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Former Sparrows Point mill owner fined for environmental violations during demolition

The former owner of the Sparrows Point steel mill in Dundalk and its demolition contractor have been hit with more than $3 million in penalties for pollution violations that officials say occurred during the tear-down of old mill buildings.

The Maryland Department of the Environment alleged that former owners HRE Sparrows Point LLC and Sparrows Point LLC and contractor MCM Management Corp. committed violations that included failing to control stormwater, sediment and erosion, dumping trash and industrial waste, stockpiling scrap tires and handling asbestos improperly.

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The violations were discovered during inspections in 2013 and 2014, officials said.

Under a settlement reached with the state, HRE Sparrows Point, which owned the old buildings and equipment, must pay a $375,000 fine.

Sparrows Point LLC, which owned the land, and contractor MCM agreed to complete $3.375 million in environmental projects.

The projects do not have to be completed on the steel mill property, said Jay Apperson, a spokesman for the Maryland Department of the Environment. Instead, they could include environmental remediation or conservation efforts elsewhere.

Neither Hilco Global, an Illinois liquidation company that was involved with both HRE and Sparrows Point LLC, nor Michigan-based MCM responded Friday to requests for comment.

Alison Prost, Maryland executive director of the Chesapeake Bay Foundation, expressed satisfaction with the settlement.

"These are violations that we've been raising for years," she said. "There was no stormwater control. … It was all the slag and rubble right up to the water's edge. There was nothing to prevent what happened on land from ending up in the water."

Prost said it was a good idea to combine a fine with environmental work.

"We want cleaner water, and rather than dollars going to a general fund, having supplemental environmental projects leads to cleaner water faster," she said.

Maryland Attorney General Brian E. Frosh, whose office worked with MDE on the deal, called it a "creative framework" that will "provide a lot of additional environmental benefits."

The former steel mill was sold in September to Sparrows Point Terminal LLC, a company backed by local investment firm Redwood Capital.

Sparrows Point Terminal has plans to redevelop the 3,100-acre property into an industrial campus with logistics, manufacturing and port operations. Company officials have been quiet about potential tenants, but FedEx has applied for approval to build a distribution hub at Sparrows Point.

Sparrows Point Terminal has already agreed to spend at least $48 million to clean up contamination left behind after more than a century of steelmaking. The company paid $3 million to the Environmental Protection Agency for investigating pollution in the waters surrounding the property.

Sparrows Point Terminal officials declined to comment Friday on the state's settlement with the prior owner and MCM.

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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 then-owner RG Steel filed for bankruptcy. At the time, the steel mill employed 2,000 workers.

MCM continues to demolish old buildings at the site to clear the way for redevelopment.

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