Tuesday, September 17, 2013WARREN, Ohio -- In two years hence, little is likely to remain of a manufacturing complex that for a century turned out steel in the Mahoning Valley.
Demolition plans were approved Thursday and the first permits were issued Friday to level portions of RG Steel’s cold mill operations in Howland Township, which were left vacant since the company filed bankruptcy and auctioned off a portion of its assets, reported Kim Mascarella, township planning and zoning director.
A timeline submitted by BDM Warren Steel Operations, the former owner of the property, calls for the cold mill’s demolition to be finished before the end of this year and the hot mill section, that is, the part of the plant where its blast furnace and caster operated, to be razed by June 2015.
“Our role in Howland Township is to see that they comply with zoning regulations,” Mascarella said. Under normal circumstances, a property owner has 60 days to complete with demolition once permits are issued. However, because of the complexity of this particular project – the property consists of hundreds of acres plus a score of old industrial buildings – township trustees agreed on the owner’s expressed timeline.
On Monday, workers were busy taking down portions of the plant just inside the entrance off Pine Street in the city of Warren.
“This is a project that affects multiple jurisdictions,” Mascarella said. A large portion of the cold mill lies in Warren Township, another large section is in Howland, while another is in the city of Warren. Most of the hot-strip operations were in Howland, she said.
The first phase of the project would concentrate on the cold mill operations, which should be completed by December, Mascarella noted. Simultaneously, environmental and asbestos studies would begin on the hot mill. Much of that demolition work could be completed as early as next summer, but the timeline extends the remediation project through July 2015.
Mascarella added that Howland also wants to ensure the concrete floor slabs of all of the buildings are removed once the structural demolition is finished. Demolition permits were issued on seven buildings in the cold mill section. There are probably eight to 10 more on the hot mill side, she added.
“The township wants to see this property restored to high functioning, landscaped green space,” so the property could be marketed for another user, the planning and zoning director said. “The slabs need to come out, and there are a substantial number of them,” which will add to the cost of demolition project. However, BDM has also hired a brownfield redevelopment consultant to ascertain whether the slabs could be repurposed.
The demolition permits – especially for the hot mill operations – almost assure that the mill will not reopen, a fate that’s hung over the operations since RG Steel declared Chapter 11 bankruptcy in May 2012.
BDM Warren purchased the mill out of bankruptcy last year for $17 million. At the time, its president, Charles Betters, said that he would attempt to market and find a buyer for the complex, especially the “hot” operations.
In May, Hilco Global purchased the steelmaking assets from BDM, which allowed some time for a buyer to step forward, added Darryl Parker, president of Local 1375 of United Steelworkers of America, which represents 1,000 members who once worked at RG Steel.
“It’s a sad reality,” Parker reflected. “I’ve advised members to go on with their lives and not to count on it reopening.”
Under an agreement with the bankruptcy court, BDM was compelled to “winterize” the hot-strip manufacturing section of the mill as a search for a buyer continued. After the sale to Hilco, an agreement was reached that Hilco would market the hot portion of the mill for three months in an attempt to find a buyer.
However, Parker said, the cost to maintain and refurbish equipment such as the blast furnace and basic oxygen furnace – the heart of the plant’s steelmaking operations – are so immense that it’s unlikely any buyer would step forward in the coming months.
There was some speculation that Betters would bring an electric arc furnace from another RG Steel plant in Wheeling and install it in Warren, but the deal must have fallen through, Parker noted.
“There were a couple of bites,” Parker added, “none of them really serious.”
RG Steel’s Warren plant employed about 1,100 when it shut its doors. “It’s devastating to our workforce and our community,” Parker remarked. Portions of the plant date to 1912, when the mill opened as Republic Steel.
The union leader said he feels especially bad for some of the younger members who hadn’t built enough seniority to retire or secure pensions, albeit now through the U.S. Pension Benefit Guaranty Corp. He said about 250 of his membership have found other jobs, but are commuting longer distances. Another 250 or so have enrolled in the federal Trade Adjustment Training program and are in school learning new skills and a new trade.
The rest have either retired or are awaiting the mill to reopen, Parker reported.
“I’m telling members they need to move on with their lives,” the union president said. “If anything even happens there, they’ve got to understand that it won’t be the same. It will be an entirely different scenario.”
Copyright 2013 by The Business Journal, Youngstown, Ohio.
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