced over a 24-hour period. The area currently requires 200,00 Dth/Day and they will need to find investment for the additional $100,000 Dth/Day.
IAAP currently used 30,000 Dth/Day, Koch Fertilizer uses 25,000, Alliant uses 45,000 and Roquette uses 12,000. The area has lost at least four other projects that were listed generically in the report, due to lack of natural gas in the area.
According to a preliminary economic impact assessment done by Mesabi in September, the project will generate total annualized state and local revenues of $228 million; create 7,041 jobs including construction phases; generate $5.59 of incremental tax revenues for every public dollar invested in the program; and create a total annual GDP of $4.8 billion.