State grant hinges on Winner pledge

The state says it needs a commitment of more than $60 million, not just $14.2 million.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa.-- The Westinghouse Sharon Industrial Park project is in danger of losing a $7 million state grant unless the developer, Winner Development LLC, comes up with a larger financial commitment.
The state earmarked $7 million from its capital budget, based on an initial project cost estimate of $77 million, for the redevelopment of the former Westinghouse Electric Corp. plant on Sharpsville Avenue.
However, when the Mercer County Industrial Development Authority, the funding liaison between Winner Development and the state, submitted a formal application for the $7 million, the state balked because Winner had scaled the project down to just $14.2 million, the MCIDA learned at a meeting Friday.
Larry Reichard, executive director of Penn-Northwest Development Corp., which is assisting the MCIDA with the project, said that would cover just the building expansion cost of Winner Steel Services Inc. on the southern end of the project.
It doesn't include the estimated $45 million in machinery and equipment that would go into that expansion, and he had no explanation for why Winner Development excluded a commitment for that amount from the application.
Shane Rosenfelder, MCIDA assistant secretary-treasurer, reported that the state said a $14.2 million project doesn't justify a $7 million capital budget grant, and the project would have to be between $60 million and $77 million to earn that much help.
Reichard said the project could lose the capital budget allocation.
State requirements: The state wants up-front financial commitments from Winner for the entire project, not just the Winner Steel expansion, referred to as the AB Slab in the funding application, he said.
Rosenfelder said the state wants detailed project costs that include renovation of the main factory building and the office building on the site, evidence of firm financial commitments from Winner, as well as bank or other private financial commitment letters.
Without that information, the project is on hold, Reichard said.
Gerald Trontel, Winner Development controller, said the company is aware of those requirements and is gathering the information requested.
Loan: In a related matter, the MCIDA voted to accept a $1.25 million grant from the state Infrastructure Development Program that will be converted to a 2 percent loan to Winner, subject to receipt of acceptable security or collateral, establishment of an escrow account to handle the funds and the signing of loan documents between Winner and the MCIDA.
Rosenfelder said the state has also informed MCIDA that prevailing wage rates (average wage for union construction workers) will have to be paid on the project after all. A January court ruling forced the state to change its ruling on that matter, he said.