Real Estate

FedEx confirmed as first Sparrows Point tenant

A new 300,000-square-foot warehouse being built for FedEx Ground on the Sparrows Point peninsula is the first step in the area's revival as an engine of the Baltimore economy, officials said Wednesday.

The distribution center, which is already under construction, is expected to open in 2017 with about 150 FedEx employees. It is to be located on about 50 acres in the northwest portion of the massive site, which once housed the Bethlehem Steel mill, a longtime source of jobs for the region.


Word of FedEx as a tenant first surfacedin 2014. It is the first new project at the 3,100-acre property, which owner and developer Tradepoint Atlantic is hoping to redevelop into a logistics center with about 15 million square feet of industrial and retail space, including a potential hotel, grocery store or day care.

Tradepoint Atlantic CEO Michael Moore said he knows it will take a lot to restore the area, where Bethlehem Steel employed more than 30,000 people at the plant's peak in the 1950s. But he and others at the firm said they hope it will be the first of many tenant announcements to come.


"While the demands of a 21st-century economy changed the outlook for the former mill, they only served to open a new chapter in the Point's history," Moore said. "Today the wheels are officially set in motion."

Pacorini Metals, which provides warehousing and logistics services to the metals industry, is leasing space at an existing warehouse on the site, Tradepoint Atlantic officials said. Pacorini officials did not respond to a request for comment Wednesday, and Tradepoint Atlantic officials declined to comment further, citing client privacy.

Tradepoint also is in talks with other prospective tenants.

"FedEx will surely spur a chain of global companies setting up operations here and setting into motion the economic impact Tradepoint Atlantic will have on the entire region," Moore said.

About a dozen members of the Operating Engineers Local 37 are working on construction of the FedEx building — a small number that many hope to see grow, said union president Robert Holsey, who attended an event to celebrate the lease at the Tradepoint Atlantic offices on Wednesday.

"We're hoping to be a part of the reconstruction," he said. "Look at it — this is everything they say it is. It's a premier site. It definitely has a lot of opportunity."

Tradepoint Atlantic, a partnership of Redwood Capital Investments and Hilco Real Estate LLC, purchased the property in 2014. The firm has been creating a master plan for its 2,400 developable acres, dismantling the former steel mill and performing environmental cleanup. It announced the new brand name of Tradepoint Atlantic — a switch from the former Sparrows Point Terminal — earlier this month.

Politicians said they hope to see 10,000 jobs there in the next 10 years.


Baltimore County is seeking state support for as much as $100 million in new infrastructure investments, such as upgrades to bridges and a new highway exit to allow trucks headed to the logistics hub to bypass a toll both, County Executive Kevin Kamenetz said.

Companies located in the area, part of a new enterprise zone, also are eligible for income and property tax breaks. The site also is part of a foreign trade zone, which also provides tax benefits.

"We're going to work as a team. It's not a Republican-Democrat issue," said Rep. C.A. Dutch Ruppersberger. "It's about doing what we need to do to create the jobs."

Eric Gilbert, executive vice president of development at Tradepoint, said the firm hopes to sign on new projects at a pace of 1 million square feet a year. The firm plans to develop some projects.

In the case of FedEx, it is leasing about 50 acres to developer Scannell Properties, which regularly works with FedEx.

The new warehouse, to open around August 2017, will be FedEx's fourth in the Baltimore region. The shipping company has been growing, adding 11 new hubs and 500 other facilities since 2005.


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The Tradepoint Atlantic site stood out for its location and access to highways such as I-95 and I-70, said Kevin Koken, vice president of eastern region operations for FedEx Ground. Koken said growing demand, driven in part by rising e-commerce shipments, means there are no plans to shut any of the existing warehouses, he added.

"We'll not be closing anything. This is an additional node to our network," Koken said.

The project represents "more than $50 million" in investment, said FedEx spokesman David Westrick.

Koken said the building would open with about 150 FedEx employees. The company also regularly works with other firms, who would likely bring on 100 to 150 people around the same time, he added.

Gov. Larry Hogan, who received a standing ovation from the crowd of businessmen when he began to speak, said the new lease is a sign of the growing strength of Maryland's economy.

"FedEx's success is Maryland's success," he said. "It's tremendous progress, but we are just getting started."