August 08, 2012|By Jamie Smith Hopkins, The Baltimore Sun
"We've been making steel here for 120 years, and we're not giving up," said Rosel, the local union leader and the third generation of his family to work at Sparrows Point. "We're still going to fight to find an operator for this plant, even in the face of what just occurred. There is an opportunity to make money for Hilco or somebody else by selling it to a strategic steelmaker who actually to wants to operate it."
Like the workers, Baltimore County has a stake in what happens. It's not just the jobs — it's the taxes.
RG Steel owes the county nearly $4.6 million in property taxes and sewage charges — the mill was about to go to tax sale when the company filed for bankruptcy protection. The county's attorneys said in court documents Wednesday that the local government would object to any sale that didn't result in prompt repayment of those back taxes.
The mill sits on more than 2,400 acres at a prime location, south of Interstate 695 on a peninsula that juts into the Patapsco River. But the area is far from pristine.
"More than a century of steel making and finishing operations have resulted in perhaps the most complex environmental cleanup site in the Chesapeake Bay watershed," Baltimore County's attorneys wrote in court documents.
The U.S. Justice Department said in a court filing last week on behalf of the Environmental Protection Agency that the federal government would object to any buyer without the wherewithal to continue mandated efforts to find and remediate problems.
"Sale of any Steel Facility to a purchaser who is incapable of performing cleanup and otherwise complying with the law is functionally indistinguishable from abandonment," the federal agency wrote in the filing.
It's not a foregone conclusion that a company specializing in liquidation will tear apart a closed facility and sell it off in pieces. Michael W. Rhodes, president of the Investment Recovery Association, a trade group for specialty firms that turn idle assets into cash, said it depends on the asset.
Sometimes it will be sold to a company intending to operate it, he said. Otherwise, a liquidator will market the pieces that can be sold intact and sell the rest as scrap — potentially tearing everything down to the ground.
"It really boils down to the math, whether it's Hilco or anybody else," said Rhodes, an investment recovery supervisor in Virginia. "When they choose to buy a facility, they'll go in and do an assessment."
Exhibit one is Frontier Industrial Corp., a plant demolition and brownfield remediation company that won the bidding last week for RG Steel's facility in Mingo Junction, Ohio. Craig Slater, Frontier's general counsel, said Wednesday that "lease, sell, operate are all possible alternatives for us."
"Steelmaking is not our core business, but it's a possibility that we'll work together with another company or joint venture to start one or more of the lines of the facility," he said. "It's something we're considering."
jhopkins@baltsun.com
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Sparrows Point steel mill by the numbers
Making steel since: 1889
Employees: 2,000 – largely laid off
Peak employment: about 30,000
Sale price four years ago: $810 million
Winning bid: $72 million
Acreage: more than 2,400 on the Patapsco River
Owners since 2000: Five
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