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Business

Stake in Sparrows Point could be sold to local group

PropertyCompanies and CorporationsBankruptcyBethlehem SteelFinancially Distressed CompaniesInvestmentsKevin Kamenetz

The owner of the closed Sparrows Point steel mill is working on selling a "significant percentage" of its stake in the property to local buyers, raising hopes for its eventual redevelopment.

An attorney disclosed the potential sale this week in a court case involving the property, but did not identify the buyers except to call them a "local investment group."

Two people close to the deal that said the company is Hanover-based Redwood Capital Investments. They spoke on condition of anonymity because the transaction is not final.

Local entrepreneur Jim Davis' Redwood Capital bought the retirement-community company Erickson Living in 2010. Davis also founded the staffing firm Aerotek with his cousin, Baltimore Ravens owner Steve Bisciotti.

Del. John Olszewski Jr., who represents the area, said Redwood representatives talked to him about a month ago about their interest in buying the more than 3,000-acre property. He doesn't know where things stand with that effort but was happy to hear about it.

"I think there's a lot of reasons to be encouraged by the fact that there's an investment group that has both the resources and the local connections to make the necessary investments to make that ... property an employment center and a hub for growth for the future," Olszewski said.

Spokesmen for Redwood and Sparrows Point's current owner, Hilco Global, declined to comment.

Baltimore County Executive Kevin Kamenetz said Thursday that he's talked to the buyers but could not confirm the company involved because the transaction isn't a done deal.

"I am very pleased with the turn of events," he said. "I have never been as optimistic that the vision created by that Sparrows Point Partnership report will become a reality."

The county-formed partnership's report, issued a year ago, calls for Sparrows Point to be redeveloped for industrial uses. The plan particularly emphasized maritime commerce — the Maryland Port Administration has tried to buy a portion of the land — as well as advanced manufacturing, clean energy, logistics and distribution.

The Sparrows Point steel mill closed in 2012 after its owner, RG Steel, filed for bankruptcy protection. Production at the mill, long owned by Bethlehem Steel, dates to 1889.

"It was always my goal to ensure we kept it as a job-producer peninsula," Kamenetz said. "At its heyday, Bethlehem Steel had 25,000 employees. We tended to hold on to that venerable history, but when RG Steel closed, they laid off 2,000 employees. So I think this plan can bring us a little closer to Bethlehem Steel's numbers as opposed to RG Steel's."

The court filing this week also disclosed that Hilco, which had owned part of the property, agreed to buy the rest of it from Environmental Liability Transfer in the past three months. The new ownership twist came recently.

"Hilco has just agreed to an arrangement with a local investment group to sell a significant percentage of its ownership to them," said the filing from Gerard P. Martin, a Baltimore attorney for the Environmental Liability Transfer subsidiary that sold its stake in the property.

Martin said he doesn't know who the buyers are, but he called Sparrows Point "a magnificent piece of property."

"I think it may be the largest available industrial site east of the Mississippi that has rail and water access," he said. "If you were going to put manufacturing anywhere, that's where you would put it."

jhopkins@baltsun.com

twitter.com/jsmithhopkins

Copyright © 2014, The Baltimore Sun
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PropertyCompanies and CorporationsBankruptcyBethlehem SteelFinancially Distressed CompaniesInvestmentsKevin Kamenetz
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