Sparrows Point eyed for $1 billion plant

Sparrows Point is one of three sites being considered by a New England company for the construction of a $1 billion paper manufacturing plant that would employ about 600 workers.

It would represent the largest investment in the state in memory, said James Peiffer, director of business development for the Maryland Department of Economic and Employment Development.


By comparison, Mercedes-Benz plans to spend $300 million on an auto assembly plant near Tuscaloosa, Ala. General Motors Corp. invested about $270 million to renovate its Baltimore assembly plant to produce minivans, and Bethlehem Steel Corp. invested about $1.5 billion to upgrade its Sparrows Point mill, but that was done over a decade.

The paper plant could also temporarily generate up to 1,500 construction jobs, if the Baltimore County site is selected and everything goes as planned, according to the developer.


Other sites being considered for the plant are Bow, N.H., and New Milford, Conn.

The project is being proposed by Ronald J. Morgan, head of Evergreen Pulp and Paper Co. in Greenwich, Conn., who has already launched a similar, though smaller, project in Red Rock, Ariz., a suburb of Tucson.

Mr. Morgan could not be reached for comment yesterday. But Peter Brickfield, the head of a Washington law firm that is doing the site selection work for the project, said Evergreen might build a plant at Sparrows Point even if it decides to construct one in New England.

"We probably would not build plants in New Milford and Bow," he said, "but we may build plants in Sparrows Point and New Milford or Bow."

Mr. Brickfield, of Brickfield, Burchette & Ritts, said the plant would recycle paper to produce newsprint and higher-quality paper, such as that used in Parade magazine. He estimated that annual production would be between 750,000 tons and 1 million tons.

Mr. Brickfield said the plant would remove ink from old paper and convert the old paper into pulp in large vats heated by steam. The pulp would then be made into paper.

Over a period of years

He said the plant would likely be built in phases over a period of years, starting with one paper machine.


Regarding the Sparrows Point plant, Mr. Brickfield said "it's close to Washington, the greatest paper-generating city in the world." He said having two major newspapers in the region was also a lure.

Mr. Morgan was recently quoted in the Concord Monitor, a newspaper in Concord, N.H., saying he liked Sparrows Point because it is near the water, is the home of a Bethlehem Steel plant and is zoned for heavy industrial manufacturing.

Mr. Brickfield said the company has done some preliminary work in evaluating the Sparrows Point site and would begin a detailed study within the next month or six weeks.

"We are looking at them site by site," he said. "It is too confusing to try to examine them all at the same time.

"Sparrows Point is on the list and will be looked at hard."

Once Evergreen begins serious evaluation of the site, Mr. Brickfield said the company will meet with economic development officials, residents in the area and representatives


of environmental organizations, such as the Save the Bay Foundation.

"We'll come in and say, 'This is who we are and this is what we want to do,' " Mr. Brickfield said. "We would explain the impact. We would not move in where the people did not want us. That would be a big mistake."

County approached

E. Neil Jacobs, director of economic development for Baltimore County, said that all he knows about the recycling project is that his office was approached recently by a representative of Northeast Utilities in Hartford, Conn., about building a power plant on land that Bethlehem Steel is in the process of transferring to the county.

During those talks, Mr. Jacobs said, the official mentioned that the utility would also like to bring in a paper recycling company that would use the excess steam generated by the power plant.

Mr. Morgan has been working with Northeast Utilities as a potential supplier of the electricity and steam needed to operate the paper recycling mill in New England if the company decided to build there.


Met with skepticism

Lois Yates, director of economic development for the Arizona Department of Commerce, said she and other state officials were "very skeptical" when Mr. Morgan first approached them about building a paper recycling plant in Red Rock.

L "Everybody asked, 'Is this guy for real,' " Mrs. Yates said.

She described Mr. Morgan as "a young person, about 40, who likes to talk a lot.

"He likes to throw a lot of names around. He's very pushy. He really knows his business and he has an ability to put financing together. He's a sharp guy."

"Yeah, he's for real," Mrs. Yates added. "He made believers out of us. He really did."


Mr. Morgan came to Red Rock, did all the ground work for a $400 million plant that will employ about 175 workers, and lined up customers, she said.

The project captured the attention of Fletcher Challenge of Canada, a large newsprint company based in Vancouver, British Columbia. Fletcher Challenge acquired Mr. Morgan's interest in the project and is proceeding to build the plant in conjunction with the Arizona Public Service Co., which will supply the electricity and steam, Mrs. Yates said.

Fletcher Challenge has invested about $5 million in site preparation work for the plant, she said.

Private offering mulled

Mr. Brickfield, the attorney, said Evergreen intends to develop its new project on its own and is currently working with a Wall Street investment company to help arrange the financing. He said it would probably include "a private offering with a handful of investors."

Mrs. Yates, who was formerly with Maryland's economic development office, said Mr. Morgan has had discussions with John Sundergill, an economic development official with Baltimore xTC Gas and Electric Co., regarding the Sparrows Point project.


Mr. Sundergill could not be reached for comment yesterday.

Kathleen Meade, a spokeswoman for the National Recycling Coalition Inc. in Washington, said there is a "pretty strong market" for recycled newsprint because a dozen states, including Maryland, require publishers to use a certain percentage of recycled papers.

She said other states have agreements with publishing companies to use more recycled paper.