◼ ECONOMICS Bloomberg Businessweek August 19, 2019PHOTOGRAPH:
CAMERON
DAVISON.
DATA:
BUREAU
OF
LABOR
STATISTICS
29SparrowsPoint lookedlike thebackdrop toa
dystopiansci-fiflickwhenRobertoPerezfirstlaid
eyes onit inthesummerof2012.Locatedalong
ChesapeakeBayinMaryland’sBaltimoreCounty,
the sitehousedwhatwasoncetheworld’sbiggest
steel millaswellasa shipyard.Scrapmetalandgiant
machinerylitteredthelandscape.Thesoilandwater
were lacedwithtoxins.
WhenheheardSparrowsPoint’sowner,RGSteel
LLC, hadfiledforbankruptcy,Perezchartereda
flight fromChicagoforhisteamtoseewhatcould
be salvaged.Ata minimum,hisemployer,Hilco
Global—acompanythatspecializesinsellingdis-
tressedassets—couldstripSparrowsPointforparts
and makea quickprofit.Perez,whoaschiefexec-
utive officerofHilcoRedevelopmentPartnersover-
sees thegroup’srealestateinvestmentactivities,had
aninklingtheremightbeotherwaystowringmoney
froma 3,100-acrespreadofindustriallandwithits
owndeep-waterport, 100 milesofshortlinerailway,
and easyaccesstoaninterstatehighway—allwithin
a day’sdriveofabouta thirdoftheU.S.population.
Lessthanthreemonthslater,Hilcoandan
investmentpartnerpurchasedSparrowsPointat
auction,paying$72million.“Itwasinsane,”Perez
says. “Weliterallyboughta city.”
Fast-forwardsevenyears,andSparrowsPoint
has beentransformedintoTradepointAtlantic.
Amazon.comInc.andUnderArmourInc.—the
sportsclothierrunbyBaltimoreboosterKevin
Plank—haveleasedalmost2.5millionsquarefeet
of warehousespacebetweenthem.Othertenants
includeFedEx,Volkswagen,andHarley-Davidson.
OfficialsatTradepointareprojectingthatprivate
investmentwillreach$2billionbythetimethe
operationisatfulldevelopmentin2025.About
4,000 workatthesiteatpresent,countingcon-
structioncrews.Totalemployment,a figurethat
includesindirectjobsgeneratedbytheproject,is
expectedtoswellto17,000ina fewyears’time.
SparrowsPointismorethana taleofrevival
on thedoorstepofa citythatDonaldTrumphas
reviledasa “disgusting,ratandrodentinfested
mess.”It’sa counternarrativetothepresident’s
Make AmericaGreatAgainformula,whichprivi-
leges manufacturingaboveotherindustries.Here
on theedgeofBaltimore,a RustBeltcitythatwas
hollowedoutbyforcesofglobalization,services
suchase-commerce and logistics are powering arenaissance. The majority of the businesses that
have set up shop at Tradepoint aren’t trying to roll
back decades of trade liberalization. They’re thriv-
ing because of it. Trump often rails about the size
of America’s trade deficit. What he doesn’t mention
is that the U.S. consistently logs a large services sur-
plus with the rest of the world.
“When you think about it philosophically, you
had the steel mill and the conversations about the
global economy impacting American industry and
putting it on its knees,” says Tradepoint spokes-
man Aaron Tomarchio. “Now this place has a global
footprint, and the global economy is helping fuel
the success here.”
In Sparrows Point’s glory days, the blast furnaces
owned by Bethlehem Steel Corp. supplied metal for
the Golden Gate Bridge and Empire State Building.
Boats welded at the shipyard helped America win
both world wars. At the peak in the 1950s, workers
numbered more than 30,000. There was a company
town, complete with a hospital, schools, stores, a
streetcar line, and a cemetery.
Alan Thompson worked at the steel plant from
1995 until it closed in 2012. “It was flames every-
where, sparks flying, molten steel,” he recalls. The
hulking monster produced smog and red dust that
blanketed the town, plus a tremendous amount of
noise. It was “music to my ears,” says Thompson,
61, whose father was born in the Bungalows section
of the town and later found employment at the mill
and the shipyard. “That means a lot of people are
makingmoney!”
JerryErnest,68,alsofollowedhisfatherinto
thesteelmill—andstayedfor 43 years.It couldbe
dangerouswork.Herememberslosingthreecol-
leagues,includingonewhotumbledintoa vat
ofhydrochloricacid.Butwagesweremorethan
decent,andtherewasfreehealthcareanda pen-
sion.“Itwasa goodjob,”Ernestsays.“Noonereally
understoodhowgoodit wasuntilit wasgone.”
Thebeginningoftheendcamein2001,when
BethlehemSteelfiledforbankruptcy,blamingcom-
petitionfromcheapimports,spiralingdebt,and
cripplingpensionobligations.Overthenextdozen
years,SparrowsPointchangedhandsseveraltimes.
(Atonepointit belongedtoWilburRoss,thevet-
erandealmakerwhomTrumpdraftedtobehiscom-
mercesecretary.)RGSteelcompleteditspurchasein
March2011;thecompanyfiledforChapter11 protec-
tionjust 13 months later. By that time the number of
employees had dwindled to just 2,000.
Hilco arrived with low expectations. More than a
century of steelmaking had left the area badly pol-
luted. Refuse from the steel furnaces called slag was
dumped so frequently into the Chesapeake Bay◀ Sparrows Point
before Hilco bought it
in 2012● A modern distribution hub
is rising up from the ashes of
old industry1990 2018180%120600-60● Changein numberof
U.S.workerssince 1990
Warehousingand
storage
Ferrous metal
foundries