Renewal zone delay imperils B.J. Alan jobs

The fireworks business might take its jobs to Pennsylvania.
By DAVID ENRICH
STATES NEWS SERVICE
WASHINGTON -- An effort to expand the boundaries of the Youngstown Renewal Community is encountering obstacles in the Bush administration and on Capitol Hill.
Youngstown is one of dozens of renewal communities nationwide, a federal designation intended to spur economic development by offering businesses tax incentives to operate in economically distressed areas.
But only part of Youngstown is included in the renewal community.
The headquarters of fireworks distributor B.J. Alan Co. is just outside the zone, and the company is threatening to move its plant, and its 250 jobs, to Pennsylvania unless the zone is expanded to include the company's base on Martin Luther King Jr. Boulevard.
Pleas rejected
The U.S. Department of Housing and Urban Development, which oversees the Renewal Community program, has rejected entreaties from B.J. Alan and Youngstown and state officials to expand the zone.
The agency "lacks a basis in statute and regulation for making any change at this time," a top HUD official wrote last year to Youngstown's mayor.
With hundreds of jobs hanging in the balance, city and company officials appealed for help to Ohio's two Republican senators -- Mike DeWine and George V. Voinovich -- and Democratic Rep. Tim Ryan of Niles.
Mary Anne Walsh, Ryan's chief of staff, said the congressman plans to introduce legislation authorizing HUD to broaden renewal communities to include tracts of land -- such as the area around B.J. Alan's headquarters -- that are populated by businesses but not people.
"Our hope is that it will be nothing more than a technical correction" to existing legislation, Walsh said, noting that such a change might pass easily. "But legislation still takes time, and you need to make sure that the legislative language that you draft actually addresses the problem."
Less optimistic
DeWine spokesman Mike Dawson was less optimistic. He said HUD officials and some lawmakers are wary of changing the Renewal Community designation process.
"We have tried to resolve the situation, but so far haven't found a way around HUD's objection," Dawson said. "We've got more hurdles to climb."
Youngstown Mayor George M. McKelvey said he wants DeWine, Voinovich and Ryan to make the expansion of the Youngstown renewal community a higher priority.
"The wheels of legislation in Washington move very, very slowly. Unfortunately, that slowness could cost Youngstown -- which can't afford to lose any jobs -- 200 to 300 jobs," McKelvey said. "I would hope that those facts would help the congressman and senators move this item a little higher up on their agendas."
The lawmakers say the issue is already a priority. Voinovich's spokeswoman pointed to the senator's role in securing money for urban renewal in Youngstown.
Warehouse needed
B.J. Alan officials say the company needs to build a new warehouse, which would create as many as 150 jobs. But without tax breaks, company officials assert, it will be cheaper to move the entire fireworks operation to Wheatland, Pa., where B.J. Alan recently opened a new warehouse.
"At this point, our conclusion is that without the renewal community designation, it just does not look like it is economically viable to build the warehouse space we need in the city of Youngstown," said William Weimer, B.J. Alan's vice president and general counsel. "But we want to stay here."
B.J. Alan officials have said they will decide whether to relocate within the next six months.
In the letter to McKelvey, HUD Assistant Secretary Roy A. Bernardi said he "agrees that boundary changes in the case of Youngstown and other [renewal communities] may, in appropriate cases, enhance the effectiveness of the tax incentives in improving the situation in these highly distressed communities."
Bernardi said HUD would reconsider Youngstown's proposed boundary changes sometime in 2003 and might propose "changing the law to authorize meritorious boundary changes."
But HUD spokesman Brian Sullivan said such recommendations aren't imminent, because the agency will have to analyze a vast amount of tax data when companies file their taxes next month. It wasn't clear whether Congress would be able to approve any HUD recommendations in time to meet B.J. Alan's self-imposed six-month deadline for deciding whether to leave Youngstown.