Investment group in talks to purchase Sparrows Point
Wednesday, 16 July 2014 13:51

The former Sparrows Point steel mill has sat idle since former owner RG Steel filed for bankruptcy in May 2012. The property was purchased by liquidator Hilco Industrial and redeveloper Environmental Liability Transfer in August 2012.  photo by Roland Dorsey

Redwood Capital Investments has expressed interest in site

 by Nicole Rodman

    Multiple sources have confirmed that Hanover, Md.-based investment company Redwood Capital Investments is in talks to purchase a large portion of the former Sparrows Point steel mill site.
    Del. John Olszewski Jr. told The Eagle that he spoke with representatives of the company last month.
    “I believe that this signals great potential and promise for the entire Sparrows Point peninsula,” Del. Olszewski said of the potential sale.
    “Not only does Redwood have a significant capital base that would be necessary to cultivate a clean property and pro-growth environment at the site, but they also are a local company headquartered right here in Maryland.”
    Redwood head Jim Davis, a Baltimore businessman, founded what would become Allegis Group with his cousin, Baltimore Ravens owner Steve Bisciotti, in 1983.
    Today, Allegis Group is the largest privately-held staffing agency in the U.S.
    Redwood’s other holdings include Erickson Living Management LLC, which manages retirement communities in Maryland and elsewhere across the country.
    Currently, the mill property is owned by liquidator Hilco Industrial.
    Hilco, along with redeveloper Environmental Liability Transfer (ELT)  purchased the mill site for $72 million in August 2012.
    A letter submitted to the U.S. District Court by Gerard P. Martin, a lawyer for ELT-owned Sparrows Point LLC, indicated that within the last few months, ELT had agreed to sell the mill site to Hilco.
    According to Martin’s letter, Hilco then agreed to sell “a significant percentage” of the site to “a local investment group”, which has since been identified as Redwood Capital Investments.
    The purpose of Martin’s letter was to request the extension of  a temporary order allowing wastewater from the Back River Wastewater Treatment Plant to flow through pipelines at the former steel mill site.
    The letter requested that the order, set to expire on Aug. 1, be extended until early October.
    Since the 1940s, wastewater — once used in steelmaking — has flowed to the Sparrows Point steel mill under an agreement between Baltimore City and the steel mill owners.
    In September 2012, the mill site owners and the city reached an agreement allowing the city to continue piping wastewater at a cost of $80,000 per month.
    Last August, the mill site owners agreed to extend the agreement for a year if the city paid $105,000 per month.
    In remarks to The Eagle,  Baltimore City Solicitor George Nilson confirmed  that “an extension was jointly requested,” but provided no further details.
    Baltimore County spokesperson Ellen Kobler referred The Eagle to Hilco chief marketing officer Gary Epstein for comment.
    Epstein did not respond to a request for comment by press time.
     Many observers are hoping that the sale of the mill site to Redwood will help spur redevelopment at Sparrows Point.
    Port of Baltimore officials had been in negotiations with site owner ELT in an effort to secure use of the Coke Point portion of the site as a dredge containment facility and eventual marine terminal.
    The Sparrows Point Partnership, a committee formed by Baltimore County Executive Kevin Kamenetz, released a report last May recommending a combination of advanced manufacturing and assembly, clean energy and distributions and logistics industries for the site.
    For his part, Del. Olszewski is optimistic that the sale to Redwood is the first step to new industry at the site.
    “It is my hope that this signals the turning point for Sparrows Point and that we will be able to look back and view the day as one where a major economic recovery began to take shape in southeast Baltimore County.”