Huber Engineered Woods pulls out of Cohasset project after court decision

COHASSET — The company behind a proposed $400 million wood factory in Cohasset has pulled out of the project, just days after a state appeals court reintroduced the prospect that the proposal could undergo a rigorous and lengthy environmental impact statement.

Huber Engineered Woods, based in Charlotte, North Carolina, will take the project to another state, the company said in a news release Thursday.

“Due to delays that jeopardize our ability to meet product demand deadlines, we will pursue development of our sixth mill in another state," Huber President Brian Carlson said in the release.

Huber planned to build an oriented strand board, or OSB, plant on 400 acres next to Minnesota Power's Boswell Energy Center in Cohasset. State and local officials heralded the project as potentially bringing in 158 much-needed jobs to the region, supporting the logging industry and helping offset the effects of Boswell going coal-free by 2035, and quickly promised millions in grants and loans for the plant.

In a news release, Cohasset Mayor Andy MacDonell said it was a "devastating day."

“We are frustrated, disappointed, and angry, but we won’t waver in our work to reshape our community. Today’s announcement makes one thing crystal clear: Cohasset cannot overcome the retirement of the Boswell plant alone. It is now more critical than ever that the governor, the Legislature and all our regional partners bring every resource they can to the table to support our community through this transition,” MacDonell said.

The city said "roadblocks" from the permitting process and environmental groups' legal challenges were to blame.

"Today really feels like a funeral in my office," Tamara Lowney, the president of the Itasca Economic Development Corp., told the News Tribune. "Saying goodbye to the biggest opportunity that our region and our northern part of the state has seen in decades."

The project is designed to help replace lost jobs and tax base as Boswell winds down or converts non-coal sources. Lowney said Boswell currently accounts for 55% of Cohasset's tax base, 29% of Itasca County's tax base and 16% of the Cohasset School District's tax base.

Lowney said the project faced a number of hurdles, including “political headwinds” and legal challenges. She expressed frustration with the state and federal environmental and permitting processes, which she described as unpredictable with unclear timelines.

"We're going to watch them go to another state and move along at a pace that we couldn't even imagine," Lowney said.

The company and its supporters sought to avoid an environmental impact statement from the start.

A facility of Huber’s size, 800,000 square feet, would typically trigger an environmental impact statement, but the Minnesota Legislature passed a law that specifically exempts the project from such a study.

Gary Meader / Duluth News Tribune

Last year, the city of Cohasset accepted a less-stringent environmental assessment worksheet for the project, deeming an environmental impact statement — a rigorous review of the project's environmental effects and an examination of alternatives that could take about a year to complete — was unnecessary.

But on Monday, the Minnesota Court of Appeals said there wasn't enough evidence to prove an environmental impact statement was unnecessary for the project. While the court did not explicitly order an environmental impact statement, it did send the issue back to the city for reconsideration and to issue a revised decision on whether such a review was needed.

Specifically, the court's decision cited the lack of evidence in two wetland-related issues: whether eliminating wetlands would trigger a mandatory environmental impact statement and whether planned wetland filling would have "significant environmental effects."

However, the court said the city's determination that the "project does not have the potential to cause significant environmental effects based on air emissions and timber harvesting" was supported by "substantial evidence in the record."

The court largely sided with the Leech Lake Band of Ojibwe, which challenged the city's decision to forgo the environmental impact statement.

The band's reservation is just 1 mile from the project's proposed location, but the band has said it was not consulted before the project's announcement in 2021.

In a news release Thursday afternoon, the Leech Lake Band said it was also disappointed that Huber had pulled out, and it wants both economic opportunities and protection of natural resources and the environment.

"In this particular case, we were deeply concerned about the potential impact of the proposed plant on the environment, the attempted shortcuts in the environmental review process and the absence of meaningful tribal consultation at the start of project. We took the necessary legal action to ensure that the Tribe's rights and interests were protected," the band said.

The Minnesota Center for Environmental Advocacy, which helped the band with its legal challenge, declined to comment.

In a statement that started with "This BS has got to end," State Sen. Justin Eichorn blamed the band for Huber's decision.

"The Leech Lake Band could have come to the table to figure out a solution, but they chose to try to kill the entire project through protracted legal action," Eichorn said. "As a result, Minnesota loses out on hundreds, if not thousands, of jobs; $450 million in direct investment; billions of dollars in long-term economic impact; and a phenomenal partner that has won international awards for sustainability. Good work, everyone."

Eichorn also blamed Gov. Tim Walz, who he said "didn't lift a finger."

However, under the Walz administration, millions of dollars in incentives had been raised for the company.

"(Walz) has encouraged all involved to follow the necessary processes and meet timelines," a Walz spokesperson said in an email to the News Tribune. "He is deeply disappointed that Huber has chosen not to bring these critical jobs to Minnesota."

In a joint statement, commissioners of three Minnesota state agencies — the Department of Iron Range Resources and Rehabilitation, Minnesota Pollution Control Agency, and Department of Employment and Economic Development — all said they were disappointed in Huber's decision to leave Minnesota.

“Huber Engineered Wood’s decision to forgo the proposed facility in Cohasset is a huge disappointment,” said Katrina Kessler, commissioner of the MPCA. “The MPCA worked closely with Huber and prioritized their project by committing significant staff resources to develop and implement the most efficient and thorough permitting timeline, including partnering with local leaders to try to resolve outstanding questions from the federal government.” 

This story was updated several times with additional quotes and information from officials and a line attributed to Lowney was clarified. The final version was published at 5:08 p.m. Feb. 9. The initial version was posted at 12:28 p.m. Feb. 9.