Southeast Iowa could be in line for what state leaders call the largest private investment in Iowa history, and lawmakers just changed the rules to help make it happen.
On Oct. 2, Gov. Kim Reynolds signed House File 2801 at the end of a special legislative session. The bill amends the tax credit incentives in the state's Major Economic Growth Attraction program, known as MEGA.
According to the governor's office, the bill makes it possible for Mesabi Metallics, a Minnesota-based iron ore mining company, to invest $15 billion in building and running a steel manufacturing plant in Iowa. The governor's office called it "the single largest investment in American steel manufacturing in U.S. history."
KWQC reported that Mesabi is owned by India's Essar Group and was announced earlier that week by President Donald Trump as the builder of the mill in Lee County.
What changed
MEGA was created to help Iowa compete for projects with more than $1 billion in capital investment. As first written, it allowed tax incentives of up to 5% each for two businesses, for a total of 10% of qualifying investments.
Under the new law, a single business in a rural county can get up to 10% of its qualifying investment, spread evenly over 10 years and transferable. KWQC reported a rural county is defined as one with 50,000 or fewer people, and that the credit is also refundable.
On a $15 billion project, KWQC reported, that adds up to a ceiling of up to $1.5 billion in state tax credits. The final amount will depend on how much Mesabi actually invests and whether it meets the law's conditions.
According to KWQC, Mesabi won't collect any credits until the plant is operating. It must also:
- Hire at least 50% of the jobs it promised.
- Pay those workers at least 140% of the area's qualifying wage threshold.
- Repay a declining share of the credit if it sells, closes or abandons the project within 10 years, from 100% in the first year down to 10% in year 10.
"By pairing record-setting economic growth with taxpayer-first safeguards, this legislation ensures that not a single dollar in performance incentives is earned until real facilities are built and high-paying manufacturing jobs are delivered to Iowa families," House Speaker Pat Grassley said.
What's still unsettled
KWQC reported that, so far, the agreement between the state and Mesabi is only a memorandum of understanding, not a binding contract, and neither side has released it publicly. The exact location of the plant in Lee County hasn't been confirmed.
Supporters pointed to roughly 1,750 permanent jobs paying around $49 an hour, plus thousands of construction jobs during the building phase, KWQC reported. The company says it plans for the mill to be operating in 2030.
"Today's special session advances the most consequential economic development ever to come to our state," Reynolds said. "This means $15 billion flowing into our economy and thousands of high-paying, family-sustaining jobs."
Senate Majority Leader Mike Klimesh said the project brings "additional money for infrastructure, workforce training, good-paying jobs, and more investment in our communities."
Not everyone was ready to sign on. Democrats and some Iowans who testified said the Legislature moved too quickly without enough public detail, KWQC reported.
"This is a great project, perhaps," said Carol Maher. "Unfortunately, we don't know that yet. Please slow down."
Amy Moyner, executive director of Burlington's Downtown Partners group, saw it differently. "I can tell you, when small-business owners hear about the 1,700 permanent jobs and thousands of construction jobs, they hear more than just numbers," she said. "They hear the footsteps coming through the doors."
Why it matters for Contractors
If it moves forward, a $15 billion steel mill would be a once-in-a-generation project for southeast Iowa, and supporters are talking about thousands of construction jobs during the build. But for now there's only a memorandum of understanding and no confirmed site, and no general contractor has been named. Contractors in Lee County and the surrounding region should watch for a binding agreement with the state and a final site announcement. Those are the signs the project is real. In the meantime, firms that might want a piece of the site work, concrete, steel, electrical or support work would do well to get their bonding, safety records and workforce plans in order.