Sparrows Point Partnership First Year Report
May 3, 2013
For more than 100 years, Sparrows Point was synonymous with steel. At one time, it was the world’s largest steel mill, stretching nearly four miles. For decades, the steel mill was the largest employer in Baltimore County, employing 30,000 workers at the height of production in the late 1950s and bringing nearly 10,000 jobs with other local companies that were part of the steel industry supply chain. The mill produced steel for the Golden Gate Bridge, cables for the George Washington Bridge and critical product for both World Wars. Sparrows Point provided well-paying jobs that supported families for generations.
After a slow, tortuous decline due to uncompetitive global changes and disastrous domestic decision-making, the Sparrows Point that we knew ended on May 31, 2012.
Seventeenth century French playwright Moliere wrote that “The greater the obstacle, the more glory in overcoming it.” Even though things looked bleak, we remained optimistic in this County. We were determined to overcome this obstacle in order to bring thousands of good jobs back to Sparrows Point. Today we take the first steps toward fulfilling that goal. Today we begin to create the region’s economic engine for the next century: the new Sparrows Point.
In February of last year, I tasked Economic Development Director Dan Gundersen to chair the Sparrows Point Partnership, a business advisory group of port officials and business, real estate, manufacturing, logistics and distribution executives. The Partnership was charged with developing a framework for bringing new jobs to the Point, and they met regularly from May of last year into 2013.
I thank Dan Gunderson and his team in the Department of Economic Development for their work with the Partnership. Sharon Klots has been especially instrumental in providing research to help the Partnership develop its findings. And we extend our great appreciation to each member of the Partnership for serving on this task force.
We are bullish on Sparrows Point, and the basis for our optimism is simple. We view the landmass not as the resting place of a declining smokestack industry, but as a vibrant peninsula with a combination of assets rarely found in one place in the Northeast United States:
- A massive land product: 5.3 square miles, with more than 3,300-acres zoned for industrial use
- Deepwater access near the growing Port of Baltimore
- Interconnected transportation, including direct connection to two Class One railroads and interstate highways
- Exceptional natural gas and electricity supplies
- A large supply of treated water flowing directly to the site
- A highly capable, motivated workforce
We have every reason to believe that these assets will bring 21st century jobs to Eastern Baltimore County and the entire region.
Before we go further, let’s talk about the environmental condition of the property. The entire Sparrows Point peninsula is under a 1997 Consent Decree with the EPA and the State to remediate contamination from more than 100 years of steelmaking. Despite perceptions to the contrary, environmental contamination should not deter industrial redevelopment for the vast majority of Sparrows Point. Remediation and redevelopment of about 80 percent of the site — approximately 2,400-acres — should be feasible in the not-too-distant future.
The most difficult locations are five areas with the most serious contamination, totaling about 600-acres, located primarily at Coke Point. According to the Maryland Department of the Environment, the Consent Decree requires extensive, extremely challenging remediation in these five areas.
The County’s vision for growth at Sparrows Point is driven by several key principles:
- Expand maritime use on the peninsula — you’ll be hearing much more about this in a moment
- Retain the current zoning for industrial use
- Encourage private ownership to rebuild the aging infrastructure on the site
- Manage a long-term strategy that includes active participation and guidance from Baltimore County, the State of Maryland and the Port of Baltimore
Redevelopment with these four principles in mind will maximize economic value for the County and the larger region.
The Sparrows Point Partnership identified a number of major market opportunities. This concept map shows how these opportunities might play out on the “new” Sparrows Point peninsula. This map is a broad-brush look, but I think it helps prioritize and visualize how redevelopment can capitalize on our fundamental strengths.
As you can see from the two large blue areas on the map, Port and Maritime Industries are central to the success of Sparrows Point. The Sparrows Point peninsula offers a wealth of job-creating opportunities that will last for generations.
Beyond Port and maritime uses, the Partnership views clean energy, advanced manufacturing and value-added assembly, as well as distribution, logistics and freight as strong areas of opportunity.
I’d like to take a few minutes to look at each of these areas more closely.
Port and Maritime
The world is looking to water as the most cost-effective way to move goods. Port-related activity is the paramount market opportunity for Sparrows Point. The Partnership sees both short-term and long-term opportunities for the Point’s deepwater frontage. And our Port of Baltimore can utilize the Point to expand its capacity and meet growing shipping needs. I cannot emphasize this enough. The Port of Baltimore already is a critical driver of the State and regional economy. Today, the Port generates more than 40,000 jobs in Maryland. And the Port’s future is even stronger.
