By ALEXANDRIA

BOURNONVILLE

Journal Staff Writer

MARQUETTE — Cleveland-Cliffs has continually failed to pay its $50 million debt in delinquent property taxes, according to a statement from the Marquette County Administrator’s Office.

The county said that $2.9 million of Cleveland-Cliffs’ debt is delinquent real and personal property taxes owed to Richmond and Tilden townships as well as real property taxes to the city of Negaunee.

“Responsible mines work to preserve goodwill among their community and neighbors, including local workers who also benefit from the services that city and township tax revenue provides,” said Marquette County Administrator Scott Erbisch in a press release. “Cleveland-Cliffs only cares about their shareholders’ interests. All we’ve asked of Cleveland-Cliffs is to be transparent and act responsibly. That means paying fair taxes like other businesses and mines in the region.

“The company has repeatedly contested orders from the Michigan State Tax Commission and refused to pay all the taxes they owe.”

This has caused financial strain in the municipalities Cliffs owes.

Public services at risk include township garbage collection, EMS services, fire protection and road maintenance. Also impacted are Marquette County services including 911, veteran affairs services, search and rescue special operations, medical care facilities, senior services, courts, jail, sheriff’s department, road patrol, health department services and public safety.

This dispute traces back to 2016 when Cliffs idled activity at the Empire Mine but kept permits active, indicating intent to continue mining.

In 2018, Cliffs sought to leverage $50 million in tax incentives from the state of Michigan and the Michigan Economic Development Corporation to reopen the Empire Mine. In seeking those incentives, Cliffs reported to state agencies that minable ore reserves exist at Empire. The corporation presented to the state of Michigan a 17-year detailed plan to extract that ore.

However, Cliffs later told taxing officials that those public reports were untrue. The company reported to state and local taxing officials that the ore is incapable of being mined. To diminish its taxes owed, Cliffs valued the mine only for its surface and land and excluded mineral reserves and personal property.

But even when Michigan STC matters were pending, Cliffs informed permitting officials that it had begun to extract ore from the idled mine. Cliffs continues to refuse disclosure of ore reserve studies that formed the basis for its $50 million tax incentive request.

The STC rejected Cliffs’ claims that the minerals were not capable of being mined. The STC’s valuation was based on Cliffs’ own filings with the MEDC, permitting agencies and its property tax report. Cliffs has refused to pay the $2.9 million in personal property taxes and their personal property is now subject to seizure.

“This tax dispute issue has gone on since 2018 — that’s long enough,” said Marquette County Board of Commissioners Chair Joe Derocha “Marquette County doesn’t make the laws; the state of Michigan set the value of (the) Empire Mine in a previous court proceeding. Our job is to fairly administrate and defend the state tax code that Cleveland-Cliffs and all other taxpayers in Marquette County are legally obligated to follow.

“This continued abuse of the judicial system by Cleveland-Cliffs and its legal team cannot continue. It’s time for a legislative fix.”

To date, the Cliffs legal battle has cost the government agencies just short of $1 million, and that number is rising.

Cleveland-Cliffs did not respond to The Mining Journal’s request for comment.

Alexandria Bournonville can be reached at 906-228-2500, ext. 506. Her email is abournonville@miningjournal.net