A company that changed its mind about building a steel plant on the Iron Range has agreed to give back incentive payments it accepted from the state.
Essar Steel Minnesota has agreed to a plan to repay the $66 million, Gov. Mark Dayton announced Thursday.
Dayton had laid out the terms of the plan on Dec. 23 in what he called a "final offer" and gave Essar a Dec. 30 deadline to respond. The India-based company did so late Wednesday, Dayton says.
Under the agreement, Essar will pay the state $10 million by the end of March. In 2017 the company will begin a series of 16 quarterly payments through the end of 2020.
What's being repaid?
Minnesota provided Essar with $66 million in incentive payments in 2008 to help the company with its plan to build a Nashwauk plant that would turn iron into steel. It would have been the first such plant in the state, the Star Tribune says.
The project stalled, though, and Essar eventually scaled it back to a more traditional taconite plant.
The company says that $1.9 billion plant is on track to open in the second quarter of 2016 and will ramp up to full production in the third quarter.
But the absence of a steel plant led to calls from the State Capitol for Essar to pay back the $66 million.
Negotiations between the company and the state came to a head when Dayton went public with his ultimatum.
This fall Essar also missed payments to contractors building the taconite plant. But the company said in December it was making back payments to vendors and working with an international bank on getting fresh financing.