Ambitious plans, controversy for Sertich’s final IRRRB meeting

Magnetation 4

Magnetation is building a fourth processing plant in the Canisteo Mine formation on the western Mesabi Iron Range, but is requesting a $6.8 million IRRRB loan to finish.

Iron Range newsOn Thursday, the Iron Range Resources and Rehabilitation Board (IRRRB) will hold its final meeting of the year, and the last in which Tony Sertich will be commissioner of the board’s unique state agency funded by local Iron Range mining revenue.

The agenda is filled to the brim with everything the IRRRB has come to be known for: public works projects, ambitious initiatives with ambiguous names, political power struggles and controversial business loans. Commissioner Sertich appears to be set to go out like Gary Cooper’s sheriff in “High Noon,” or else like Butch Cassidy and the Sundance Kid, depending on how this turns out.

Setting aside the $750,000 public works agenda (by statute, half the IRRRB’s budget is dedicated to public works in the Taconite Tax Relief area), there is still plenty to chew on here.

Let’s start with the loans. The board will consider two large loans for existing Iron Range businesses facing what the agency describes as “growth challenges.”

The first is Magnetation, a scram mining operation with ambitions to further develop the iron ore body of the western Mesabi. They are asking for $6.5 million in loans to close the gap on a problem they have in finishing their Plant #4 in the Canisteo District near Bovey. On one hand, Magnetation is one of the region’s biggest new employers, hiring hundreds of operators and laborers at its Itasca County plants. On the other, they have grown so much that they are now considered viable competition to other Iron Range mines, and officials at those mines are growing tired of the extra help their new competition is getting from the IRRRB.

The second loan is a little smaller, a $1.95 million request by Mt. Iron-based Silicon Energy to build its low-cost solar energy cells. The issue here is that this project has enjoyed enormous public help since its inception, with far fewer jobs and revenue to show for it.

Both of these projects will likely spur long, heated debate by board members, who are all seated state legislators representing different parts of the region.

I’ve probably buried the lede, but the agency press release hints at something called “protecting the Dougles J. Johnson Economic Development Fund.” What I understand this to be is that the IRRRB is preparing to shield the $140 million fund, a frequent target of the state legislature during lean times, by spinning it into a private, non-profit foundation that would be governed by its own professional board. That board would allocate the annual endowment to worthy economic development efforts in the Iron Range region.

Essentially, the move would attempt to “de-politicize” the fund, by removing politicians from its direct control and access. The down side is that we don’t yet know much about how the new organization would be constituted, and it’s hard to imagine the Iron Range legislative delegation, on the whole a territorial and parochial lot, giving up their current control of the fund without some serious questions.

All that being said, the fund isn’t currently being used for much of anything. It’s the pistol in a Chekov play, a dynamic element of potential energy hanging on the wall. On a bad day, one gets the sense that it’s more important to Range leaders as a symbol of power, rather than as a tool to accomplish change. Recent history has shown that should the GOP take the House, Senate and governor’s office again, the fund would be raided almost immediately.

But doing something this big at the end of just one meeting during a leadership transition is a monumental task. Any vote changing the DJJ Fund would require unanimous support.

Other large educational projects, particularly related to school collaboration are also on the agenda, as well as rebate requests by mining companies for infrastructure projects.

It bears mentioning that Gov. Mark Dayton and his administration have been conducting interviews for successors to Sertich this week. Sertich will begin his new job leading the Duluth-based Northland Foundation on Jan. 1. It’s entirely possible that the results of Thursday’s IRRRB meeting could be quickly followed by the announcement of who will be tasked with implementing these policies. Thursday’s meeting is well worth watching.

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