Miami-Dade County

Investors want to bring Miami a steel mill, thanks in part to President Trump

The Trump administration is moving toward imposing tariffs on steel, in an effort to boost domestic production while hurting foreign manufacturers like this maker of steel rods in the Tangshan, Hebei province, China.
The Trump administration is moving toward imposing tariffs on steel, in an effort to boost domestic production while hurting foreign manufacturers like this maker of steel rods in the Tangshan, Hebei province, China. Getty Images

A local investment group wants to build a modernized $240 million steel mill complex in Homestead, claiming the Miami construction industry can support the facility at a time when President Donald Trump is pushing for a revival in heavy manufacturing across the country.

The proposal for an "eco-friendly steel mill" on county land from a group with ties to the family of Miami-Dade's mayor cites a 2017 presidential memo calling for the use of U.S.-made steel in pipeline projects. It was released the same day Trump endorsed the controversial Keystone Pipeline project that was opposed by the Obama administration.

"The last two decades have seen a steady decline in U.S. steel production," reads the May 2017 proposal from Ecosteel USA to Miami-Dade County's contracting department. "However, recent political pressure coupled with urgent need to revitalize the country's aging infrastructure system, have resulted in renewed calls for the production of U.S. steel."

The Ecosteel facility would be part of a trend in the steel industry to shift from large ore-burning steel mills into smaller factories that recycle scrap metal into raw steel.

Julio Gimenez, a son of Mayor Carlos Gimenez and a longtime construction executive, is helping pitch the Ecosteel project, attending at least one meeting with Dennis Moss, the county commissioner whose district includes the proposed mill site. Tania G. Cruz a lawyer and the wife of the mayor's other son, was also representing the venture last year but said this week her work stopped after the proposal went to the county.

The mayor issued a memo last year recusing himself from county talks with Ecosteel, a decision that formally gives Commission Chairman Esteban "Steve" Bovo authority to reject the proposal or recommend it to fellow commissioners. The Gimenez administration continued the talks with Ecosteel. Last week, the mayor issued another memo restating his recusal and saying one of his deputy mayors, Jack Osterholt, would serve as Bovo's contact for the administration on the proposal.

The proposal represents the latest ambitious, well-connected effort to bring commerce to the expanse of county-owned land outside the Homestead Air Reserve Base. Trump himself tried to build a movie studio there in 2012, and county leaders have been trying for years to make it the home of a North American version of the Paris Air Show.

Ecosteel brings the novel prospect of a tropical steel mill, along with a venture that meshes with a new effort by Washington to impose tariffs on foreign commodities and boost industrial production at home. Traditional production also is a significant generator of carbon emissions, which contributes to global warming. That has environmentalists in Miami already skeptical about Ecosteel's claims of serving as "a national model for environmentally-sound manufacturing."

"A lot of companies try to say they're green, that they're environmentally friendly," said Elizabeth Bonnell, chair of the Miami chapter of the Sierra Club. "Later on, people are left to have to clean up after the mistakes of the company. We're pretty concerned."

Gustavo Lopez, a veteran of the steel industry and scrap operations in the Miami area, declined to provide details about the environmental claims in the proposal. But he said the facility would utilize electric furnaces and the reuse of emissions from steel production to keep the pollution output well below federal standards.

"My system can be nearby your house and you will not hear anything, and you will not see anything coming out of the stack," he said during a phone interview. "Just a little bit of white vapors from water, that's all."

Part of Ecosteel's environmental claims stems from fuel saved in the Miami economy by creating a local source of new steel. The proposal submitted to the county says most South Florida building projects have their steel rebar, beams and other supplies shipped in from Jacksonville and Alabama. "In addition to polluting our air," reads the proposal, "the voyage causes daily damage to an overly-burdened infrastructure system."

Ecosteel also would rely on recycling scrap steel into new products, rather than smelting steel out of iron ore the way steel mills in places like Pittsburgh came to be emblems of smoke-belching factories and widespread air pollution.

"It's not one of the steels mills where you have the stacks and smoke," said Moss, the commissioner who is part of the Gimenez administration's negotiations with Ecosteel. "It's an environmentally sensitive steel mill."

The project is part of a long-running effort by Lopez and partners to open a steel-production mill in the Miami area. Lopez, whose biography said he owned and operated two steel mills in South America, filed for county permits in 2010 to open a "steel plant" in Medley. It described a process similar to what's laid out in the 2017 county proposal: using an electric furnace to melt scrap steel into billets, which could then be made into construction products like rebar.

"We've been trying to build a steel mill in Florida," said Mark Jolly, a veteran of the scrap industry in Miami who is part of the Ecosteel venture. "It's not easy."

Philip Bell, the head of a trade group whose members include steel mills that would compete with Ecosteel, emphasized the challenges facing a start-up steel producer.

