Redwood Capital Investments, a vehicle of Anne Arundel businessman James C. (Jim) Davis, has agreed to an ambitious clean-up plan at the site of the former Sparrows Point steel mill.
The sale of the vast waterfront property to the Davis group, which was disclosed in The Brew and other press accounts in July, was made official today by Baltimore County Executive Kevin Kamenetz.
The group is expected to settle on the property today by paying an undisclosed sum to two Midwest companies that purchased the mill at a forced bankruptcy sale in August 2012.
Separately, Maryland Attorney General Douglas F. Gansler announced a settlement agreement with the Davis group outlining the cleanup of decades of industrial pollution and contamination at the steelmaking site.
The agreement was billed by state and county officials as a big step forward in redeveloping the property into a center for port-related manufacturing and distribution uses.
Such redevelopment has been hobbled by a 1997 consent decree between a former owner, Bethlehem Steel Corp., and federal and state regulators over the massive amounts of pollution at the site.
$48 Million Commitment
“This agreement to clean up Sparrows Point – at no cost to taxpayers – ensures the restoration of an environmental eyesore and a public health hazard that has long been one of the most toxic sites in Maryland,” Gansler said in a written statement.
“The people who live and work nearby can finally look toward a healthier community. It’s exciting to envision a revitalized Sparrows Point as an economic engine and job creator for our state.”
Under the terms of today’s agreement, Sparrows Point Terminal LLC, the corporate vehicle for the Davis group, will assume responsibility for ongoing environmental work and will develop and execute plans to complete clean-up of the property.
The new owner has agreed to provide the Maryland Department of the Environment (MDE) with $48 million in financial assurances – a $43 million trust fund and a $5 million letter of credit – to pay for the cleanup.
FULL TEXT of today’s agreement between Maryland Attorney General, MDE and Sparrows Point Terminal LLC
An independent engineering firm will review the adequacy of the Davis group’s financial commitment every six months. If cleanup costs go 10% or more over budget, Sparrows Point Terminal will put more money into the trust fund.
Today’s agreement also provides for Sparrows Point Terminal to incur penalties of up to $5,000 a day if it fails to meet deadlines outlined in the agreement and requires the company to pay for MDE’s oversight and response costs up to $100,000 a year.
Offshore Pollution Investigation
The Davis group has also agreed to provide the Environmental Protection Agency (EPA) with $3 million to perform additional offshore investigation and, if necessary, offshore remediation of pollution.
The steel mill’s leakage of benzene and other hazardous chemicals into Baltimore Harbor has been the subject of a long-running dispute between the Chesapeake Bay Foundation and other environmentalists and the ex-steel mill’s string of owners.
Baltimore County Executive Kamenetz hailed the sale as a key step toward his vision of the property as a new port terminal for the Maryland Port Administration and hub of state-of-the-art manufacturing and distribution factories.
The Davis group will now play a major role in attracting new industries to the peninsula, located just south of Dundalk, which has ready access to the Baltimore Beltway and CSX and Norfolk Southern rail freight lines.
In its 1950s heyday, Sparrows Point was the largest steelmaking property in the world, employing 30,000 workers and serving as the flagship facility for Bethlehem Steel.