The Port of Baltimore is one of only two East Coast Ports ready for the new container “superships” that will bring goods through the deepened Panama Canal to Seagirt Marine Terminal in Dundalk. The 50-foot shipping channels are complete, the cranes are up, and the Port is ready for these next-generation ships to arrive in 2015.
Keeping the Port’s channels dredged is critical to keeping it competitive and positioned for future growth. Essential to the success of the Port’s public and private terminals, Coke Point offers immediate and long-term opportunities to generate new jobs while at the same time helping to preserve hundreds of port-related jobs by providing a necessary dredge disposal area. Think about this for a second. The Coke Point area can accommodate a dredge containment site that will allow deep-channel maintenance — and therefore extended vitality — of the existing port. Once the dredge containment site is completed in 10 to 12 years, the Maryland Port Administration believes a new marine terminal can be built on the expanded site, creating a potential for 9,000 new family-supporting jobs.
In addition, the east side of Coke Point near the turn-around basin offers an even quicker opportunity for port expansion, with piers immediately available for bulk commodities, including loading and unloading of automobiles. Pursuing this expansion now will allow Sparrows Point to become the prime location for a new container, roll-on-roll-off (RO-RO) facility.
So, without even taking into consideration the job opportunities on the rest of the peninsula, 10,000 jobs can be created at Coke Point alone. This number well exceeds the 2,000 RG Steel jobs that were lost last year. When successful, Coke Point can replace every steel job lost, plus thousands more.
Now, Coke Point also presents the greatest environmental challenges, with tremendous clean-up expense. But we will not shy away from our commitment to have Coke Point remediated. The current owner must recognize that we will not allow them to avoid this clean-up obligation, which could cost up to $75 million.
From my perspective, it takes a unique entity with the resources and commitment necessary to accomplish this goal, including the wherewithal to clean up the site. That entity is clearly the Port of Baltimore.
I have expressed in no uncertain terms to Jim White, executive director of the Port, that Baltimore County supports the Port in any and all efforts to acquire 400-acres constituting Coke Point, including the turning basin. That's how important I believe Coke Point is in our efforts to bring jobs back to Sparrows Point.
Let’s move on to other opportunities that would be compatible with increased port and maritime development on the peninsula.
It is projected that the Mid-Atlantic region will not be able to produce adequate supplies of electricity starting in 2019, if not before. In Maryland, the problem is more immediate, with transmission constraints and a lack of new generating capacity making the State a net electricity importer. Maryland also has made a commitment to generating 20 percent of its electricity from renewable energy sources by 2022.
Clean energy production offers opportunities for solar, wind, biomass and natural gas power generation facilities at Sparrows Point.
With Maryland being one of the first states to authorize offshore wind energy facilities in the Atlantic Ocean, Sparrows Point is also a good candidate for the assembly and staging of offshore wind components.
Advanced Manufacturing and Assembly
Sixty-one percent of larger companies recently surveyed are considering bringing manufacturing back to the U.S., according to the MIT Forum for Supply Chain Innovation. With its landmass and existing industrial zoning, Sparrows Point is ideally positioned to capitalize on this reshoring trend.
Today’s advanced manufacturers are not the smokestacks of the steelmaking days. You only have to look to the GM plant in White Marsh to see how technology, robotics and 3D printing combine with a tech-savvy, committed workforce to add value and productivity to 21st century manufacturing and assembly.
Distribution, Logistics and Freight
Sparrows Point’s integrated transportation network is already in place. Freight tonnage to, from, and through Maryland is expected to double by 2035. In fact, freight tonnage through the Port of Baltimore reached an all-time high in 2012. Sparrows Point can become the efficient, cost-effective place to add value and keep the supply chain moving.
We’re not talking idle facilities where goods sit for weeks or months before being shipped to a customer. Newer distribution and logistics parks can have more in common with light manufacturing facilities than with the traditional warehouse. Some so-called “freight villages” offer warehousing space for various term leases, along with equipment and services supporting logistics and distribution activities.
The Greenway buffer contains privately-owned marinas and open space, along with the County Fire Rescue Academy. We envision this space as a natural buffer zone and gateway entrance to the peninsula, which could also include a monument to the area’s industrial heritage.
The New Sparrows Point
Ladies and gentlemen, this is the new Sparrows Point. For generations, Sparrows Point and the industrial neighborhoods of East Baltimore County have represented the promise of well-paying jobs and the potential for greater economic prosperity.
Thanks to the business leaders on the Sparrows Point Partnership for helping us craft a vision that can turn that promise back into reality. And I know I can call on you as we move forward.