Report: Tradepoint Atlantic to provide $2.9B economic impact

(Photos by Maximilian Franz / The Daily Record)

The 3,100-acre multimodal industrial site Tradepoint Atlantic could mean as much as $2.9 billion in regional economic impact, according to a new report.

Sage Policy Group’s analysis of the multimodal industrial hub in eastern Baltimore County found the project is expected to create 17,000 direct and indirect jobs during the next 10 years. The report, which was commissioned by Tradepoint Atlantic, predicts the project will increase sales tax collection in the state by $73 million annually along with an estimated $26 million for Baltimore County.

Michael Moore, CEO of Tradepoint Atlantic, was not available for comment before deadline. In a news release he touted the report’s outlook as justifying the firm’s decision to acquire and transform the property tied deeply to Baltimore’s blue-collar identity.

“Over the next decade, we will continue to partner successfully with all levels of government to ensure this site realizes its vast potential in making Sparrows Point a regional focal point again,” Moore said.

More than 16 million square feet of space is expected to be delivered at the site by 2025. The final build-out is expected to require investment in excess of $2 billion.

So far the project has landed massive deals with firms including Under Armour, which is opening a 1.3 million-square-foot distribution and warehouse facility, FedEx Corp., which plans to occupy a 300,000-square-foot distribution building, and Pasha Automotive Services, which is leasing 21 acres, with a possible expansion to 150 acres, to run an auto terminal.

Ravi Srinivasan, assistant professor of operations management at Loyola University Maryland’s Sellinger School of Business, said the location of Tradepoint Atlantic gives it a leg up as a multimodal transportation hub.

“The things that are going for (Tradepoint) are (relatively) cheaper real estate prices … a large population base and having a port. It’s perfectly set for distribution facilities,” Srinivasan said.

Anirban Basu, of Sage Policy Group, said the only other project in the area with the same potential as Tradepoint Atlantic is the proposed redevelopment of Port Covington in Baltimore. That project involves transforming roughly 260 acres of underutilized industrial land into a massive mixed-use development.

“These two (projects) can actually alter the structure of the area’s economy,” Basu said.

But Basu warned Tradepoint’s overall impact could be hindered if the project only develops as distribution hub. What’s needed for Tradepoint to become a true economic powerhouse, he said, is to lure a major manufacturer for the site.

“Really it should be the goal to attract one very significant manufacturer to Tradepoint Atlantic,” Basu said.

Mark Levy, JLL managing director and Mid-Atlantic Industrial Practice Group leader, touted the project as having the potential to revolutionize the industrial market in the Baltimore metro area. Essentially, the construction of Tradepoint Atlantic, he said, is creating a whole new submarket. It will allow a traditionally land-constrained sector to provide a product size it hasn’t previously been able to offer.

“The evolution of this project is going to change the dynamics of the market place,” Levy said.

Manufacturing is a major component in the master plan guiding development of the site, Levy said. The site is more attractive for advanced manufacturing requiring a more skilled workforce than, for example, automobile assembly line.

“Manufacturing continues to be, ‘Who is going to give me something for nothing?’” Levy said.

Before the overhaul, the Sparrows Point site was home to steel manufacturing for more than a century. In the 1950s, when the mills were operated by Bethlehem Steel, it was one of the largest employers in the Baltimore area. Over the years deindustrialization took its toll until steel production eventually ceased in 2012.

As the steelmaking ground to a halt, state and local elected officials scrambled to find a way to rejuvenate a peninsula that was a symbol of the area’s once thriving economy. Tradepoint Atlantic, formerly Sparrows Point Terminal LLC — a joint venture of Redwood Capital Investments and Hilco Real Estate Co. — purchased the property in September of 2014. Shortly after the purchase, the new owners unveiled plans to transform Sparrows into a multimodal distribution hub that could include retail.

“This new study validates Tradepoint Atlantic’s potential as a dynamic economic driver for the county and the entire Baltimore region. Every business coming to Tradepoint Atlantic brings jobs and economic opportunity back to the Point,” Baltimore County Executive Kevin Kamentz, who could not be reached for comment because he was attending meetings in Annapolis, said in a news release.