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Sparrows Point owner, government reach cleanup agreement

The Baltimore Sun

Hopes for redevelopment of the former Sparrows Point steel mill in Baltimore County — and the promise of new jobs — took two giant strides forward Thursday as the land was sold to a new owner who also reached agreement with state and federal environmental agencies on a cleanup plan for the polluted site.

The massive former Bethlehem Steel facility was shuttered two years ago and auctioned off in a bankruptcy-law proceeding to salvage companies.

The land has now been sold for an undisclosed amount to Sparrows Point Terminal, an offshoot of the Hanover-based investment firm Redwood Capital Investments LLC. Under terms of an agreement announced Thursday with the U.S. Environmental Protection Agency and the Maryland Department of the Environment, Redwood Capital will commit $48 million to clean up the property's land and groundwater, and pay $3 million to the EPA to investigate issues in the water surrounding Sparrows Point.

In a statement, Gov. Martin O'Malley called the cleanup pact "a crucial step toward making this site an economic force and a source of jobs for years to come."

"You've got a company with sufficient assets to put their money where their mouth is," Baltimore County Executive Kevin Kamenetz said of Redwood, a company that bills itself as a capital management firm for "a small group of private investors in Baltimore."

Redwood Capital plans to develop a "transportation, manufacturing and logistics industrial campus" on Sparrows Point's 3,100 acres of land. The firm is associated with local entrepreneur Jim Davis, who founded the staffing firm Aerotek with his cousin, Baltimore Ravens owner Steve Bisciotti. Redwood Capital bought the retirement-community company Erickson Living in 2010.

Officials of the newly formed Sparrows Point Terminal declined requests for comment about plans for the site. But chief operating officer Michael Pedone said in a statement that Sparrows Point "has the potential to be one of the largest ports on the East Coast and a hub of economic activity."

At a news conference at the property, Kamenetz said he believes the new owners will abide by long-term county goals for Sparrows Point that call for industrial use and the creation of a park or memorial to acknowledge the property's industrial history. The plant once employed tens of thousands of workers, made steel for California's Golden Gate Bridge and produced Liberty Ships during World War II.

With more than 3,000 acres of land with industrial zoning, deep-water access, a railroad line and the Baltimore Beltway nearby, Sparrows Point can become an industrial showpiece for Baltimore County, Kamenetz said,

"We have something very special here," he said.

The port of Baltimore has expressed interest in using the property's Coke Point area for storing material dredged from shipping channels. The property also could be used for storing "roll on/roll off" cargo, Kamenetz said.

Sparrows Point is best known as the home of Bethlehem Steel, which began producing steel at the site in 1889. After a series of ownership changes, the mill closed for good in 2012 when its then-owner, RG Steel, filed for bankruptcy. At the time, the steel mill employed 2,000 workers.

The property was bought out of bankruptcy later that year by a joint venture between Hilco Global, a Chicago liquidation company, and Environmental Liability Transfer, a St. Louis development company. Hilco Global later acquired the entire property.

Gary C. Epstein, chief marketing officer for Hilco Global, declined to comment on details of the sale, but said his company was "pleased to have played such an important role in helping facilitate the revitalization of such a historic site.

"We're certain that it's a new beginning for the site," he said.

State and federal agencies and the various owners of Sparrows Point have worked on environmental issues over the years, including dumping of industrial sludge, improper handling of hazardous materials and an unlicensed scrap tire operation. During the mill operations, neighbors of the plant complained of kish — an airborne grit and dust composed of graphite, iron oxides and other steelmaking ingredients.

The new agreement will put the property on a "final path" to cleanup and redevelopment, said Horacio Tablada, chief of the MDE's Land Management Administration.

More than a century of steelmaking — much of it before modern environmental laws — sent a number of contaminants into the ground that must be investigated, Tablada said. Officials already know of contaminants such as benzene, cadmium, zinc and polycyclic aromatic hydrocarbons.

Sparrows Point Terminal must investigate all potential contaminants and propose cleanup solutions, Tablada said. The proposed cleanups will be presented at public meetings, he said.

Sparrows Point Terminal will also pay up to $100,000 annually to the MDE to cover the expense of employees reviewing and monitoring the work. There will be penalties if the company fails to meet the requirements of the agreement.

Tablada said there is no deadline for Sparrows Point Terminal to clean up the property. Similar sites have taken five to 10 years, he said.

"There's a lot of incentive for the new owners to develop that site as quick as they can. … It all depends on what they find and how quickly they move," Tablada said.

Alison Prost, Maryland executive director of the Chesapeake Bay Foundation, said her group would keep an eye on the cleanup process. The foundation was involved in litigation over cleaning up the site, but the case was resolved earlier this year with an understanding that the off-site contamination issues in the water would be addressed.

In a statement, Prost said the state has promised that Redwood Capital will clean up the property, even if the cost tops the $48 million that's being set aside.

"CBF will closely monitor the clean-up plan to ensure this result," she said.

Already, about half of the buildings on the property, totaling 10 million square feet, have been torn down, and demolition is expected to continue for another 24 months.

In May, several workers were injured inside the former cold mill building when it collapsed as a crew of asbestos-removal workers was operating equipment.

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