A legacy of ‘jobs, jobs, jobs’

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Dayton delivers  State of State

Waving to his grandson in the Minnesota House gallery, Gov. Mark Dayton begins his Monday, Jan. 23, State of the State speech.

Mark Dayton has a very distinct memory of the Iron Range.

When the two-term governor was first running for the seat in 2010, he sought the endorsement of local United Steelworkers. As Dayton waited outside the union hall vote, he greeted a man leaving the restroom with handshake and personal introduction.

The man returned to the hall where the endorsement vote was taking place, and a roar of laughter soon followed.

Dayton won the endorsement, but he was curious, why was the room laughing so much? As the governor likes to tell it, the union told him that anyone willing to shake a Steelworker’s hand after they left restroom deserves their vote.

Since Dayton was elected in 2010 and took office in January 2011, his focus on the Iron Range has been jobs, like those the Steelworkers and other local unions are continually pushing to keep, protect and grow.

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Minnesota Governor Mark Dayton spoke with more than 100 local and county elected officials, school board members and business leaders during a RAMS dinner in Mountain Iron January 10, 2018.

In an interview earlier this month, reflecting on his gubernatorial career, Dayton said he’s stuck by his quest for jobs on the Range, with the lone exception of the Twin Metals copper-nickel project near Ely.

“I hope it’s jobs — jobs jobs and jobs,” Dayton said of his legacy on the Range. “That’s been my effort out here for eight years.”

That job effort has expanded beyond mining industry. The governor is quick to point out efforts in the logging and wood products sector, and a solar project he’s particularly excited about in Mountain Iron.

Last month, Heilene became the first solar panel factory to open in Minnesota and the first to open in the U.S. in 2018, investing more than $18 million to get a 25,000 square foot factory up and running after another manufacturer abandoned it last year.

Heiline was invited by the state in April 2017, operating under old equipment left by Silicon Energy. But earlier this year the state signed off on $3.5 million in loans to expand the facility and purchase state-of-the-art equipment. The Iron Range Resources and Rehabilitation Board funded half of the loan, the Department of Employment and Economic Development the other half.

“We have the highest number of jobs there and the largest U.S.-based solar manufacturer in the country,” Dayton said.

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Minnesota Governor Mark Dayton talks about the importance of the taconite industry to Minnesota during a groundbreaking for the new United Taconite Mustang Pellet Project August 11, 2016.

When Dayton arrived in St. Paul, it came after a brief political hiatus. He served one term in the U.S. Senate, followed by now-Sen. Amy Klobuchar, that ended in 2007. He announced in 2005 he would not seek re-election, claiming he was not the best person for the job.

In the 2010 election, Dayton defeated current Congressman Tom Emmer. He inherited a state ravaged by the stock market recession and housing market plunge. Former Gov. Tim Pawlenty went after millions from the IRRRB’s Doug Johnson Fund, which distributes taconite taxes to northeastern Minnesota for various economic development projects.

With the help of the Iron Range Delegation and other Democrats, that fund still exists.

In 2011, Dayton said he was on an executive council that approved more than 150,000 acres of mineral leases, which he called a focus on jobs and working with mining companies.

“We worked with the companies closely from the IRRRB and the governor’s office to work out issues with permitting,” he said. “It doesn’t get noticed but it’s very important that they know what we greatly respect, and appreciate what they’re offering in Minnesota. Building good relationships with the companies themselves and workforce — that’s very important.”

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Shifting political winds — especially on the Iron Range — have made the permitting process and Dayton’s role as governor more noticable. Not always in the most positive of light.

For more than a decade, PolyMet has tried to open the state’s first copper-nickel mine in the footprint of the LTV site in Hoyt Lakes. The project had its first environmental review sent back for another try, but has had the support of Dayton as the company checks off the list of permit applications, reviews and comment periods.

Still, Dayton largely takes the blame for the project’s delay and the praise for his support of it. He understands the impatience. The project would be a boon for the struggling East Range and the region as whole with 360 jobs, 600 indirect jobs and an estimated $515 million annual economic benefit to St. Louis County.

“Projects always take longer than we wish,” Dayton said. “It’s been too long, but it will be very exciting when it begins operation.”

On the other hand, the governor has owned his opposition to Twin Metals, a proposed underground mine just outside the Boundary Waters Canoe Area Wilderness. He supported the Obama administration withdrawing 234,000 acres of land that included the scope of the project. He also issued an executive order to deny access and leases to the company, prompting Iron Rangers to sue his office.

When the Trump administration reversed Obama’s moves, the governor chastised the president and his cabinet.

“It’s terrible that the Trump administration is putting the financial interests of the Chilean mining conglomerate, Antofagasta, ahead of protecting the Boundary Waters Canoe Area for generations of Minnesotans and other Americans,” he said at the time.

The governor said his biggest regret on the Iron Range is a project still playing out. In 2016, Essar Steel Minnesota filed for bankruptcy just hours after Dayton gave notice he would pull the project’s mineral leases on a massive taconite project in Nashwauk.

Essar was slated to generate more than 700 construction jobs and 350 permanent jobs, but stops and stalls eventually peppered the project, which in 2010 scrapped the steelmaking facility. At the time, the company was paying the state about $194,000 per year on the mineral leases, a payment plan that began in 2004.

Seven years later the project had virtually gone nowhere.

By the end of 2015, Dayton was demanding the company pay back $65.9 million in infrastructure grants to Itasca County. Essar was missing payments to contractors and vendors on the Range — totaling more than $70 million — and company officials were seeking more financing to keep it afloat.

After a missed $10 million payment in 2016, despite assurances from the India-based parent company, Essar Global, Dayton moved to pull the plug.

“I certainly regret Essar sneaking into bankruptcy and I don’t know what else we were supposed to do,” he said. “We were required to give notice.”

Mesabi Metallics is now in control of the project, but has hit its own snags, including losing a large portion of land to Cleveland-Cliffs, in what has essentially become a blood feud between the companies.

Dayton’s relationship with Cliffs has soured too after he stood with CEO Lourenco Goncalves in 2016 backing Cliffs to own the project. It didn’t happen, but the governor is still looking forward to jobs in Nashwauk with Mesabi.

“We’re working very hard to get Mesabi Metallics going and producing jobs,” Dayton said. “I will be thrilled. Those are important jobs.”

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A lunch box filled with hand written thank you notes for Governor Mark Dayton was presented to the Governor following his talk at Wednesday night's RAMS dinner in Mountain Iron.

Around the same time Essar was unraveling, the entire steel industry was in peril due to imported steel dumping.

It was cheaper than American steel and sneaking in through the ports, driving down production and profits for the companies and forcing more than half of Iron Range mines to idle.

Dayton was part of the turnaround.

Congressman Rick Nolan of Minnesota’s 8th District approached Obama Chief of Staff Denis McDonough, a native Minnesotan, about the need for targeted tariffs on steel dumpers. Along with Goncalves, Nolan helped direct a meeting with McDonough on the Iron Range.

Dayton was a part of the meeting, calling it an exciting day for the state.

McDonough reported back to Obama and the wheels were in motion for the International Trade Commission to act, which it did. In a matter of months, Cliffs turned its plants back on with a commitment to invest in the now-completed Mustang Pellet Project at United Taconite.

Others followed.

By the time the Trump administration issued broad tariffs on steel and aluminum, all the idled plants on the Iron Range when McDonough visited were in operation again.

“That really began to turn the ship from letting illegal foreign dumping to continue unchallenged,” he recalled. “We stood up and prevented that. Nolan and others really persuaded the chief of staff that this is an urgent situation. We were all involved in persuading him that the administration had to act.”

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