Baltimore County plans to offer up to $78 million in financial assistance to help Tradepoint Atlantic build the roads and water and sewer lines needed for the redevelopment of the former Bethlehem Steel mill in Sparrows Point.
County Executive Don Mohler announced the financial package Wednesday, saying it capped months of negotiations with Tradepoint officials.
“I think we’ve ended up with a deal that’s fair to Tradepoint Atlantic and makes fiscal sense for the people of Baltimore County,” Mohler said.
The proposal calls for Tradepoint to bear the up-front costs of building the infrastructure, then seek reimbursement from the county. Water and sewer funding would be capped at $44 million; road work would be capped at $34 million.
The deal must be approved by the Baltimore County Council and county executive-elect Johnny Olszewski Jr.
Olszewski, a Democrat who won election last week to become the next county executive, was briefed Tuesday on the plan and said in a statement that he was “encouraged by the reduced taxpayer cost and focus on infrastructural investment.”
Under the new deal, the money for the water and sewer work would come from the same revenue source that funds other water and sewer projects, called the Metropolitan District.
Will Anderson, the county’s director of economic development, said the county would essentially hire Tradepoint to build the items, then present the county with the bill.
For road projects, the county anticipates help reimbursing Tradepoint for those costs. The site is in a state enterprise zone, which gives builders a break on property taxes while they are built out. To soften the blow of losing that property tax revenue, the state typically pays counties about half of the money they’re missing out on.
That money usually goes to the county’s general budget, but county officials say in this case part of it will be used to pay back Tradepoint for the road work.
Tradepoint initially sought a government-assisted financing deal — known as tax-increment financing, or TIF — worth up to $150 million. Under that scenario, the government would have issued bonds to raise money for the project, then been paid back through a portion of the increased property taxes on the land.
TIFs are often controversial because the county would give up some of its tax revenue for up to 30 years.
Mohler said he wasn’t comfortable with giving up property tax money for that long, so he pushed for a different type of arrangement.
Aaron Tomarchio, a senior vice president for Tradepoint, said the deal provides his company with the help it needs while not being a burden on county taxpayers.
“What we’ve asked for the last two years is help getting the right public infrastructure in place at the right time,” he said.
Tomarchio called the proposal “innovative” and said it “accomplishes what we need to do to get the infrastructure in place to facilitate continued redevelopment of the site. … This plan facilitates doing just as we envisioned initially when we proposed the TIF.”
Tradepoint officials say they need to extend the water and sewer lines, build new roads and upgrade existing roads to attract tenants to the 5-square-mile property, which is envisioned as an industrial campus taking advantage of the port, rail and highway options at Sparrows Point.
Tradepoint has landed high-profile tenants including distribution centers for FedEx, Amazon and Under Armour, grain storage for Perdue Agribusiness and a vehicle-shipping operation run by Pasha Automotive. But vast stretches of the old steel mill property have no utilities, making the land unsuitable for development.
Without financial assistance, it would take longer to build out the infrastructure, possibly causing the company to lose out on potential tenants, Tradepoint officials said. The company began publicly floating the idea of financial help from the county two years ago.
Mohler sees this infrastructure deal as a continuation of the work of the late Kevin Kamenetz, the county executive who died from cardiac arrest in May.
“I think Kevin Kamenetz made a pledge to the people of eastern Baltimore County when steel went away that ‘I will do everything in my power to make sure we bring in a new generation of jobs,’” Mohler said.
Mohler had tried to get the deal done before leaving office on Dec. 3, but ended up pushing the timeline back. If Olszewski picks up where Mohler leaves off, the matter will go before the County Council for a public hearing Dec. 11 with a vote Dec. 17.
“Did I feel an obligation to finish this for Kevin Kamenetz? Of course,” Mohler said. But then he decided it was prudent to slow down.
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“We saw no reason to rush this,” he said.
Olszewski, who lives in Dundalk, agreed, saying in his statement he supports “giving our communities time to fully review the details of this agreement.”
County Councilman Todd Crandell, a Republican who represents Sparrows Point, said he’s also glad to have more time to review the proposal. He said the deal is promising at first glance — but needs more scrutiny.
“On the surface, it... looks like the impact to tax revenues is lessened by this new approach,” he said.
“We were hearing a lot of community support for the TIF,” he said. “Now that it looks like it’s a better deal for everyone, I’m curious to hear the community’s response.”
Tradepoint Atlantic also is offering to give five acres to the county — which could eventually become a new fire station, police substation and fire training academy. Neither the county nor Tradepoint could say how much that land is worth.
Meanwhile, the county is moving forward on passing a separate $20 million federal grant through to Tradepoint that will help upgrade the property’s port facilities. The grant, announced in March, will be combined with about $30 million from Tradepoint’s investors to pay for the work. Council members are to approve a bill Monday that will send the federal grant money to the company.