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State approves sale of Canton pier to private terminal operator

State officials approved the sale of a 346,000-square-foot pier in Canton to Rukert Terminals Corp., a private terminal operator with an established footprint in Baltimore shipping.

The Clinton Street Marine Terminal, as "Pier 1" and its surrounding half-acre of property are known, was deemed surplus to the needs of the Maryland Port Administration earlier this year. The pier hasn't actively handled cargo since the 1980s, but remains in use to berth ships.

The $2 million sale frees the port administration from maintenance costs at the rundown facility while keeping the valuable waterfront property tied to maritime industry, even as commercial "gentrification" in nearby Canton neighborhoods creeps ever closer, said Mike Miller, director of maritime commercial management for the port administration.

Baltimore-based Rukert Terminals already operates an adjacent pier and other facilities that specialize in handling dry bulk cargo along the industrial stretch of South Clinton Street. Officials at the fourth-generation family business did not respond to multiple requests for comment.

The sale was approved by the Maryland Board of Public Works on April 30. It has not been finalized, but "all the terms have been agreed to," Miller said.

Under the deal, Rukert will acquire the property in its current condition for $2 million and also will assume responsibility for the estimated $1.5 million demolition of Pier 2, a dilapidated, unused wooden structure in the water next to Pier 1. It also will take on the estimated $250,000 abatement of asbestos and lead at the two-story warehouse that sits atop Pier 1.

The property was appraised at $3.1 million, but that didn't take into account the demolition and abatement expenses, Miller said. The second story of the warehouse likely will have to be torn down, he said.

The port administration also will receive a 15-year right of first refusal to purchase 15 acres of Rukert's 33-plus acres in the area and right of first refusal on the pier, should the company choose to sell; a free 10-year lease on a small boat house on the property for its ship Mary Lynn, which it uses for promotional tours of the harbor; and a free five-year berthing lease at Pier 1 for the SS John W. Brown, a Liberty ship that acts as a floating museum of World War II shipping history.

Rukert also agreed to maintain the "ongoing economic impact of the jobs" created by a leasing agreement the port administration has long had with the U.S. Navy to berth U.S. Maritime Administration Ready Reserve Force ships at Pier 1.

Miller said those lease agreements have brought in about $200,000 a year for the port administration, but upkeep on the pilings and the rest of the pier's structural supports costs about $128,000 a year.

Miller estimated the deal as a "$4.6 million swing" in the port administration's favor, given the property's extensive needs and the fact that it could not be used for cargo for lack of adjacent "laydown" space.

"We looked at it more as a liability," he said.

Miller said Rukert officials expressed a desire to shore up the industrial nature of South Clinton against the trend to residential development in the area, but also see the purchase of the pier as an investment in the future of their cargo operations — especially if the Navy contracts go away.

"They would have to do some work, first of all, to get the warehouse taken care of and the pier in shape," Miller said. "But if those contracts come to full term and the MARAD vessels were to leave, then I think Rukert would look toward investing in bringing that pier into cargo service."

krector@baltsun.com

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