New life for steel site
Property draws potential buyers
Trending
WARREN -- It has been less than a year since the iconic blast furnace at RG Steel on Warren's south side came tumbling down, taking with it nearly 100 years of history and community identity.
The mill, which began operation in 1912 as Trumbull Steel Co., went through several owners and endured periods of economic decline -- sometimes steep -- all while providing employment for generations of local blue-collar workers.
Now, the property's owner and the economic development steward, the Youngstown Warren Regional Chamber, are working to resurrect the mill site between Pine Avenue SE and Main Avenue SW by remediating the harmful environmental legacy left by decades of steel making and showcasing the site to potential investors.
Already, two potential industrial users have listed the site on their short list of possible locations.
To get to this point, BDM Warren Steel Holdings, which owns the property, has invested more than $10 million to remediate the property, said Michael Bechtold, executive vice president of Brayman Construction Corporation, the company involved in the cleanup effort.
"We felt it was our obligation to clean up the site," said Bechtold, adding the company did not use state dollars on the cleanup. "We wanted to start with a clean slate."
BDM placed 142 wells around the site to test groundwater to comply with environmental regulations. The process was completed in early 2018. Bechtold also said landfills had to be cleaned, as they had been out of compliance since 2010.
But the most difficult job, Bechtold said, was the cleanup of several retention ponds that were once full of oil. The ponds had to be dug up, dredged and filled with clay to mask the vapors that would otherwise escape.
Bechtold said BDM is not trying to "flip" the property, as evidenced by the investment the company made in the cleanup.
MARKETING THE LOCATION
Charles J. Betters of C.J. Betters Enterprises, who heads BDM, said the site contains brownfield and greenfield tracts of land and has highly marketable traits, including a CSX railroad line and three power lines entering the site that can provide an enormous amount of electricity for industrial use.
BDM's remediation effort also makes the property more attractive to potential investors.
"There is an aggressive and capable property owner that has already gone through redevelopment of another site," said Sarah Boyarko, chief operating officer for the chamber, referring to BDM's similar work on a site in Aliquippa, Pa. "They took on a risk and did a phenomenal job."
In addition, the property has been declared an opportunity zone by the state of Ohio, a designation applied to economically-distressed communities where investments may receive advantageous federal tax treatment, which could allow an investor to write off the cost of the properties in the first year.
Boyarko said the chamber invited regional development professionals from Cleveland and Akron earlier this month to visit the site and strategize on marketing techniques.
Deb Janik, senior vice president of business and physical development for the Greater Cleveland Partnership, recalled her first impression of the site.
"What's striking is the simple vastness of the site," said Janik, who thinks a steel manufacturing facility or warehouse would be the ideal use for the property.
While Janik was impressed with the size of the site, she also said it could be a drawback for companies because of maintenance and management challenges.
"Sometimes there's a tendency to shy away from the challenges around a site so big," she said.
While there also may be a perceived stigma attached to former brownfields, Steve Lazarides, senior associate at CBRE, a site consultant firm in Akron, said that should not be a negative factor in marketing the site.
Lazarides said having the weight of the local development authority behind the site will show companies coming in that they can expect a warm welcome.
The 250-acre developable brownfield has a list price of $50,000 per acre and can be leased or purchased. The land is divisible and is zoned for foundries and heavy manufacturing plants. The greenfield, which occupies 267 acres, is listed at $30,000 per acre and can also be divisible. It is zoned as industrial vacant.
"To be able to turn the page and open a new gateway to new development, to see something on that scale is pretty exciting," Lazarides said.
NEXT IN STORE
Regional Chamber officials said activity and interest in the site are "peaking."
The organization has given 14 tours of the property since January and it remains on the shortlist for at least two companies, but the chamber is hesitant to state publicly which two. Interest, however, has come from state, national, and international companies, according to the economic development team at the chamber.
Despite the interest, some issues, such as the fate of a railroad line near the property and the completion of environmental cleanup, still need to be resolved.
The rail line -- part of a nearly 14-mile line that runs from the Niles area to the Newton Falls area -- has sat idle for two years, but remains a potential high selling point for interested parties.
Janik said the presence of rail was one of the first things she noticed.
"It provides connectivity to the surrounding area," said Janik, who said the site is just "brimming with opportunity."
Several companies inquiring about the property have expressed a need for rail, Boyarko said. CSX, however, wishes to abandon a nearby rail line.
BDM filed a notice in June with the federal Surface Transportation Board to purchase the rail from CSX for $700,000. Previously, Trumbull County had entered into negotiations with the board to use the property near the rail line as a bicycle path.
The board is reviewing BDM's purchase proposal. Experts say it is possible for nearby land to be used as a bicycle trail while BDM utilizes the rail line.
Additionally, while much has been done to clean up the site, more work remains.
Bechtold said the biggest remaining project is to address the brownfield's impacted soil. The soil needs to be dug out and the area deemed a "restricted use" said Bechtold.
He also said the company's remedial action plan needs to be approved by the state.
STEELMAKING AT THE SITE
Steelmaking at the site began 106 years ago, first under Trumbull Steel Co. A blast furnace was opened 10 years later, and as the mill added a basic oxygen furnace and a coke battery over the decades, ownership also changed.
Republic Steel -- the company that assumed the name of the mill in 1930 -- merged with LTV in 1984, but two years later, the company filed bankruptcy. The Renco Group Inc. bought the mill and renamed it Warren Consolidated Industries Inc., or WCI.
Labor tensions flared up in 1995, when the 1,700 members of United Steelworkers Local 1375 launched a violent strike over pensions.
Over the coming years, WCI would file bankruptcy, from which it emerged in 2003, and sold the mill to OAO Severstal in 2008.
Workers endured layoffs and idling of the mill into early 2010. RG Steel LLC, a new entity of the Renco Group, bought the mill in 2011. In September 2012, RG Steel declared bankruptcy, leaving 1,200 employees out of work.
Later that year, BDM purchased the mill for $17 million and began searching for a buyer. In November 2013, Betters spent nearly $1 million to winterize the mill, protecting it against freezing temperatures that would have damaged it beyond repair.
With no buyers in sight, BDM auctioned parts of the mill in spring 2013 and began tearing down buildings on the Pine Avenue side of the mill. In June of that year, BDM enlisted Illinois-based Hilco Trading Co.'s help in marketing the property.
Having failed to find an owner, BDM deconstructed the basic oxygen furnace that stood along Pine Avenue in 2016. In July of that year, deconstruction of the blast furnace began.
ckromer@tribtoday.com