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Great deal for Beth Steel


After giving Bethlehem Steel more than $20 million in tax breaks in exchange for the rights to 300 acres of industrial land, Baltimore County officials say they may let the company keep the property.

County officials defend the financial help given to the locality's largest private employer -- even if the company is never asked to surrender the land. And as they review the 7-year-old arrangement, they aren't questioning the multimillion-dollar annual tax break, or whether other strapped local companies should receive similar treatment.

Instead, they're focusing on environmental issues tied to the property. They fear that the county, by taking ownership of the land, might be exposed to millions of dollars in cleanup costs.

But John D. O'Neill, president of the Maryland Taxpayers Association, criticizes the entire arrangement, saying the county should eliminate the tax breaks unless it takes the land.

"The land has turned out to be a white elephant," he said yesterday. "Why should they continue to get the tax breaks?"

Meanwhile, county Economic Development Director Robert L. Hannon is reviewing the deal, and is to decide by the end of August whether the Sparrows Point land represents an opportunity to be seized -- or a liability to be shunned.

Easy access to highways, rail lines and water would appear to make the land, which is divided into five parcels, a prime site for redevelopment. And that's what county officials were looking for in 1988, when they signed an agreement designed to bring jobs to the county's beleaguered east side.

Officials now fear that years of steelmaking may have left environmental hazards on the land, exposing the county to lawsuits and expensive cleanups if it takes title to the property.

"A hundred years of steelmaking is not a clean industry," said Mr. Hannon, who helped broker the county's 1988 agreement with Bethlehem Steel.

The five parcels now are mostly an empty wasteland. Company-owned worker housing on one parcel has been razed. Equipment is stored on some of the land; other parcels are covered with trees and brush.

County discussions with Bethlehem began soon after a 1986 study by the Eastern Baltimore Area Chamber of Commerce recommended that excess property at the plant be converted into an industrial park to help replace the thousands of jobs lost by a decline in the steel industry.

In January 1988, the county and company reached a tentative agreement for the county to acquire the land. By then, jobs at Bethlehem Steel had dwindled from 30,000 in the 1950s to about 7,200, and more jobs were about to be lost.

Bethlehem Steel agreed to give the county the land if the county would give the steelmaker a $3 million-a-year break in utility taxes and take over operation of the company's fire station. The agreement also specified that the state would take over seven miles of roads built by the company.

Those conditions were met, and, over the years, county officials made repeated announcements that development of the Sparrows Point Industrial Park, as it was called, was imminent. Still, the county didn't take the land.

In 1991, a tentative agreement was announced in which the company would guarantee liability protection for Baltimore County.

In 1992, then-County Executive Roger B. Hayden again announced that an agreement had been reached and predicted that the industrial park would generate 3,000 high-paying manufacturing jobs -- "the kind of jobs that will bring prosperity to our citizens and our county."

But Mr. Hannon, who had left the county government in 1988, returned in May to find the issue still unresolved.

He said the county had not taken possession of the land for a number of reasons, including a lack of continuity in the economic development department, the cost of laying roads and water lines on the property, and a recession that dampened the enthusiasm for land development.

Even more significant were the concerns about pollution. The county spent more than $800,000 on site plans and environmental studies, and consultants deemed the land "relatively clean." But Mr. Hannon said county officials worried that Bethlehem Steel's promise to indemnify the county for up to $1 million wouldn't be enough to cover the costs the county might incur.

Mr. Hannon said he and his staff will review the environmental studies that were done and consider market demand for the site before he makes a recommendation to the county executive.

The county's options include setting up a corporation to develop the property, selling it to private developers or letting Bethlehem keep it.

Jan Ramsay, president of the North Point Peninsula Community Coordinating Council, said neighbors would not be disappointed if the county decided against developing the land. Besides having concerns about pollution from smokestack industries, people who live across Jones Creek from the steel plant are worried about noise new factories might make, she said.

"We're not against job creation, but we don't want the community decimated," Mrs. Ramsay said.

Patricia Winter, director of the Eastern Baltimore Area Chamber of Commerce, said the chamber still views the property as a prime opportunity to bring jobs, but she said any decision would be welcome. "No matter what the decision, it is important to make one and not just let things sit on the back burner forever."

Despite criticism from the Maryland Taxpayers Association, County Councilman Louis L. DePazzo, who represents the Dundalk area, and Mr. Hannon say the tax breaks are reasonable for a company that has 5,300 workers.

"Beth Steel is one of the last bastions of employment down here," Mr. DePazzo said. "They've done a lot for us."

Mr. Hannon added, "If some of the tax relief provided by the county has spurred the company's confidence, all that's for the good."

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