Evidence of what was once the largest steel plant on the U.S. East Coast has rapidly disappeared as distribution centers begin to cover the 3,300-acre site near Baltimore.
Six years ago, industrial real estate developers Hilco Real Estate and Redwood Capital Investments acquired the former Bethlehem Steel plant property at Sparrows Point, Maryland, and began to transform the site through their joint venture, Tradepoint Atlantic.
After several years of remediation, the first distribution centers began to emerge on the site. Since then, 9.3 million square feet of the property has been developed, with a third of that amount built during the past year.
“It’s really taking off now,” Aaron Tomarchio, Tradepoint Atlantic’s senior vice president of corporate affairs, told American Shipper. “We have another 4.4 million square feet in various stages of development.”
Tomarchio attributed this increased demand for regional distribution centers to companies scrambling to meet rising consumer demand for e-commerce services.
When Tradepoint Atlantic achieves about 16 million square feet of development, the real estate developer estimates that 75% of the former steel plant site will be occupied.
Tomarchio said the transformed Sparrows Point has become an “inland” port, so to speak, to the Port of Baltimore, located just 7 miles away along the Chesapeake Bay. Containerized cargo arriving at the Baltimore docks can be trucked to newly constructed distribution centers at Sparrows Point.
Sparrows Point is located within a day’s drive from about a third of the country’s population, Tomarchio said. The site also is directly accessible by Class I railroads CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC) and offers deepwater marine vessel access.
The Tradepoint Atlantic Industrial Park has, so far, attracted a half-dozen major shippers and third-party logistics service providers to set up Northeast distribution centers at Sparrows Point.
Last year, Atlanta-based Floor & Decor (NYSE: FND) committed to constructing a 1.5 million-square-foot distribution center at Sparrows Point to support the expansion of its Northeast business. The facility is expected to open in 2023.
Recently, spice and flavoring giant McCormick & Co. (NYSE: MKC) said it will lease a 1.8 million-square-foot facility to serve as its new Northeast distribution center, starting operations in mid-2022.
The success of the site has persuaded Amazon to upgrade and expand its existing facility at Sparrows Point. “When completed, the center will encompass nearly 1.4 million square feet of usable space, allowing Amazon employees to pick, pack and ship larger customer items, such as bulk paper goods, sports equipment, patio furniture and larger home goods and electronics,” Tradepoint Atlantic said.
Sparrows Point has also drawn the attention of shippers with ocean transportation requirements. The former Bethlehem site came with its own 1,500-foot marine terminal for bulk and breakbulk shipments and in 2018 received a $30 million federal grant for upgrades.
The marine transport attributes of Sparrows Point attracted Volkswagen Group of America (OTCMKTS: VWAGY) to set up a 115-acre vehicle-processing facility that is served by roll-on/roll-off vessels. The facility will handle about 120,000 vehicle imports annually. The vehicles will be distributed to about 300 dealerships in the mid-Atlantic region.
Ørsted U.S. Offshore Wind signed an agreement with Tradepoint Atlantic last year to develop a wind turbine components staging area to support construction of the Skipjack offshore wind farm that will be located 19.5 miles off Maryland’s coast.
Sparrows Point also offers a shipyard. In June, BAE Systems (OTCMKTS: BAESY) transported its 950-foot-long-by-192-foot-wide dry dock, Titan, to the shipyard to undergo a five-month repair and maintenance program. “We’re working on fully integrating the shipyard into our plan,” Tomarchio said.