042717 Steel mill: ArcelorMittal will fight rezoning in court, VP says
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Liberty House Group announced last week it wants to buy and restart the mill that closed in 2015.
Tanya Ackerman/Coastal Observer

Steel mill: ArcelorMittal will fight rezoning in court, VP says

By Charles Swenson
Coastal Observer

The owner of the Georgetown steel mill will go to court to block a zoning change that will allow redevelopment of the city’s industrial waterfront if it stymies a deal to sell the facility. An ArcelorMittal executive called the rezoning “a death sentence for our agreement.”

“If this ordinance is passed, and causes the potential buyer – or other potential buyers – to walk away because operations are impossible from a business standpoint, we will have no choice but to pursue legal action for the inverse condemnation damages we will incur,” said Keith Nagel, the vice president at ArcelorMittal who is responsible for the mill.

Last week, ArcelorMittal and Liberty House Group, which owns three steel mills in Scotland and Wales, announced they had reached agreement on the sale of the 47-year-old mill. It has been closed since August 2015.

The city of Georgetown and Georgetown County began a partnership last year to promote the redevelopment of the 60-acre site and the adjacent State Ports Authority property on the Sampit River. A study team from the Urban Land Institute prepared a set of recommendations for mixed uses on the site.

At a series of public hearings earlier this year, former steelworkers told officials the mill is still viable. The announcement of the pending sale underscored that argument. “Our agreement in principle with ArcelorMittal opens the door to the eventual restoration of several hundred jobs, both directly and in the supply chain, and it gives this region’s economy a new industrial focus,” said Sanjeev Gupta, who founded the company in 1992 as a trading firm while still a student at the University of Cambridge.

In its last year of operation, the Georgetown mill had 207 hourly and salaried employees. At full capacity, there were over 300, according to company figures. The mill makes wire rod. ArcelorMittal, a multinational steelmaker based in Luxembourg, closed the mill to focus on its core “flat carbon” products in the U.S.

ArcelorMittal began looking for a buyer even before the closing, the company said in a statement this week. “Due to ongoing and confidential discussions with potential buyers, no further details were made available until the announcement on April 21,” the statement read. “It is important that the community understands that negotiations such as these take time, patience and confidence among all parties.”

Nagel, who prepared a statement for the city Planning Commission hearing on the redevelopment, said the company preserved the mill for a restart. “Our hope was to recover as much of our investment as possible and restore high-paying jobs and economic activity to the city.”

He said the redevelopment plan, which would allow the phase out of the heavy industrial use, “is not realistic.” It wouldn’t allow improvement of the facility or guarantee future operations, Nagel said.

County officials question whether the plan to restart the mill is realistic. “Everyone we have spoken to in the industry sort of scratches their head,” said Brian Tucker, the county’s economic development director. “We were told when they closed two years ago the steel industry just doesn’t make sense on that site. We haven’t seen anything that contradicts that.”

The closure of the mill was one reason Georgetown County has backed away from a project to dredge the shipping channel through Winyah Bay. A capital projects sales tax approved by voters in 2014 had dredging at the top of the list. But the cost estimates for the work soared in the weeks after the referendum and the likelihood that the mill would provide cargo for a deeper channel plunged.

Neither the county nor the city have spoken with anyone from the steel companies about the sale. “City officials have reached out to Liberty House Group to open a dialogue regarding its plan for the mill, a timetable for the reopening and ways the city may assist the company while protecting the interests of all the citizens of the city,” City Administrator Paul Gardner said in a statement Tuesday. “As of this writing, Liberty House Group has not communicated with any city, county or state officials about their plans for the site.”

ArcelorMittal says the choice is between “upwards of 275 high paying jobs” now or “a lofty redevelopment plan” that will take 20 years to achieve. But Tucker said that the employees who left the steel mill were snapped up by other manufacturers in the county. “Those employees have an amazing skill set, an in-demand skill set,” he said. When the mill closed “the unemployment rate never ticked up.”

And Tucker added, “my job is to bring jobs. If I thought it would create a large chunk of long-term jobs, I would be dancing the dance.”

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