Marquette County slams steel giant amid dispute over $50M in delinquent taxes on mine

Marquette County officials are hopping on a plane to Cleveland on Wednesday, hours after issuing a blistering press release slamming North America's largest flat-rolled steel company for bilking state and local government of $50 million in taxes owed on an idled iron ore mine in Michigan's Upper Peninsula.

Cleveland-Cliffs CEO Lourenco Goncalves will meet with county officials Thursday morning to discuss the owed taxes on Empire Mine that have been the subject of nearly seven years of litigation, said Joe Derocha, chairman for the Marquette County Board of Commissioners.

Derocha said company officials from Cleveland-Cliffs, which touts itself as a leading supplier of automotive-grade steel, called to set up the meeting Tuesday night, hours after Marquette County took the unusual step of publicly chastising the steelmaker for its continued tax delinquency.

A representative for Cleveland-Cliffs did not immediately respond to a call and email seeking comment.

Marquette County said it has paid nearly $1 million in litigation expenses since 2018 trying to get Cleveland-Cliffs to pay its taxes and is fed up with the fight. The company has paid one year of taxes since 2018 — about $13 million in 2021 when it forgot to appeal that year — and owes roughly $50 million, Derocha said.

Derocha, whose grandfather and father worked at Upper Peninsula mines for decades, said Cleveland-Cliffs' litigation and refusal to pay their due amounts to "abuse of the judicial system."

"Mining raised our family," Derocha said. "And over the years I feel that Cleveland-Cliffs Iron Company has lost its community license to operate. I’d like to see that go back to the way it used to be and get back to good business.

"This type of litigation isn’t good for the county, the townships, the city or Cliffs.”

State Rep. Jenn Hill, D-Marquette, said the issue needs to be resolved soon for the financial health of the local governments, which are suffering after years of tax battles.

"I’m getting asks in Lansing for things like fire trucks and new school buildings when we have property taxes that haven’t been paid," Hill said. "It’s very concerning.”

The county issued a press release Tuesday accusing the company of making conflicting representations on the value of it's mine to state agencies — where they said there were still iron ore deposits present — and local taxing authorities — where they've presented a bleaker picture to avoid paying $50 million in real and personal property taxes.

Among the taxes that have gone unpaid are about $2.9 million owed in personal property taxes to the townships of Richmond and Tilden, which have the authority to seize personal property for the unpaid taxes.

"Our townships are already strained because of this tax issue. We have been picking up their slack for seven years," Tilden Township Clerk Deborah Pellow said in a statement.

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Cleveland-Cliffs, which idled the Empire Mine in 2016, has argued in litigation dating back to 2018 that the State Tax Commission's valuation of the mine is too high, given that the facility is idle.

But the county argues the company's attempts to keep state mining permits active serve as confirmation it intends to continue mining at the site.

Additionally, Cleveland-Cliffs as recently as 2018 told the state that ore deposits still exist in the mine and presented a 17-year plan to extract them, Derocha said. The company made the representations, the county said, when asking the Michigan Economic Development Corporation in 2018 for about $50 million in incentives to restart the mine. But the company has failed to provide the county with studies backing the claims it made to the MEDC, Derocha said.

Despite those representations to the state, Derocha said, the company later told taxing officials the facility is no longer capable of being mined for ore, and moved to have the property valued only for land and surface, not the personal property or mineral reserves.

eleblanc@detroitnews.com