YOUNGSTOWN RENEWAL ZONE City targets Calif. tech companies

The city hopes to lure Silicon Valley companies that are fed up with their state's difficult business environment.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- California, here we come.
That could be one slogan as the city starts the push to turn the recent federal renewal community designation into jobs.
The city is focusing on luring two types of companies with the big federal tax breaks that the recent renewal designation provides. Those tax breaks could be worth millions of dollars to business owners.
First, there are the businesses in the five-county region; second are California-based technology companies.
The city soon will send out about 3,000 information packages. That information will go to area companies or professionals such as accountants, tax lawyers and real estate agents with clients in the region. The marketing material will outline the renewal community program's benefits.
The second marketing prong involves about 1,000 Silicon Valley companies with 25 to 100 workers. The city will approach those companies with an information package designed to pique interest in Youngstown, said Jeffrey L. Chagnot, development director.
California is known for its difficult business climate for companies and workers. Problems range from power outages and high business costs to traffic congestion and the high cost of living.
"All those things point to California," Chagnot said.
The city will advertise its business and quality-of-life advantages, such as low costs.
Luring big business
The idea is to seek out growing technology companies and lure a few to seize on the city's big renewal incentives and favorable business climate.
"All you need to do is hit on two or three of those, and they would be big hits," Chagnot said.
Once the marketing materials are distributed, the city will organize a seminar this summer for interested companies. The seminar will detail how business can take advantage of the tax breaks.
For example, the developer that builds the proposed downtown civic center could get up to $10 million in tax credits. The developer also could sell its interest in the project after five years and avoid paying capital gains taxes.
"It'll have some major impact on the downtown area and especially the arena project," Chagnot said.
Marketing is one of several tasks that city officials have undertaken since January. That's when the U.S. Department of Housing and Urban Development named Youngstown as one of 40 renewal communities across the country.
Businesses that operate or locate downtown will be eligible. So will companies in a segment of the North Side along U.S. Route 422 and the Smoky Hollow neighborhood.
The incentives
They'll get major tax credits, deductions, capital gains benefits and other incentives until 2010.
The federal designation is the biggest government program available to cities of Youngstown's size.
Heading the local effort are Chagnot; Bill D'Avignon, city deputy director of planning; and Jay Williams, director of the Community Development Agency.
The city also has named a group that will oversee the renewal program.
The panel was created to write a federally required plan by this summer that outlines how the program will run. The board also will monitor results.
Representatives on the panel besides city officials come from Mahoning County government, Youngstown State University, the Youngstown Metropolitan Housing Authority and the local office of the state Department of Development.
The city also is working with state officials to create a mechanism to approve Ohio tax breaks. The state tax breaks would be joined with local and federal incentives as part of renewal community benefits.
The state bureaucracy must be set up for Youngstown and Hamilton, located north of Cincinnati, the other Ohio city to receive a renewal designation.
rgsmith@vindy.com