The Iron Range’s Highway 53 paradox

imagesIt’s rare to see an issue unify people of different political persuasions, but perhaps even rarer for the reason to be abject bafflement.

So it goes for the not-so-small matter of the Highway 53 relocation project on Minnesota’s Mesabi Iron Range. As we learned late in 2014, the state department of transportation has selected a preferred route which involves building a $220 million bridge over the Rochleau Pit near Virginia.

About $90 million for the project is set to come from the 2017 bonding bill, though it’s likely that there will be some push to bond for the project early because of the tightening timeline.

What timeline?

If you haven’t followed this, the state is on the hook to relocate the highway because of a 196os agreement between the state and the owners of the mineral rights on the land where they built the current highway. It’s a 50-year-promise the state hoped not to have to fulfill. But United Taconite, co-owned and operated by Cliffs Natural Resources, needs to mine the land now to remain viable. Essentially, your money or your mine.

Buying out the mineral rights would be more expensive. Locals say putting the highway on flat land off the iron formation would be too disruptive to Eveleth and Virginia’s development patterns. So, it’s a bridge then.

But, oh my, such money. It would be the highest bridge in Minnesota, taller than Duluth’s iconic John Blatnik bridge (AKA: the “high bridge”). At $220 million, this could be the biggest public project our region sees in a generation or two.

U.S. Sen. Amy Klobuchar was on the Iron Range last week and vowed to fight for federal funds to complete the bridge and relocation project. She made reference to some kind of scheme to get the money from off-shore businesses in this Mesabi Daily News story, but truth is she and her DFL colleagues, Sen. Al Franken and Rep. Rick Nolan, will have the unenviable task of securing nine figures from a Republican House and Senate. I’m not entirely sure how they do that.

A libertarian engineer friend of mine said to me last week that in the time we’ve been talking about this they could’ve filled in the Rochleau Pit with the mine dump next to it.

That’s not pretty, but to be fair, neither is this situation.

For conservatives, building something this expensive to replace something we already have must seem outrageous.

For liberals, that $220 million would do a lot of good for priorities that help people more directly than a highway for a mine.

And that gets me to the other thing. Cliffs stock opened at about $7 a share this morning, lower than it was during the Great Recession. Though the new CEO of Cliffs promises a good year ahead, all practical indications are for a rough pair of years for the whole industry in 2015 and 2016 — times of lower demand and resulting industry consolidation. Companies are bracing for impact so they’re ready for more profitable times on the other side of this correction.

Moving the highway is presumed to be something we’re doing for “the long run.” But what does that even mean in this industry’s current ultra-efficient modeling? And if that were true, why are we still building stuff on the iron formation? (The new highway is still on top of future reserves). I ask that rhetorically, because only economic diversification will allow us to make decisions without an economic gun to our heads.

Look for leaders of both parties to balk at the highway plan. I’d honestly put the chances of this bridge being built as described at 50/50. That’s a guess, but so is speculation on future mining. Just ask the people who built the highway over the iron formation 50 years ago.

Comments

  1. joe musich says:

    So what will the trade offs be to get this bridge ? A pass for Duluth Metals ? What would be the cost to move the threatened parts of the towns ? I do not live up there anymore but hey how many people will be served by this monstrosity? How do age demographics fit into the picture ? The ore as been there awhile. What is the problem with waiting ? There does not seem to be a good solution other than preventing the mining. I would not want to be a homeowner or a business living under this. Once again the little guy is going to get screwd. Can’t ya see it coming!

  2. Tammy Swedberglund says:

    This at a time when key , long-arterial bridges are (almost) falling down statewide ( see recent Strib bit ) . Anabolism is powered by catabolism , and it’s a shame economic rationalization dictates that ore pricing in the current high dollar environment would seem to favor imports , thus precluding any new domestic investment in the vertically integrated ground-to-beam space . Definitely not shameful is Klobuchar’s adroit display of populist flex in calling for infrastructure funding to derive from offshore accounts . Try trotting out that tired “redistributionist ” shtick and the best you’ll get is that this is a user fee which US-domiciled firms ( and individuals, but hey, they’re firms too) need to account and expense for . But do dole pork wisely , as the one true grail rides the light (green-er) rail .

  3. Tammy Swedberglund says:

    Precluding thus . Darn .

  4. I have a solution that will cost only a billion or two – a couple of detour signs directing traffic to the Highway #7. Catering to Menard’s and Target so they can get a little tourist business from the highway is going to cost $220B, likely more, if past experience is any indicator. Is there anybody up there who really thinks this is going to be worth it?

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