Union: Verbal agreement to sell Georgetown steel mill

South Strand News, Tommy Howard news@southstrandnews.com - James Sanderson, the president of Local 7898 of the United Steelworkers Union claimed on April 19, that there is a verbal agreement in principle for Arcelor-Mittal to sell its Georgetown steel mill to Liberty House Group LLC of London, a British-based steel company.

On Wednesday morning, April 19, Sanderson told the Georgetown Times, "There is somebody that will be buying the plant." He said he expected a commitment within a week.

Later that afternoon, Sanderson told the Times that there is a verbal agreement to sell, and he identified the purchaser as the Liberty House Group LLC.

However, Mary Beth Holdford of Arcelor-Mittal responded to the Times in an email with a different take on the agreement.

"There is NO agreement at this time," she wrote. "I'll be in touch as soon as we have something to share."

Jessica Beeken, a spokeswoman for Liberty House Group LLC spoke with the Times from her office in the United Kingdom early Thursday morning, April 20.

"We have no information," Beeken said. "We're trying to track down one person who might have information, but have not been able to reach our client on this matter."

Sanderson said news of the agreement has steel workers hopeful that the mill will reopen soon.

"The steelworkers are ecstatic and very proud that they will be making steel again," Sanderson said.

He acknowledged there was no written agreement as yet, but said "there will be a written document, probably on Thursday (April 20)."

When Arcelor-Mittal closed the wire rod steel mill on July 24, 2015, more than 200 workers lost their jobs. The company said it had no plans to reopen the steel mill.

Public officials' comments

Rumors around town Wednesday morning were that the steel mill had been sold, but Sanderson said then - that wasn't the case as yet.

Georgetown City Administrator Paul Gardner said Wednesday afternoon, "I have heard nothing about it." He added, "(Sanderson) has a level of insider knowledge that I don't have."

"I have no knowledge that a transaction is imminent. But, I don't have anything to refute what Mr. Sanderson has said."

When contacted Wednesday evening, Gloria Bromell Tinubu, the city's economic development director said, "We have no information regarding that (sale), and until there is a contract, we have no comment."

Brian Tucker is the Economic Development Director for Georgetown County, and he said he was unaware of any agreement to sell the mill.

"I have not heard anything from anybody," he said Wednesday night. "At this point, I don't know anything to comment on. We have not had any conversations with anybody about the matter."

"They clearly have not talked to us about property tax abatement, incentives or any other specifics," he said. "I would need to sit down and have a conversation with a buyer, and find out his plans."

"We've gone through this a half-dozen times in the last four months," Tucker continued. "We continue to not be notified, so it's hard to take a position."

Georgetown Mayor Jack Scoville spoke with the Times late Wednesday evening.

Initially he said, "My comment would be, I can't really comment." As several others said, Scoville noted that there has been talk before about a pending deal, but so far, it hasn't happened.

"If that's the case (a sale), we certainly hope they will be bringing a lot of well-paying jobs."

The processes of rezoning and the ULI concept will go forward, Scoville said.

"The worst thing that could happen would be for the mill to sit there unused. Whoever buys the mill, it would only be fair to begin the process."

The zoning amendments as proposed allow for a "grandfather clause" if the owner of the property has an operating mill. A new owner "would be required to start operating within one year," Scoville said.

"I can't imagine anybody in town would say they want the mill to just sit there."

City Council members comment

Some members of Georgetown City Council shared their thoughts.

"I have heard that rumor quite a bit over the past few weeks," City Councilman Al Joseph said Wednesday evening. "In conversations with Arcelor-Mittal, they have confirmed that they had conversations with several companies that are interested in the property. …

"They have told us there is no contract on the mill. Some parties are looking at it as a steel mill and others, not. Until I have confirmation, it's speculation - it's rumors."

Brendon Barber said, "If it's a sale, I am in support of it. It gives us jobs right away and could bring in other industry to the town."

"I voted against rezoning because I didn't think there was a clear-cut legality of rezoning private property. There's some gray area."

"We have a lot of families who have to eat now," Barber said. "In the short term, it's good. In the long term, it could bring in some high-tech industries."

Sheldon Butts was the most enthusiastic of the City Council members who talked with the Times.

"I think it is a great idea," he said. "This will put people back to work with more than minimum pay and with benefits that will help them take care of their families."

"I strongly believe that we have an opportunity to move Georgetown forward with the ULI study," Butts said.

"If we bring the stakeholders, the new owners, to the table and convey to them what our vision is and how they can assist with that. We can ask for the sky and see what we will get."

"We have to get them (the new owners) to the table from the outset – that's the right thing to do," Butts said.

Liberty House Group LLC

The company that Sanderson said is planning to buy the Georgetown plant is headquartered in London. Liberty House Group LLC calls itself a "fully integrated global supplier of steel and engineering solutions." The company is a $7 billion global industrial group.

One of the British company's subsidiaries is Liberty Steel. The overall company announced on April 11 that it has launched its new Specialty Steel business. The group has made an offer to buy Tata Steel UK Specialty Steels, which employs about 1,700 people in the north of England.

In February, Liberty House Group and Tata Steel UK signed a definitive agreement, which is pending regulatory approvals. The purchase price is about $128 million.

The acquisition of Tata Steel UK is part of a plan to grow the business, building markets not only in the United Kingdom but around the world.

"Specialty Steels will play a pivotal role in achieving our overarching Greensteel vision and we are appointing a management team of the highest caliber to lead this crucial operation," Sanjeev Gupta, executive chairman of the Liberty House Group, said on the company's website.

