SPARROWS POINT FLYING FALLOW?
|Hilco Industrial, the liquidator that last week agreed to buy RG Steel's Sparrows Point plant at auction, likely assumed a quick disposition of equipment in its $72M bid, according to Ballard Spahr's Ray Truitt (just in time for the holidays, you can get your loved one a gently-used arc furnace). But the deal still could slow or even derail. If it does go through, the site likely will lie empty and still for some time.|
|Yesterday, Ray (center, at a restaurant on the Cours Mirabeau in Aix-en-Provence last year with daughter Gina, son Sean, wife Mary Tilghman, and daughter Brigid, who was studying in France) told us the US Bankruptcy Court, in its pending approval of the sale, could consider a lawsuit raised by nearby residents against RG Steel for contaminating the area. If the lawsuit does come into play in Hilco's deal, it would slow the court's approval and thus the closing of the deal—perhaps past some contingency date when Hilco is free to withdraw its bid, he says.|
|Ray also tells us Hilco likely values the plant's equipment (for resale) more than its real estate; if there was an operator out there to run the steel mill, it would have shown up as a bidder. The land itself probably has little value, as any buyer must deal with the parcel's environmental issues. Such an investment narrows the margins a whole lot on then re-opening it as a manufacturing site. Meanwhile,remediating and redeveloping heavy industrial sites for other uses can take decades.|
|It's been almost 30 years since Allied Chemical's plant at Harbor Point closed and decades since the shipyards at what is now HarborView closed. But now Harbor East Development is building Exelon's HQ at Harbor Point. And at HarborView, the PierHomes have sold out, according to McWilliams | Ballard's Ross McWilliams and Chris Masters (above). Those stories (albeit long) had happy endings with non-industrial uses. On the other hand, Duke Realty bought the old 180-acre GM plant in '06 and remediated the site but is still sitting on 153 acres of it, waiting for demand to justify building warehouses. Ray tells us Sparrows Point's likeliest fate is that Hilco will spend as little as possible on the environmental problems,delaying the game until someone wants to buy or the State steps in to preserve it as open space. (If it hangs on long enough, it could also make a good episode of Hoarders.)|