City maxes out $175,000 legal bill in Essar tax case. Must spend more

By September 6, when the City of Sault Ste. Marie's final 2016 tax bills are due, Essar Steel Algoma will owe $21.3 million in property taxes.

The city's legal efforts to collect that money are turning out to be more expensive than anticipated.

City Council will be advised on Monday that the Toronto lawyers representing the city, have already spent all of the $175,000 allocated for the case.

Councillors will be asked to approve an additional $100,000 to protect the city's interests in the complicated proceedings.

City Treasurer Shelley Schell says the lawyers made extensive, costly preparations for their cross-examination of Essar Steel Algoma.

"Another factor affecting the fees of the restructuring lawyer is review of the multitude of other motions filed, such as the ad hoc committee of lenders and the Port of Algoma, all which could have implications to the city's position," Schell said.

"In light of the dismissal of the city's motion seeking payment, it is prudent that we continue to be involved with the proceedings to secure our property lien status."

Steven Graff, Ian Aversa and Jeremy Nemer of the firm Aird & Berlis, have been handling the city's case.

Port of Algoma

In other news, councillors will also be asked Monday to extend the end date on the Port of Algoma project one year to December 31, 2017.

The decision will affect contribution agreements with FedNor and Northern Ontario Heritage Fund Corp, both of whom advised that the deadline should be extended to ensure funding is still available once uncertainty over the port is resolved through Essar Steel Algoma's insolvency proceedings.

Monday's City Council meeting will be livestreamed on SooToday.