Rick Kohr, CEO of Evergreen Advisors, met up with Michael Moore, CEO of what used to be Sparrows Point Terminal in Baltimore, now known as Tradepoint Atlantic. Rick and Michael talked about the transformation of the terminal into an international business area in Maryland and what this transformation means for Baltimore and Maryland’s economic development.
“I had the pleasure of sitting down with Michael to discuss his current role and how he is planning to expand business both internationally and right here in Baltimore. I learned some interesting things I had not previously known about Baltimore and its opportunities for expansion, and I am excited to share those with you here.”
Rick Kohr, CEO, Evergreen Advisors
Print PDF Here: EA Interview Michael Moore 2016
RK: Thanks again for your time, it’s an honor to be sitting here with you.
You’re arguably running one of the most incredibly intense and complicated projects in the country, certainly on the East Coast, from a development perspective. You’ve had a great career with Global as CEO and President of Global Container Terminals going back to 2008, and then you had retired.
MM: Yes, I had for three years.
RK: So you had been retired three years since 2012?
RK: Then, out of the blue you get a phone call. You had taken on Global in 2008 in the midst of the great recession and entered that company at a tough time economically for both the company and the general economy. You had a very successful turnaround with Global — a great way to finish the career. But you were asked to come in and take a look at this 3,100 acre dinosaur of a project with all kinds of issues, from environmental to regulatory.
How did you hear about them or how did they hear about you?
MM: Great question. It’s a bit of a funny story; I was sitting on my deck looking at the river and a board member…
RK: In Oregon.
MM: In Oregon.
RK: Go Ducks.
MM: Go Ducks! Season tickets!
MM:…A gentlemen who became a board member later, a guy by the name of Mike Mullen; Mike was the Founder and CEO of CenterPoint Properties. He developed a 5 1/2 billion dollar real estate development firm out in Chicago.
He sent me an email, Rick, and it said, “Hey, are you bored yet? Do you want to go back to work?”
I wrote back and said, “Mike, sure. Doing what?”
He said, “I can’t tell you.”
And he couldn’t tell me because he had an NDA with Hilco Global, the original owners of the property. So he piqued my interest by saying I would be running the largest private port project on the East Coast. 3,100 acres. I had no idea where it was. Even being in the business, Rick, I had no idea this existed.
But when I finally did some research on it, I realized it a had a railroad, it had a port, and it had a huge amount of contiguous land. To give you an idea of the scale and what attracted me: We are 100 acres larger than the port in Long Beach. We are 1.7 times the size of the Port of Seattle Tacoma, and 1.3 times the Port of New York and New Jersey. So I landed in Baltimore, took a 4 1/2 hour tour of the property, with representatives from each of our two principal investors, Redwood Capital Investments and Hilco Real Estate, and I saw the northern interchange yard, which is a mile long; it has access from Norfolk Southern and CSX. I got out and I looked at it and could barely see the far end, and I looked at the investors and said, “You have no idea what you have here.”
RK: Really? Had they already bought it?
MM: They already bought it. They were predominantly looking at it as a real estate development play, but I looked at it with a different set of eyes and I said, “Nobody has this rail access on the East Coast. Class 1 – plus a private port facility.” I said, “Guys, this doesn’t exist anymore.”
At Global, we had worked very hard with the Port of New York and New Jersey to get a nearby intermodal terminal of 28 acres, about half a mile from our facility. 28 acres vs 130 acres at ours, and 100 miles of track in it. So I came back, and on the flight back I wrote, “This is a huge real estate play, but here are the things you have that nobody on the East Coast has.” I listed all of the logistics benefits. I said:
“We should be looking at clients that we touch two or three times through the transaction. What people forget is that we actually have 4 operating businesses. If I say we are at Tradepoint Atlantic, everyone thinks about the vertical development. That’s most important. But we are also running a railroad that had 8,500 cars move last year. Its own staff, its own track, no one realizes that.
MM: Our port moved 1.3 million tons of cargo last year. We have a utility subsidiary called Tradepoint Utilities. We have a water treatment plant that processes 216 million gallons of water a day. So you add it all up, we actually have 4 independent business, 3 of which are up and running as we speak. So the investors saw that after I wrote it up. I said, “Guys, look; we have independent businesses in addition to real estate development. Our job is to figure out how to combine all of those and attract the right types of tenants.”
So I went back and told my wife, “I think I lied to you. I don’t think we’re retiring.” She’s used to it. 19 moves, 6 countries, and she sad, “Okay, what attracts you?”
The other thing, Rick, is what a great last project to do. To sit in 5 or 10 years and say, hey we took this piece of land, knocked out 17 million sq. ft. of building…
RK: And that’s done at this point?
MM: Done. And we’re going to build back 14 million square feet, and we left 1 million sq. ft. up. We’ve taken and recycled 1.7 million tons of metals off of the site. I thought, “What a great last project. How could this be more fun? What a fantastic legacy project to have a hand in!”
