The transformation of the old Bethlehem Steel site into a new regional economic engine will take a big step forward next month when new Fiats and Chryslers begin rolling off ships docked at Sparrows Point.
Pasha Automotive Services is opening an automotive terminal at the site of the former steel mill in Baltimore County, which is being redeveloped under the name Tradepoint Atlantic.
California-based Pasha will import hundreds of thousands of cars at Sparrows Point each year beginning in July, employing about 250 people in the near term and up to 400 at capacity.
The deal represents an important milestone for Tradepoint Atlantic as it works to turn the site that once employed tens of thousands into a new industrial campus.
Pasha would be the first large-scale industrial user of the site. Tradepoint Atlantic also has announced deals with FedEx for a distribution center that's under construction and with a local Harley-Davidson dealership for a training academy. While those tenants bring well-recognized names to the site, Pasha is the first to take advantage of Tradepoint's access to deep water, highways and railways.
"This is an important step in the transformation for Sparrows Point," said Aaron Tomarchio, Tradepoint Atlantic's vice president of corporate affairs. "This is the first time a new product like this is crossing the wharves at Sparrows Point."
Tradepoint Atlantic invested $5 million in improvements to accommodate Pasha, including upgrading ship berths, improving security and building roads.
The auto import business represents "proof of concept" that Tradepoint is suited as a port facility, said Joseph Greco, Tradepoint Atlantic's vice president of commercial and trade development.
Automotive imports are a major component of the port of Baltimore's business, with 750,000 vehicles coming into and out of the port in 2015 — down slightly from 780,000 vehicles in 2014, a record year. Fiat Chrysler vehicles are already imported into Baltimore through the state-run Fairfield Marine Terminal and the private Amports terminal nearby.
Jim White, director of the Maryland Port Administration, said it's good news to see companies coming to Tradepoint Atlantic, as long as they represent new business in the region and not just a shift from one facility to another.
"We see [Tradepoint Atlantic] as a great complement to what we have developed here," White said. "But we would like to focus on new business and new economic activity."
Greco said that's the case with Pasha. The Fiat Chrysler vehicles coming to Tradepoint are currently imported through Virginia, he said.
John Pasha, senior vice president of the company, said in a statement that the Tradepoint site has "virtually unlimited growth potential" as well as ready access to highways and the CSX and Norfolk Southern railroad lines. He said the company has been looking for a roll-on/roll-off terminal in the Mid-Atlantic region.
Pasha Automotive will initially lease 21 acres at Tradepoint, with plans to expand to 150 acres. The company will use a small building and construct a larger facility for processing that will open in March 2017, said spokeswoman Emily Sinclair.
Pasha operates mainly on the West Coast, though it has a distribution center in Brunswick, Ga. The initial lease at Sparrows Point is for two years, with a goal of signing a long-term deal after that. Financial terms were not disclosed.
Greco said he believes the Pasha deal could influence other potential tenants to sign on at Tradepoint.
"It's clear the market is quickly understanding what we have to offer," he said.
White said port administration officials wanted to buy the property Pasha is leasing, with plans to open their own automotive roll-on/roll-off terminal. Tradepoint Atlantic wasn't interested, he said, nor did the company want to sell to the port a parcel that could be used to store dredged material from shipping channels.
Greco said Tradepoint continues to work with the port on options for dredged material.
Since buying the site for $110 million in 2014, Tradepoint Atlantic has focused on finding tenants to lease portions of the vast, 3,100-acre property. The company has been tearing down most of the structures associated with the steel mill. It's also been continuing cleanup of the property's environmental contamination, pledging to spend more than $50 million on that effort.
Tradepoint Atlantic — a joint venture of Hanover-based Redwood Capital Investments and Chicago-based liquidation and redevelopment firm Hilco — has promoted a vision of an industrial campus with companies engaged in port operations, light manufacturing, transportation and logistics.
Last fall, officials announced plans to build a commercial center along the Baltimore Beltway and Route 151 to serve the campus with a hotel, grocery store, day care center and other retail shops. Tradepoint officials pitched that project to retailers at the recent International Council of Shopping Centers conference in Las Vegas, where they drew strong interest, Tomarchio said.
The company will open a marketing center — made from old shipping containers — at the site on Wednesday.
"Sometimes it's a little hard for people to envision what's going to happen here," Tomarchio said. "The marketing center can give people a glimpse."
Tradepoint Atlantic shed its original name, Sparrows Point Terminal, in January. The new name is seen as easier to market globally. While the "Sparrows Point" name is gone, the company paid homage to the "Star of Bethlehem" that graced the steel mill's blast furnace for decades by incorporating a star into the Tradepoint Atlantic logo.
The Sparrows Point site was used for making steel for more than a century, mostly as a Bethlehem Steel facility. After a series of ownership changes, the mill was closed for good in 2012 when its then-owner, RG Steel, went bankrupt. When it closed, the mill had about 2,000 workers.
Officials have expressed hope that Tradepoint Atlantic may one day host companies employing 10,000 workers. Baltimore County and state officials have expanded business incentive programs to include Tradepoint.
The Chesapeake Enterprise Zone was expanded last year to include all of the Sparrows Point peninsula. Businesses in the zone are eligible for property tax and income tax breaks for creating jobs.
Tradepoint also sits in a Foreign Trade Zone, where taxes are not applied to imported goods until they leave the zone.
Last year the Baltimore County Council granted flexible zoning to the site to make it easier for varied uses — commercial, light industrial and heavy industrial — to take place without having to rezone each section of property.
"Tradepoint Atlantic is rapidly living up to its potential as the most important jobs generator in the region," Baltimore County Executive Kevin Kamenetz said in a statement. "With each new tenant, we come closer to returning 10,000 jobs to Sparrows Point."