As Sparrows Point demolition continues, plans for rebuilding begin

The Sparrows Point peninsula today looks post-apocalyptic, a landscape of gray and brown run through with puddles and cluttered with piles of scrap metal, giant nests of rusted rebar, abandoned trucks and other leftovers from more than century of the site's life as a steel mill.

Cranes with magnets scavenge for metals; small crews wield blowtorches, cutting apart the massive buildings that once served the Bethlehem Steel operation; hopper cars brimming with vehicle parts harvested from the grounds wait in the rail yard for shipment.


"If you closed your eyes and didn't know where you were, you would think it was an alien planet," said Jim Russell, president of the Dundalk Chamber of Commerce.

But a movie setting is not the only thing new owner Sparrows Point Terminal LLC and its partners hope visitors will see at the 3,100-acre Baltimore County property.


"When you look at this site, all you can really see is just how much opportunity you have here," said Mark Levy, managing director and Mid-Atlantic industrial practice group leader for JLL, the commercial real estate services firm hired by Sparrows Point Terminal to find new users for the site.

Sparrows Point Terminal, which purchased the property for $110 million in September, has said it wants to turn the area, which has about 2,400 developable acres, into an industrial business park, with distribution and logistics companies, a hotel and some retail to support thousands of new employees.

On Monday, the state announced it had approved the area as part of an expanded Enterprise Zone, making firms that locate there eligible for tax breaks. Engineering firm Parsons Brinckerhoff expects to complete a master plan for the site by the end of the summer.

Even as the demolition and cleanup continues, a 20-person JLL team is marketing the site globally, approaching retailers with e-commerce operations, same-day delivery firms and data centers, looking for tenants that can use the site's deep-water berths, rail and highway access. Levy said the team has about 25 serious leads and plans to launch a formal marketing campaign in September. He hopes to see the site mostly redeveloped within 10 years.

"The level of inquiry is very strong," Levy said. "We're in the situation of being strategic about that and really thinking through what the right mix of tenants is."

One new occupant was identified in December: FedEx is working with development firm Scannell Properties on a 338,000-square-foot warehouse on about 47 acres there. In May, Sparrows Point Terminal and Scannell entered into a ground lease, expected to take effect as the building nears completion or at the beginning of 2016 and last five years, with options to renew.

The Maryland Port Administration wants to build a facility to store dredge materials at Coke Point and is looking at additional acreage for a possible auto terminal. Those discussions are continuing, said Aaron Tomarchio, vice president of operations for Sparrows Point Terminal. The port administration declined to comment Monday.

The property owner also is seeking state help for the redevelopment, including toll relief for vehicles traveling between the port and Sparrows Point via Broening Highway, Levy said.


Improving Broening's interchange with Interstate 695 is Baltimore County Executive Kevin Kamenetz's top transportation priority, spokeswoman Ellen Kobler said. A truck traveling to Sparrows Point via Broening now must pay the Key Bridge toll even though it doesn't pass over the bridge.

Steelmaking operations stopped at Sparrows Point in 2012, when its last manufacturer, RG Steel, declared bankruptcy, laying off about 2,000 workers and selling the site for $72 million at bankruptcy auction to a joint venture of a Hilco Global company and Environmental Liability Transfer.

Sparrows Point Terminal, a partnership of Hilco and Hanover-based Redwood Capital Investments, took over last September, buying the land and pledging nearly $50 million toward the environmental cleanup. Redwood is an investment firm for the founders of the staffing company Allegis Group, Anne Arundel County entrepreneur Jim Davis, and his cousin, Baltimore Ravens owner Steve Bisciotti.

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Today about 300 people report to work at the site each day, many of them working with demolition contractor MCM Management Corp., Levy said.

The site's short-line railroad, which connects to CSX and Norfolk Southern tracks, remains active, mostly moving scrap materials. Sparrows Point Terminal is planning to repair the tracks and expand the rail yard's storage capacity.

The Community College of Baltimore County moved its commercial drivers license program to Sparrows Point about a month ago after a fire at its previous location. Right now, the program is based there rent-free, but CCBC President Sandra Kurtinitis said she hopes the school will have a long-term presence, offering a suite of programs related to logistics and distribution to support employers there.


"We're wanting to position the college as a key partner in the revitalization of Sparrows Point and in the revitalization of the Dundalk community and the Dundalk area," she said.

County Councilman Todd Crandell, a Dundalk Republican, said he is encouraged by the activity and communication with the community, but said people will need to be patient, given the scale of the site and environmental cleanup necessary.

"We're not going to be able to reverse 20 years of massive job loss in a short time frame," he said. "They're going through a period I think they need to go through, which is doing due diligence on what is the best use of different aspects of the property. ... We have to remember how vast the property is. … It's a huge effort."