Michael Pedone’s to-do list looks something like this: Wake up. Watch dismantling of what was once the world’s largest steel mill. Figure out how to clean up a 3,100-acre site where dangerous contaminants have filled the air and water for more than 100 years. Find companies that might want to relocate to such a place. Oh, and get the phones working.
Such is the job description when your company buys Sparrows Point, the eastern Baltimore County peninsula that was once home to Bethlehem Steel’s largest plant. Pedone is the chief operating officer of Sparrows Point Terminal LLC, which in September plunked down a reported $110 million for the sprawling waterfront property that once employed close to 30,000 workers.
“If you think about the magnitude of what we’ve got here, you’d be stuck in an endless loop if you tried to come up with a cleanup plan before you bought it,” Pedone said. “Nothing about Sparrows Point is simple.”
For the first time in decades, the behemoth that was Bethlehem has a local owner, and state and county officials are cautiously optimistic that Sparrows Point’s future is brighter — and cleaner — than its turbulent past.
Sparrows Point Terminal LLC is funded by Redwood Capital, a private equity firm owned by Jim Davis, who is a cousin of Ravens owner Steve Bisciotti. Together, Davis and Bisciotti built Allegis, a staffing company worth $6 billion.
The sale marks the sixth time in 11 years that the steel company changed hands. But this time, state environmental officials say, the Point will finally receive the investment and remediation its surrounding residents have long demanded.
After what both sides describe as a tough negotiation, the mill’s new owners entered into an agreement with the Maryland Department of the Environment and the Maryland’s Office of the Attorney General to develop and execute a cleanup plan. Sparrows Point terminal LLC and Redwood agreed to provide the MDE with $48 million in financial assurances to pay for the cleanup. That includes a $43 million trust fund and a $5 million letter of credit. An independent third party will review the work every six months. The company will replenish the fund if necessary. If the company doesn’t comply, the state can fine it up to $5,000 per day.
MDE Secretary Robert Summers said his staff attorneys were “relentless” in crafting a deal that would finally address long-neglected contamination. Summers, who grew up fishing in the waters around The Point, remembers the orange glow in the sky from steel-making byproducts — a toxic brew of molten iron, chromium and zinc known as “kish.” Addressing the problem has long been a top priority.
“They’ve put a substantial amount of money into a trust find to clean it up, but that’s not the limit of it. They will continue to put money in as we progress, and they are going to pay the full cost,” Summers said. “I think we’re in a very good position moving forward here.”
The furnaces first began firing at Sparrows Point in 1889, when Pennsylvania Steel Company bought the property. Bethlehem Steel took it over in 1916, and cranked out massive amounts of steel in both war efforts. Steel from the Sparrows Point furnaces built the Golden Gate Bridge, the Chesapeake Bay Bridge and the cables on the George Washington Bridge. At one point, Sparrows Point supported a town that included a church, a school and several play areas.
High-school boys followed their fathers into jobs at the mill. African-American workers migrated from the cotton fields of Virginia to the communities around the mill, lured by the promise of a more integrated workforce. It didn’t quite materialize, and they found themselves trading the back-breaking labor of picking cotton for the lung-breaking life of the coke ovens. But even the worst jobs in the mill were often better than a life in the fields.
In the days before the Clean Water Act and the Clean Air Act, Bethlehem Steel consumed 861 million gallons of water a day — more than the entire metropolitan area of Baltimore could drink, according to “Roots of Steel,” Deborah Rudacille’s meticulously researched book about Sparrows Point. During the steel-making process, the water became contaminated with chemicals, including benzene, zinc, lead, sulfuric acid and even cyanide. The company took the water from the Patapsco River, which meets the Chesapeake near The Point, and supplemented its needs with treated sewage. When this was done, the company would pump the combined toxic brew back into the Patapsco, Rudacille reported. Those chemicals would linger in the sediments and mudflats, eventually killing The Point’s once-plentiful supply of crabs, hardhead catfish and oysters.
By the 1970s, Rudacille remembers, the pollution had grown so bad that her parents wouldn’t even let her dip her toes in the water.
The water was contaminated, but so was the land. Bethlehem Steel was built on filled wetlands. Sometimes the fill consisted of slag, a waste byproduct from the steel-making process. Groundwater, too, was loaded with toxins. The property also included several landfills. And the wastewater treatment plant frequently violated its permits. A 2009 environmental review revealed that the level of benzene in groundwater was 100,000 times the government’s allowable limits and that the wastewater treatment plant exceeded its limits for chromium and zinc by 5,000 percent.
The pollution proved harmful to many Bethlehem employees, especially the bricklayers, who were exposed to high levels of asbestos from their work maintaining the furnaces and coke ovens. In 1981, steelworkers filed the first of several lawsuits against the company. A decade later, a judge consolidated more than 10,000 asbestos-injury cases against the company. Peter Angelos, now famous for his work on asbestos-related illnesses (and famous for owning the Baltimore Orioles) represented the steelworkers. Almost 9,000 plaintiffs received a settlement, Rudacille reported.
In its heyday, Bethlehem Steel wielded tremendous clout, and regulators did little to force cleanups.
But over the last three decades, state environmental officials, as well as area residents and the Chesapeake Bay Foundation, have pushed for remediation. In 1997, Bethlehem Steel signed a consent order to remediate longstanding pollution at Sparrows Point. But just four years later, the company declared bankruptcy. The subsequent owners — Russian and Indian steel magnates, hedge fund managers and liquidation firms seeking to sell off the mill for parts — argued that they didn’t inherit liability for the cleanup. By the time a judge would rule, the company was sold again. The most the regulators could do was persuade a bankruptcy judge to force one previous owner, RG Steel, to set aside $500,000 to study contamination at Coke Point, one of the most contaminated areas.
The property has plenty of assets: waterfront, a turning basin for ships that offers 2,200 feet of berth, a railroad with 100 miles of track and a new cold mill the size of about eight Wal-Marts that could be used for new purposes. But on a recent visit to Sparrows Point, as Pedone watched workers dismantle a blast furnace the size of a skyscraper, and backhoes hoist rusted-out pieces of debris that were each about the size of a Ford Focus, the job seemed almost impossible.
Barbara Brown, the MDE’s Sparrows Point project manager, is optimistic — in part because her department has been working with the former General Motors assembly plant along Broening Highway to make a similar transformation. Though a smaller project, the GM plant is now an Amazon warehouse and has again become a viable employer.
Pedone, an attorney, comes from a long line of Sparrows Point employees. So does his wife. He is respectful, almost emotional, about the sacrifices his forebears made, both so he could have a better life and so the United States could succeed as a nation. Sparrows Point craftsmen made the steel for the Liberty ships that helped the United States prevail in both world wars. When Pedone finds artifacts from those bygone days, he puts them in a room in his office trailer, hoping to erect a museum to the hard-working men and women who dedicated their lives to steel. So far, he’s found photographs, signs and a pair of shoes worn in the coke ovens.
“I answer to a lot of people on this project, but my harshest critics are my own parents,” Pedone said. “I want to make my entire extended family proud.”