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April 11, 2000

Will Theodore Finally Get A Steel Mill?

by Bill Patterson

Three decades ago, the president of the Mobile Area Chamber of Commerce predicted that Theodore, Alabama was about to become a second Birmingham. At that time Birmingham was a center for steel making. The Chamber leader boasted, in a 1968 speech, that the new Theodore Industrial Park would become a center for "iron ore reduction foundries, industrial castings, motor blocks, steel mills, rolling mill, plate mill, bar mill, wire mill, aluminum smelter, aluminum plate mill, oil refinery, petrochemical complex, oxygen and nitrogen plant, intermediate chemical complex, and wood products plants."

The Chamber of Commerce was enthusiastic because a company, McWane Cast Iron, had announced it would build a plant in the new industrial park. Mobile business leaders particularly longed for heavy industry in the mid-1960s because the Pentagon had just announced it would close Brookley Air Force Base. But the McWane mill had technical and financial problems from the day it opened in 1969, and the $15 million plant shut down a few years later. It would be nearly thirty years before steel makers sought out Theodore again. Two years ago, British Steel opened an iron ore processing plant in downtown Mobile, and in early 1999, IPSCO, the Canadian steel maker, announced it would open a large steel mill -- but not in Theodore. The IPSCO facility will be in north Mobile County at Axis.

It now appears Theodore will finally get a mill. A local company, Mobile Metals International, announced last year it would open a steel mill in the Theodore Industrial Park. The MMI plant will use a cold rolled process. The company chose a site on the Theodore Industrial Canal, a site next to the tank farm for the new phenol plant. ADEM approved MMI's applications for air pollution permits and the Alabama State Docks promised to build a dock for the company. But MMI has apparently changed its plans and will build its steel mill on land at the former Naval Station Mobile. The 200-acre homeport facility reverted to the State Docks when the Navy abandoned it in the mid-1990s, and the State Docks changed its name to Middle Bay Port. Neither MMI nor its main financial backer, Tippins Inc. of Pittsburgh, Pennsylvania, would talk to The Harbinger about the project.

Jim Lyons, the director of the Alabama State Docks, spoke with The Harbinger about MMI. He said there is " a very, very high probability" that MMI would locate at Middle Bay Port. Lyons said the "deal is not 100 percent complete," but it would be complete in "the next couple of months." MMI will take a 20-year lease on a tract within the former homeport, Lyons stated, adding, "MMI is already at the homeport now using the administration building." He said the State Docks will spend $6 to $8 million to modify the existing pier at the homeport to handle cargo for MMI. He said the Docks had done "no formal cost benefit study" on the MMI project, but that the Docks would quickly get its investment back through charging "handling fees." Asked who will make the final decision on whether to lease the site to MMI, Lyons said that all leases longer than one year "go to the Governor." He believes the old homeport is "a lot better site" for MMI because it already has utilities and a rail line is "complete to within 100 feet of the property line as opposed to one mile away at the other site." Lyons also emphasized the "deep water frontage" of the location.

Bay Front Steel Mill

Last week The Harbinger spoke with Doug Carr of Air Division at ADEM. Carr said that, while ADEM had already issued MMI an air pollution permit for its site beside the tank farm, the company would need new permits if they moved to the homeport site. "Each permit is site specific," Carr stated. He said ADEM had not received a new application, though he added he had received calls from residents asking if the company had done so. Any new permit would require a public comment period.

The Harbinger also asked about the existing air pollution permit for the MMI mill. Carr said the company was issued "a synthetic minor operating permit." He explained the company, to qualify as a minor source, would have to limit their emissions of any Hazardous Air Pollutant (HAP) to under 10 tons per year. The principal HAP at the MMI mill would be hydrochloric acid. A second restriction is a limit on the hours the plant can operate. Carr said MMI pledged to limit their hours of production. "While the total possible hours of operation in a year would be 8760, they will only operate 6300," Carr said. Asked how ADEM would monitor this, he said the company would be required to keep a log which could be checked by ADEM. He said if MMI had not accepted these restrictions, the company would have had to apply for a Title V operating permit, a much more costly and time-consuming process.

Casi Callaway is director of Mobile Bay Watch, the environmental group. She told The Harbinger the group's attorney had appealed the MMI air pollution permit to the ADEM Commission. Callaway said the Commission had turned down Mobile Bay Watch's appeal. She said her group appealed because it believed the permit was not strict enough. Callaway indicated the environmental group would decide soon what their next move would be regarding MMI.

MMI recently asked to meet with Mobile Bay Watch, Callaway said, and the environmental group met several times with the company. She added that the company then "came back with Maximum Available Control Technology," a commitment Callaway described as a "major victory." But she added that Mobile Bay Watch still intends to fight any ADEM permit for MMI because "that's what our members want." Callaway indicated the group intended to "sue everyone with new air emissions" until an air quality study is completed for Mobile County. Within the past year, Mobile Bay Watch, representatives from industry and government officials announced plans for a major study of air pollution.

Callaway said she now wonders if MMI will ever build its steel mill. She said she was told by an official at the Mobile Chamber of Commerce that MMI "ran out of money." The Harbinger asked what Mobile Bay Watch thinks should happen to the former homeport site. Callaway said, "it's time to cut losses." Government should dedicate the site to non-polluting activities such as education and training, she said. "It would work beautifully as a school."

Theodore's Military-Industrial Complex

The path to Mobile's steel mill by the Bay began forty years ago. Since the mid-1960s, the Mobile Chamber of Commerce and the Alabama State Docks have worked to bring industry to Theodore. The idea for the Theodore Industrial Park came from the administrators of the State Docks. Documents in the Alabama State Archives show that, in the early 1960s, politicians and industrial consultants looked at the abandoned federal military property, the Theodore Ammunition Depot, as a site for new industry. The State Docks had run out of room to expand along the downtown waterfront. In March 1965, at a meeting of the Industrial Development Board of the City of Mobile, the director of the State Docks and the Board agreed to buy the Depot.

The City IDB used tax-exempt industrial development bonds to buy the land for the Theodore Industrial Park. There have since been two huge spending projects by the federal, state and local taxpayers in the Theodore area: the $90 million Theodore Ship Canal and the $100 million Naval Station Mobile. The Navy base opened in 1993 and closed a few years later.

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