Restarting the Georgetown mill

Sanderson said he was not aware of the formation of Specialty Steels, but said he believes the Georgetown plant would be a good fit for the prospective buyer.

He said workers at Georgetown have produced 450 to 500 million tons of steel rod per year.

Sanderson said he expects a skeleton group of people would first go back into the mill to get an overview of the mill and its equipment and condition.

"Within six months of the plant reopening," Sanderson said, he "expects there to be from 250 to 300 high-paying jobs."

Rezoning and Redevelopment

Over the past year there has been an effort to determine the best use for that property. The City of Georgetown invited the Urban Land Institute to come to Georgetown, which happened in September 2016. After significant study, ULI personnel issued a list of recommendations gleaned from their work and input from about 800 people in the community.

The recommendations included rezoning the steel mill property from Heavy Industrial to a new mixed use or "Redevelopment District" category. That ULI conceptual plan included a total of about 150 acres. The district would add in property including the Port of Georgetown, land owned by Arcelor-Mittal and other some other businesses.

The City of Georgetown Planning Commission will have a public hearing on Tuesday, April 25, at 6 p.m. at Georgetown High School, 2500 Anthuan Maybank Dr. During the meeting, members of the public may sign up to speak for up to five minutes each. The new zoning would be called Redevelopment District (REDD).

Following the public hearing, the Planning Commission will consider the text changes to the city's zoning ordinance.

"There is no immediate rush," Sanderson said. "Because [the city] cannot realize the benefits of ULI until 15 to 20 years. I would suggest the city defer action until the mill is sold."

"The city could still make a plan and work for the future. But, I will not understand why people would want to stop jobs."

Sanderson was among the community leaders who provided input for the ULI process. He's looked at some of the information for the proposed rezoning district. "I'm not a zoning expert. I know it's complicated," he said.

"There are several areas that have to be addressed. Arcelor-Mittal will not sit idly by. There is more value to an operating plant," Sanderson noted earlier in the day Wednesday.

"I know we plan to have somebody from Arcelor-Mittal attend the Planning Commission meeting on April 25." That would be someone from the company's corporate office, he added. … Currently there are a few employees here in Georgetown."

Sanderson was pleased with comments made by U.S. Sen. Lindsey Graham (R-SC) when he visited Georgetown on Monday. Graham said he is in favor of the steel mill reopening, Sanderson related. "I was extremely delighted to hear he's in favor of that."

"If it does not reopen, then the city could move forward with ULI. That is what he (Graham) was saying."

The 200-plus employees who were working at the steel mill when it closed will continue to get "sup pay" (supplemental pay) Sanderson said, until July 24, 2017. They also will continue to get health insurance coverage at no cost for up to 40 months. The union's contract with Arcelor-Mittal expires Sept. 21, 2018. Those benefits are paid to the union workers even though many of them have secured work with other employers.

When Arcelor-Mittal closed the plant in July 2015, Sanderson said there were 172 hourly workers in the mill. There were more than 30 salaried people. In addition, there were a number of other people who worked at the mill but who were contractor's employees and not paid by Arcelor-Mittal.

Of those people who lost their jobs about 21 months ago, Sanderson said probably 15 of the salaried workers would come back when the steel mill reopens. For the hourly people, he estimated 65 to 70 percent would come back. That would be about 110 to 120 returning hourly workers.

"Win-win situation"

In a telephone interview late Wednesday night, Sanderson told the Times that he thinks the reopening of the steel mill won't stop work on the ULI conceptual plan. In the meantime, he expects there will be "instant jobs" for many people at the mill.

"I think it will probably take one-and-a-half to two months to get things rolling. They will probably bring in a skeleton crew to check things out."

"I think everyone in Georgetown should be excited about it, that jobs will be coming back."

He gave a lot of credit to Vic Sharman for making a sale possible.

Sharman previously worked for Sharon Steel. "He brought Liberty House Group to it," Sanderson said.

"He came in and looked around in early 2016, to buy equipment" at the closed Georgetown plant. Sharman liked what he saw, saying "this could be operational. It would be a good investment."

Because of that, Sanderson said, people came to Georgetown from Liberty House Group. "I toured the mill with them, I believe in October 2016."

Once there is a written agreement and then the plant begins production, Sanderson said, "It will be a unionized plant. They would have to have a contract with us, with good wages and good benefits."

Speaking of the former employees, Sanderson said "These are very proud steelworkers. They love making a good, quality product."

"There is no doubt Donald Trump's position on trade influenced Liberty to purchase it."

"I have sent a request to the White House to have Donald Trump stand at the gate to the mill and welcome the workers back to work," Sanderson said.

"He realizes how important labor was to get him elected. If it wasn't for his trade position," Sanderson said, there might not be a sale of the mill.

"I don't blame City Council at all for wanting to have a vision," he said, referring to the ULI conceptual plan for redevelopment.

"When the plant opens back up, they should not stop working on ULI. They need to be preparing for whatever happens in the future. They can start building a relationship with the new owner."

"This is a win-win situation," Sanderson said. "The mill can reopen and ULI can go forward."

"Any time you can have instant jobs, you need to jump at the opportunity."

Sanderson noted that the United Steel Workers has "a successorship clause with Arcelor-Mittal." That means a new owner would have to reach an agreement with the union.

"If we don't get a contract with them, we can block the sale," Sanderson said. "We have a contract with Liberty House."

Writer Anita Crone contributed to this story.

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