Property tax deal for Soo steel plant
Published Monday, August 20, 2018 3:10PM EDT
Last Updated Monday, August 20, 2018 7:15PM EDT
Algoma, the steel plant in Sault Ste. Marie, went four years without paying most of its property taxes and it owes about $23-million in back taxes.
But now, a deal is in place that would see the city reclaim most of that money if a judge approves the sale the steel plant this week.
If the deal goes through, and a judge approves the sale of the steel plant and the plan to exit credit protection on Wednesday, then the city will receive over $20-million in unpaid taxes.
The city spent nearly half a million dollars in legal fees fighting for this money and those who worked on the deal say receiving 92% back in unpaid taxes is unheard of.
Al Horsman is the Chief Administrative Officer for the City of Sault Ste. Marie.
"This is certainly much better than what I know in terms of communities and municipalities we've looked at and had discussions with." said Horsman.
When the steel plant was refusing to pay all of its taxes for four years, the city had to do some financial scrambling, but didn’t want to borrow from a bank to pay the bills. This money will replenish those funds that came from the city’s reserves.
Christian Provenzano is the Mayor of the City of Sault Ste. Marie.
"The city has been borrowing from its own reserves and we are able to pay that back now, and we are able to make it whole and we have enough monies to pay that back." said Provenzano.
Nothing is official yet.
The judge could still deny the deal, but that would mean the steel plant would not exit credit protection.
If everything goes smoothly, the city could receive a cheque by the end of next month.
A judge is expected to make a decision Wednesday on the proposed sale of Sault Ste. Marie steel producer, Algoma, after hearing recommendations.
The steel plant has been working to get out of creditor protection and currently owes around $23.8-million in back municipal taxes.
If the deal goes through, Algoma will repay $21.8-million of the taxes owing.