Merrill Marine Terminal Services is getting out of the recycled metal business and plans to build a 56,000-square-foot warehouse where the scrap pile now sits.
Merrill's contract to store and load scrap onto ships expires this summer, and the company doesn't plan to renew it, said Jim Therriault, vice president for marketing at Sprague Energy Corp., which bought the terminal late last year. That decision will lead to the disappearance of a small mountain of scrap metal visible to anyone crossing the adjacent Veterans Memorial Bridge between Portland and South Portland.
Therriault said the company would go before the Portland Planning Board on Tuesday to begin the permitting process for the new warehouse. The building would allow Merrill to expand its dry goods business and provide a place to store newsprint and other forest products.
Therriault said the company doesn't expect a cut in the work force; rather, it is expected to grow.
He wouldn't discuss terms of the expiring contract, including what companies are party to it. Peggy McGehee, an attorney for New England Metal in Portland, said her client is one of many scrap yards across the state that use the terminal.
Jeffrey Monroe, Portland's director of ports and transportation, said the consensus on the waterfront was that most of the scrap metal would now be trucked to Boston, where it would be loaded onto ships. That would increase transportation costs for scrap yards, but it was unclear if those costs would be passed on to others.
The news is yet another challenge for Portland's scrap yards, which operate in the Bayside area, a district targeted for redevelopment. A 2000 city report called these businesses "the single most inhibiting factor to the successful redevelopment of Bayside." New England Metal is looking to move, and has reportedly found several alternative locations in Portland and area communities.
E. Perry Iron & Metal Co. ships ferrous metals through New England Metal and Merrill, said Alan Lerman, the company's owner. Lerman said he expected New England Metal to find an alternative shipping method for metal, and that the change at Merrill wouldn't affect his business directly.
"What's going on with the city (redevelopment initiative) is going to impact it more than the change at the docks," Lerman said.
McGehee, a lawyer with Perkins, Thompson, Hinckley and Keddy in Portland, said "very little" of the company's metal goes to Merrill. Only metal that's been cut to size and length for immediate melting is shipped out through Merrill's, she said. The rest is trucked to other facilities, but all the metal will go to those facilities now.
"We don't really expect this to have much of an impact," she said. "We're still committed to staying in Portland and moving (to a new site)."
Monroe said he believed the only terminal in the area that might be able to handle scrap metal was Turner's Island LLC in South Portland. But Roger Hale Jr. at Turner's Island said the firm has "no interest at the present" in picking up the scrap business.
Monroe said he still thought there was enough scrap business in Maine to keep a terminal going.
"One of the things that's very obvious to us is that this is cargo that's been moving in and out of the state on a regular basis," Monroe said. "It will provide an opportunity for another terminal."
Monroe suggested that Portland's International Marine Terminal would be a likely place to run a scrap metal loading operation, once the Scotia Prince is moved to the new Ocean Gateway terminal. If the City Council approves additional funds for Ocean Gateway, he said, the Scotia Prince is expected to be out of the International Marine Terminal in 2007.
Monroe said losing scrap metal at Merrill isn't necessarily bad news for the city's waterfront.
"It would be bad if we were losing it and there was nothing to replace it," he said. "They're replacing it with a cargo (that) they're going to get a better margin on, and you only have so much space at the terminals. You want to roll with something that will give you a better profit."