"Any time the market gets good, all of a sudden all of these projects start coming out of nowhere," said Bell, president of the Steel Manufacturers Association. "It takes a lot of money to build a steel mill. It's very capital intensive."

Still, he said small mills rely on lower transportation costs to service the regional construction industry and Miami has one of the most attractive markets available. "There's always been rumors of a South Florida steel mill, to be honest," he said. "You've got one of the best construction markets in the nation right now."

Jolly and Lopez both said they weren't eager to discuss the project, citing concerns that would-be competitors could cause them problems. "The information I have is a little bit sensitive," Lopez said. The Miami Herald obtained a copy of the proposal sent to the county, but the official document remains confidential. Moss said he was awaiting permission from the county's legal department to release it.

County emails suggest the talks with Ecosteel are already far along. An internal map of hundreds of acres of county land outside the Homestead Air Reserve Base has one parcel tentatively reserved for the Ecosteel project. The map, circulated in an April 4 email by Leland Salomon, the county's economic-development director, includes the notation "Steel Mill 50-60 acres." in the area where Ecosteel wants to build its facility.

The email described projects being "considered," with Salomon saying the talks weren't so far along that the land couldn't be considered for other uses. The email was sent as part of a discussion about finding county land where Florida Power and Light could install solar panels for Miami-Dade.

At roughly the same time as Salomon's email, Osterholt, the deputy mayor, released a memo describing the Ecosteel project as one of three that responded to a spring 2017 solicitation for development proposals for 250 acres of county land outside the air base. One project wants to create a center for auto auctions there, and another would build a commercial food distribution facility for Cheney Brothers. The memo suggests there is enough acreage for all three projects. Osterholt did not respond to an interview request.

Osterholt's memo said Ecosteel seeks 124 acres for an industrial park that would include the steel mill, employing 1,800 people full-time at the mill alone. A modular housing factory run by Blasco Construction has agreed to open there, too. The Ecosteel facility said it expects to produce about 1,000 tons of steel a day, and would include a rebar mill.

Ecosteel's proposal to the county says the project would create about 2,000 full- and part-time jobs and would generate about $5 million a year in property taxes. It doesn't lay out how it would compensate Miami-Dade for the county land, but describes a "P3" relationship in the development — shorthand for a "public-private partnership" that typically involves a government teaming with a for-profit company on a project.

The Ecosteel proposal claims "only one new steel mill has been developed in the United States in the past four decades," but Bell and another industry expert said smaller regional mills using the kind of electric furnace Ecosteel proposes have been opening fairly steadily over the last two decades.

"These things are popping up all over the place," said Frank Giarratani, a professor of economics at the University of Pittsburgh who focuses on the steel industry. Bell said "micro mills" have become popular enough in the United States that speculative investment can be a risk. Talk of new steel tariffs in Washington are bound to accelerate the interest.

The proposal does not list either of the Gimenez relatives as members of the six-person Ecosteel USA LLC team. Neither is registered to lobby in the county, though Julio is registered as a principal of Ecosteel. Moss said Julio Gimenez attended at least one meeting in his district office about the project. In his May 24, 2017 recusal memo, Gimenez wrote he became aware that day of the involvement of his son and daughter-in-law in the solicitation of proposals for the county land outside the air base.

It's the second potential county project under way involving Julio Gimenez. In January, the mayor issued another recusal memo involving a possible project related to the county's juvenile Boot Camp detention program being pursued by Julio Gimenez and the Neighbors and Neighbors Association, a nonprofit already involved in multiple county social services programs. Moss said Neighbors and Neighbors director Leroy Jones attended the meeting about Ecosteel in his district office that Julio Gimenez attended.

Julio Gimenez said in a text message Thursday that Neighbors and Neighbors would provide job-training programs for the steel mill through the county's Employ Miami-Dade program. That's an initiative launched in 2014 by the mayor, who tapped the non-profit to administer it. Julio Gimenez said he would be a partner in the Ecosteel facility if the venture goes forward.

Cruz declined to comment beyond: "My role in the project was limited to preparing the response [to the county's request for interest in the land]. My participation ceased shortly after its submittal."

The mayor has had to declare certain projects officially off-limits in the past due to the participation of his two sons. That included Trump's pursuit in 2014 and 2015 of the county's Crandon golf course at a time when Gimenez's other son, lobbyist and lawyer C.J. Gimenez, was his local lobbyist. Gimenez formally recused himself after the talks became public and after he and Trump exchanged letters about a potential management agreement.

To move forward, Ecosteel would ultimately need approval by the 13-member County Commission. Lopez, who signed the May 2017 proposal to the county, said he has other options.

"I'm working to get land and state support in three states," he said. "If I don't get the land in Miami-Dade, then I'll just quit. I'll go to another state."

This post was updated to elaborate on Julio Gimenez’s role with Ecosteel and his registration status in Miami-Dade County’s records of lobbyists and who they are representing.

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