Lawyers for the City of Sault Ste. Marie left empty handed Wednesday after appearing before a judge making the case on why Essar Steel Algoma should have to pay $11 million that was owed to the city before the steel maker sought protection under the Companies Creditors’ Arrangement Act in November 2015.
The City is currently owed $26 million and climbing. Based on its current property assessment, the steel company’s tax debt could grow to $29 million by September of this year.
The City of Sault Ste. Marie will have to wait a little longer to see if a judge will order Essar Steel Algoma to pay its property taxes.
The court monitor reported that the steel company’s DIP lenders oppose the property tax payments arguing that Essar Steel Algoma needs cash on hand of about $30 million to keep the company operating. The company also needs funds to rebuild one of its four stoves.
Lawyers argue that Essar Steel Algoma’s assessment remains before an appeals court for taxes from 2014-2016, meaning that the $26 million owed could be reduced if the steel maker is successful in its property assessment appeal.
Lawyers for the City told the judge the community needs the tax payments to keep city services operating without the need of drastic cuts and layoffs. Another option is raising taxes for residents by a whopping 22 percent next year if the tax money isn’t paid.
The waiting game continues as Justice Frank Newbould will render his decision in writing to CAO Al Hosrman within seven to ten days.