STRUTHERS State's situational distress designation fuels city investment

Priority investment designation could spur development.
By MARALINE KUBIK
VINDICATOR STAFF WRITER
STRUTHERS -- The payoff for companies looking to expand or begin operations in Struthers just got a little better.
Tax credits on equipment purchases have almost doubled for manufacturers, and many employers will be given priority when applying for government-sponsored investment and training programs.
This is because the Ohio Department of Development designated the city a situational distress municipal corporation. With the designation, which will remain in effect through June 30, 2006 and may be extended, Struthers became part of the priority investment map for Ohio, which makes the city and employers located there eligible for a variety of programs that foster economic development, explained Steve Kelley, ODOD senior economist.
Youngstown and Warren have been priority investment areas since the program began in 1995; Campbell has been designated a priority investment area since 1997.
The programs and benefits available to employers in priority investment areas may help lure new businesses to the city, said Mayor Dan Mamula. Struthers is already part of an enterprise zone, which provides for tax abatements and low-interest loans to manufacturing companies locating or expanding there, he said.
The situational distress designation and the benefits it affords, "is a significant little piece of the puzzle," he said. "We have a couple of interested parties, and this may be enough of a sweetener."
Priority treatment
Tax credits claimed against the Ohio Corporate Franchise Tax on machinery and equipment purchases in priority investment areas is equal to 13.5 percent, 6 percent higher than the tax credits available throughout Ohio. These credits are available to manufacturing and refining companies and are good on purchases made while the situational distress designation is in effect.
Manufacturers, technology companies and offices in priority investment areas are also given priority treatment when applying for investment and training program funds, Kelley said.
Cities designated situational distress municipal corporations are given preference when applying for Clean Ohio Revitalization Assistance funds, he said, and are eligible for urban/rural grants for infrastructure when funds are available.
While most communities are required to put up matching funds to obtain money through the Clean Ohio program for remediation of areas with environmental problems, situational distress corporations aren't required to provide as large a match, and in some cases aren't required to provide a match at all.
"Clean Ohio has a separate fund for situational distress cities," said Jack Dill, mayor of Campbell.
"We just completed a project that we weren't required to provide matching funds for," he added. Campbell received more than $70,000 through the Clean Ohio program to clean up the Aluminum Finishing Corp. site on Wilson Avenue.
Great opportunity
Struthers' receiving the situational distress designation, Dill said, "is one of best things that can happen in our entire area. It can really help [development of the] Mahoning River Corridor of Opportunity."
The MRCO is a 900-acre former steel-mill site that stretches along the Mahoning River through Campbell, Struthers, Youngstown and Lowellville.
"It's really helpful for Struthers and Campbell both to have that designation. It's really going to help both communities. Maybe we'll be able to help each other," Dill said.
Struthers was designated a situational distress municipal corporation July 1 after making a case to the state that the community lost its economic base and has not been able to recover. The initial loss was in the 1980s when the steel mills shut down, but the number of manufacturing jobs has continued to erode, Mamula said.
"We can document that in our sleep," Dill said.
To illustrate the impact of that loss, Mamula said he provided information about poverty rates, which have increased; the number of school children eligible to receive free lunches, which has also increased; and the community's shrinking median income.
kubik@vindy.com