City and port authority both want surplus Stelco lands

Business park or transportation hub?

‘‘ I think Mr. Kestenbaum, kind of shrewdly, walked into a gold mine. FRED EISENBERGER Hamilton Mayor

The City of Hamilton and the Hamilton Port Authority could be part of a bidding war over surplus Stelco land as each is developing plans for Bayfront property that isn’t even up for sale yet.

Hamilton Mayor Fred Eisenberger says he wants the city to create a kind of business park “for advanced manufacturing and job producing production.”

“I would prefer as a city to land bank some of those lands to control our destiny and be a participant in terms of how those lands are developed in the future,” he said.

The port authority, on the other hand, is focused on owning land that is a centre of ship, train and truck transportation.

“We believe that we can leverage the transportation assets and create a world-class multimodal industrial hub,” said Ian Hamilton, the CEO of the port authority. “We think it is an awesome opportunity.”

Of key interest is waterfront property along the western edge of Stelco property, which stretches northward from Randle Reef for more than 1.5 kilometres.

The reef is going through a multi-year remediation project that will eventually create a 15acre port authority docking facility peninsula. Combining that new facility — which is expected to open in 2022 — with waterfront land along Stelco’s western boundary would create an enormous shipping asset.

But the key question is what does Stelco want.

CEO Alan Kestenbaum has said the company wants to diversify its own transportation network to be less reliant on trucks. There is a shortage of truck drivers across the continent and Kestenbaum wants to use more ships and rail.

The company recently enhanced its docking and rail facilities at its Nanticoke operation. Could it be looking to do the same in Hamilton?

In response to an interview request from The Spectator, his office issued a one-paragraph statement Wednesday:

“Stelco has received a significant amount of interest for the deemed surplus lands. We are committed to discussing mutually beneficial options for its use with all stakeholders, and look forward to meeting with Mayor Eisenberger on this soon.”

A meeting was scheduled for yesterday, but Kestenbaum cancelled it. Eisenberger said a new one has not been set.

Ian Hamilton would not discuss the port authority’s meeting plans with Stelco.

Stelco, as a landowner, with property to sell is a startling narrative twist in the company’s restructuring saga over the past four years.

Last June, the company exited bankruptcy protection — with new owner Bedrock Industries — as a steelmaker without land.

Property previously owned by Stelco was converted into a land trust that was backed by the province.

That land trust meant Stelco would not have to worry about historical environmental liability. And there were plans for the land trust to remediate and sell the property at a later date to create revenue for pensioner benefits, among other things.

But then, suddenly, a deal was cut to sell almost all of the land trust property in Hamilton and Nanticoke for $114 million.

The land was sold under carryover supervision from the bankruptcy protection process, before the land trust governance was up and running and before any remediation had taken place.

Only 37 acres — of 500 acres in Hamilton — were not sold in the transaction, land that Eisenberger says the city is interested in, but the port authority is not.

As for the property that was sold to Stelco, Eisenberger says the city would have put an offer in if it had known it was up for sale. Hamilton says the Port Authority would have been interested as well.

Eisenberger said, “I think Mr. Kestenbaum, kind of shrewdly, walked into a gold mine. This industrial-zoned land ... has enormous value in terms of future uses.”

Gary Howe, the president of United Steelworkers Local 1005, says the union finds the sale of the land to Stelco from the land trust to be acceptable because it created an immediate influx of money for retirees and signalled the company wants to expand its steelmaking capability, possibly restarting an idled blast furnace that is on the acquired property.

A restarted blast furnace — which could cost more than $50 million — would lead to hundreds of jobs.