Rural township supervisor threatens to seize Cleveland-Cliffs property over millions in unpaid taxes
MARQUETTE COUNTY, Mich. (WJMN) — Local leaders are accusing steel company Cleveland-Cliffs of refusing to pay millions of dollars in taxes related to its Empire Mine property.
Lawyers for CCI argue local governments are misinterpreting tax law. Meanwhile, two rural townships threaten to collect debts by seizing personal mine property to sell at auction.
On Tuesday, Marquette County leaders released a strongly-worded statement accusing CCI of misrepresenting the value of its mining operations in the Upper Peninsula, leading to over $50 million in unpaid taxes since 2018.
Active mines are taxed on the amount of ore taken out of the ground. Since 2018 the Empire Mine has been mostly idle, leading assessors to include in its assets the value of what CCI has said is still in the ground. Meanwhile, CCI has argued that while its operations are idled, its tax burden should still be tied to the amount of ore taken out of the ground.
Empire Mine near Palmer, MI
“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,” noted Marquette County Administrator Scott Erbisch. “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.”
Details of the dispute
The county claims the company applied for a multi-million dollar grant in 2018 to continue mining, pointing to extractable reserves still in the ground.
“However, Cliffs later told taxing officials that its public reports were untrue,” reads the county’s release. “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 [State Tax Commission] matters were pending, Cliffs informed permitting officials that they 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 State Tax Commission sided with the local governments based on information from CCI’s own filings, saying $2.9 million was owed to Richmond and Tilden Townships. Now, the county says the mine’s personal property may be seized by the townships and sold at auction to recover the unpaid taxes.
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Municipalities impacted include Marquette County and the City of Negaunee, though the local governments most affected by the alleged nonpayment are Richmond and Tilden Townships. The release from the county claims costs so far have been covered, but the nonpayment could soon affect funding for community emergency services, the courts, Veteran Affairs, and medical care facilities.
Rural communities hit the hardest
For Tilden Township alone, CCI values its taxable assets at $100,000, while tax assessors have valued it at over $14 million. Over the past seven years the deficit from unpaid taxes in Tilden and Richmond townships has stacked up to over $2.9 million, according to the county.
“If Cliffs is successful in avoiding its tax burden for the Empire Mine, the Tilden Mine may be next,” said Deborah Pellow, a former member of the Michigan’s Mining Future Committee and the current Tilden Township Clerk. “Our townships are already strained because of this tax issue. We have been picking up their slack for seven years.”
The majority of the mine sits in Richmond Township, a community of under 1,000 people.
Richmond Township Supervisor Scott Mills has held his post leading the community for nearly a decade. Mills says in his past 27 years living in the area, he hasn’t seen anything like this.
In a phone conversation Wednesday, Mills said the community has had to cut their E.M.S. services, end municipal garbage disposal, shrink township staff, all while still increasing taxes for its residents.
Mills said without intervention, the local fire department would be next on the chopping block.
County leaders say more communities are affected, with impacts felt in the county’s ability to provide 911, Veteran Affairs services, search and rescue special ops, medical care facilities, senior services, courts, jail and other services.
At the end of January, CCI announced it had made billions in profits in 2023. “After making $22 billion last year, I wouldn’t think they’d have a problem paying it,” said Mills. “If you or I had done it, we’d have been on the streets long ago.”
Cleveland-Cliffs has a long history in the Marquette area, operating in the area in some way for well over a hundred years. “When they want something from you they’re good neighbors,” said Mills. “But when they’re done with you, they crinkle you up and put you in the garbage.”
Local 3 reached out to CCI for comment but have not received a response.
A staffer at the Marquette County Administrator’s Office told us County Commissioner Joe Derocha flew to Ohio this afternoon to work with CCI executives on a possible solution. We are waiting to learn the result of the meeting.
This is a developing story. Stay up-to-date on the latest information with Local 3 on-air and online.
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