And to work with a couple of investors who are entrepreneurial decision makers, it’s more fun than you could imagine actually.
RK: So you left a company you had to rebuild in ’08, and now you’ve come to a project that’s both a brown field and a green field. You have to reclaim the property, and in essence, you have to start up a whole new set of businesses. What gets you excited about that every day? I mean that’s a big daunting task!
MM: You know it would be a big daunting task if I didn’t have the management team and the investors we have. So the investors said, “Put together the management team you think you need to run this.” Interesting, I didn’t reach out to any of my prior employees, people I have worked with, because we needed different skillsets for this. So I went out and grabbed a gentleman from the CSX Railroad to come in and run our railroad. I didn’t know him before but his name is Paul Thomas and he’s our Vice President of Railroad Operations. He’s a former nose tackle from Marshall and was there when Randy Moss was there. Highly competitive, and he’s a guy that just gets stuff done.
We’ve hired Joe Greco from the Maryland Port Administration to be our VP of Commercial Trade. Joe understands the market here in the Mid-Atlantic, the Baltimore area. We hired a gentleman by the name of Kerry Doyle to be our CFO. Kerry’s done a lot of underwriting in the past and he came from Redwood Capital. He understands how our owners look at underwriting. He’s also worked for the Investment Bank, Houlihan Lokey. Kerry has a big task. We are going to ask him to find upwards of a billion dollars over the next 10 years. So he will do a lot of underwriting.
Most importantly, during the interview process, I said to the board, “Look guys, my big gaping hole is real estate development. I don’t understand real estate development. I can run the business, I can assemble the team.” So we went out and looked around and found the absolute best guy, the best fit for that. His name is Eric Gilbert. Eric has done 3.5 billion dollars’ worth of projects in his career, including the 6,000 acre project outside of Chicago that was a superfund site, so it had environmental concerns like us. He built it into a logistics park with railroad access, warehouse and distribution. And poor Eric, he thought he said no to me twice, but every weekend I was on the phone with him, telling him it was a deal he should be interested in. With the support of the investors and the board, I was able to fill all of the holes that I had in managing the business. We additionally brought Mike Mullen on the board. Mike is our only non-executive director, and he has a huge background in real estate. And Mike has been a phenomenal resource. So I think if I had been put into a position with an established management team it would have been much harder, but I was actually able to accumulate the guys we needed for this job.
RK: Excellent. So you’ve got an incredible opportunity. I think I’ve read where you’ve got 3 access points into the facility, hence part of the logo, which we can touch on in a minute. Great partners, financial partners, you’ve got a good management team.
What’s the thing that keeps you up at night about this project going forward? It’s a 5-10 year project, probably 10 given the scope and breadth of project. What keeps you up at night?
MM: Great question. We are having such great fortune now. We are moving along extremely well, but I think it will be finding ways to work creating a DMCF. We are going to have to work carefully with the state and Maryland Port Administration for the benefit of the Port of Baltimore, but I think it’s that. We are really going to have to figure out how we are going to solve that problem, and I feel very fortunate because the Executive Director, Jim White, is focused on it as well. So I’m pretty sure we can come to a solution working with the community. I think a huge benefit to the Port of Baltimore and to us is the fixing of the double-stack train problem through the Howard Street Tunnel. That’s just good public policy all the way around. It doesn’t directly impact us at the moment, but over time that will be a critical issue we will need to work with. We will be working very carefully with the administration all the way through on things like that. We are definitely a part of the Port of Baltimore, and what I found is the issues that the port of Baltimore are dealing with and the Maryland Port Administration, are absolutely our issues. So, I’d say those two things are things, because they are outside our control.
RK: Tell me about the name and logo? I know it has real meaning.
MM: What we have learned is that the property has great ties to the region. I never attend a meeting with 20 people or more where someone doesn’t tell me a family member or friend worked there. That creates meaning for us. So the logo was meant to tie back to this heritage. The logo also resembles part of the Star of Bethlehem, which used to hang on the property when it was known as the Bethlehem Steel Company. It is meant to reference the site’s steelmaking past. The triangle itself represents the three modes of transportation at the facility – rail, highways, and the port. It is incredibly hard to find a site this size with all three modalities. Atlantic was inserted because we anticipate other opportunities in the country and will be branding TradePoint prospectively. The gold colors of the logo were selected because this location provided much of the steel for the Golden Gate Bridge. Not many people know that but what a great legacy for the people who worked here at that time.
RK: What a great opportunity and impacting project for the region. Thank you for your time in giving us insight into this initiative. We wish you much success on this!
MM: I am appreciative of the opportunity to discuss this wonderful project. It is a privilege to work with the team that has been assembled and work on something so significant at this point in my career. We are confident that this will be one of the most meaningful projects as it is built out. One we can all be proud of in the region. Now back to work!