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Plan to build is set in motion

Saturday, January 31, 2004

Global would get $25 million to build a $32 million, 5,500-seat arena.
YOUNGSTOWN -- City officials have decided to build a downtown arena, likely spending the entire $25 million federal grant set aside for such a project.
Only a miracle in Washington, D.C., would change that plan, city officials said Wednesday. Even then, officials say they would use about half the grant to have an arena built. The rest would go to other downtown projects.
Mayor George M. McKelvey said he was pleased and excited to reach a consensus with city council on building an arena.
"I'm tired of talking. I want to see it," he said.
Next moves
After McKelvey updated council members with the latest news on the project, council's finance committee recommended two moves for the full council to vote on next week.
First, the city will give U.S. Sens. George Voinovich and Mike DeWine seven working days after council's vote to secure more time and flexibility in spending the grant. The city wants a written commitment from the U.S. Department of Housing and Urban Development saying the agency will broaden the grant's use beyond an arena.
McKelvey said the senators tell him that using federal legislation to broaden the grant would take until fall of this year or into early next year. Even then, McKelvey said the senators called that chance "a long shot at best." He called the legislative move "improbable, inching toward impossible."
McKelvey said he has faith that HUD will give the city an extension beyond the fall 2005 deadline to spend the money. He expects to have an answer on the time extension in as soon as a few days.
He doesn't have faith in gaining flexibility on the use of the grant.
Assuming that flexibility fails and all $25 million must be spent on an arena, the finance committee recommended the city immediately negotiate a contract with Global Entertainment Corp. of Phoenix. The company would get the $25 million to build a $32 million, 5,500-seat arena between the Market Street and South Avenue bridges.
Gillam's reaction
"I'm happy. I'm very happy," said Councilman Artis Gillam Sr., D-1st. He has pushed the administration for months to end talk of other options -- such as converting the Beeghly Center into a convocation center for $8 million -- and build an arena using the entire grant.
Gillam, who has been part of negotiations with Global, said contracts could be signed as soon as next month.
Councilman Richard Atkinson, R-3rd, finance committee chairman, said council members have agreed for some time on building an arena with the money. How to do that was the only question and the issue that took so much time to settle, he said.
"It's better to work it out and have a good product than rush it," he said. "I think it [the time] was worth it."
Josephine Hulett, a community activist, turned in a petition that she said had signatures of 800 residents urging the city to build an arena.
About 35 people who attended the committee meeting applauded council's moves at the end.
Flexibility option
If the grant spending somehow were made flexible in the next few weeks, Global probably would agree to build the arena using $12 million of the city's federal grant, according to Compass Facility Management, the city's consultant on the project.
McKelvey said the remaining funds would be used for other downtown improvement projects.
Council members said they would pursue that arrangement should it become a possibility.
Management of The Vindicator lobbied the senators in November to seek flexibility for the city in spending the money. Newspaper management questioned whether an arena was the best use for the money.
Mark A. Brown, the newspaper's general manager, said he didn't understand the committee's actions.
He questioned why the city would press the senators when they had committed to seeking time and flexibility that could lead to more, higher paying jobs downtown and make a historic change in downtown's character.
"I just don't understand why you'd set a public deadline," Brown said.
But clearly, all the talk Wednesday was about building an arena.
Consultant's letter
Steven L. Peters, Compass president, urged the city to decide on a direction as soon as possible in a letter to the mayor dated Wednesday. The letter doesn't say why.
Peters said the deal would be "risk free" to the city.
The project has improved over 18 months of negotiations, he said. The site and design of the building each are more efficient than originally envisioned, he said.
Even with only a $12 million subsidy, Global projects an annual profit of $250,000 to $300,000, Peters said. The city and company will negotiate how much each gets of any profits.
"The project team is in place and ready to begin as soon as the city gives the word," he said.
The word is scheduled to come Wednesday.