Cutting their losses

Minnesota loses a big opportunity for investment due to an anti-business environment.

Thanks to the state’s botched management of the biggest single investment in North Carolina-based timber products mill Huber Engineered Woods’ (HEW) history, the 140-year-old company pulled the plug on plans to build a state-of-the-art plant in the north central community of Cohasset.

“It never seems to surprise me how Minnesota can snatch defeat from the jaws of victory. The $440 million Huber plant was served to them on a platter,” American Loggers Council executive director Scott Dane told the Mesabi Tribune after regulatory delays, tribal opposition and environmental extremists’ legal challenges led Huber to pull out.

Minnesota’s loss quickly turned out to be Mississippi’s gain.

“This massive investment by Huber Engineered Woods is a significant win for Mississippi and is another example of our state’s strong economy,” said Mississippi Gov. Tate Reeves. “We are proud to welcome another top manufacturer to Mississippi and are excited about the economic benefits this investment will bring.”

It wasn’t supposed to turn out this way when Huber and Gov. Tim Walz coordinated the announcement of the pivotal project in June 2021.

“We are pleased and excited to bring this new investment and set of employment opportunities to Itasca County and the surrounding areas,” said HEW president Brian Carlson. “It is our desire for our new Minnesota operations to be a shining example of our company’s commitment to building a diverse and inclusive workforce.”

The 800,000 square-foot facility meant a big lift for the regional economy, creating 150 permanent new jobs averaging $31 an hour, 300 to 400 construction jobs, and an estimated 1,500 ancillary jobs. It also guaranteed an enormous opportunity for loggers and truckers with a daily need for 150 logging trucks plus a projected 20,000 trucks and 330 rail cars to transport the finished products.

“Northeastern Minnesota’s infrastructure and transportation systems are geared to expand and support the success of Huber’s new facility in Cohasset,” said Mark Phillips, commissioner of the Iron Range Resources & Rehabilitation Board, which contributed to $60 million in state aid for the project. “Our region’s workforce is highly skilled, hardworking, and ready to help Huber Engineered Woods produce its products in Minnesota.”

The opportunity couldn’t have come at a better time or place than in Cohasset. The community of 2,700 residents faces the loss of some 170 jobs from the closure of the Boswell power plant. The economic impact of the plant’s shutdown will be devastating not only for employees and their families, but the entire region. After all, Boswell accounts for a huge portion of the area’s tax base — 13 percent in Itasca County, 69 percent in Cohasset and 19 percent for the school district.

“We are excited that Huber has chosen this site to expand their business. This will be a tremendous boost, not only to the local economy of Cohasset, but to all of Itasca County,” said Itasca County commissioner Davin Tinquist.

What’s more, Huber gets good marks for its environmental and sustainability record, as well as plowing back one percent of its operating net income into “the communities where employees live and work.”

Yet the Leech Lake Band of Ojibwe opposed the mill located a mile outside the reservation border from the start.

“The ‘Frontier Project’ [Huber plant] would repeat a tragic history of outsiders profiting at the expense of local resources,” Leech Lake Band chairman Faron Jackson, Sr. wrote in the Star Tribune. “In this case, a New Jersey family’s company wants to export Minnesota’s wealth.”

The last straw came when the Minnesota Court of Appeals sent the project back to the drawing board in February 2023 to undertake a more comprehensive environmental review. The news of Huber’s abrupt decision to abandon Minnesota spread quickly in industry publications like the Southern Loggin’ Times.

“Huber had planned to build its sixth OSB [oriented strand board] plant in Cohasset, Minn., but after experiencing constant entanglements in the process from governing authorities, including a Minnesota Court of Appeals decision that would have caused further delay in the construction of the $440 million plant, Huber opted to pull out of the project and begin looking elsewhere.”

Local elected leaders blamed the “devastating” outcome squarely on the Walz administration and its allies.

“Gov. Walz showed no real interest in trying to find a way to keep Huber here. The Leech Lake band showed no interest in coming to the table to find a solution; instead they chose a course of legal action to try to kill the project,” said Sen. Justin Eichorn, (R-Grand Rapids.)

The usually low-key Blandin Foundation based in Grand Rapids also put Walz on the spot in a letter shared with the media.

“I respectfully request your administration commission an independent after-action review of the Huber project in Cohasset, Minnesota,” wrote Blandin Foundation president and CEO Tuleah Palmer. “…Those participating in the review must represent a broad cross-section of the impacted interests to ensure a fair and comprehensive analysis.”

It will take much more than a commission to restore confidence in Minnesota as a place where companies can invest.

“Minnesota should be embarrassed and ashamed. Their actions will reverberate for decades,” says Dane. “When new forest products interests explore development, it won’t be in Minnesota.”