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CITY GOVERNMENT Tax breaks cut for 3 companies

Thursday, February 17, 2005

$8.36 million in contracts to be awarded for arena.
YOUNGSTOWN -- The city is changing tax abatement deals with three companies because the businesses didn't live up to their end of the commitment, Youngstown's director of economic development said Wednesday.
Abatements are given to companies as an inducement to locate here, expand operations or buy new equipment. In exchange for the tax breaks -- typically a 75-percent reduction for 10 years in Youngstown -- the company promises to increase its workforce.
Economic Development Director Jeffrey L. Chagnot told city council's finance committee that tax abatements with 50 companies should continue, but said an annual review turned up problems with three other firms.
Specifically, he noted these issues:
U City council approved an abatement for Zarlingo Paving Co. Inc. on Poland Avenue two years ago, but Zarlingo officials never signed the deal, Chagnot said. Because the company never signed the abatement deal, it never received a tax break, and is now officially off the abatement list, he said.
U United Foundries on Crescent Street closed its Youngstown location, and that terminated the abatement, Chagnot said.
UBuckeye Recycling on Performance Place carried through on a promise to construct a new building, and will maintain the real property tax abatement it received three years ago. But the city pulled the company's personal property tax abatement -- a tax break on new equipment and materials -- because the company agreed to have 40 people work there, Chagnot said. Presently, only one person works there, he said.
There were 55 companies in the city receiving tax abatements through 2004.
Arena stays on track
The city board of control is expected today to approve $8.36 million worth of contracts for the downtown arena project.
Among the big-ticket items are contracts of $2.2 million for the arena's metal panels, drywall and interior wall construction; $1.68 million for interior and above-ground plumbing; $1.44 million for concrete for the building's exterior, some inside floors and the sidewalks outside the facility; $1.03 million for nonstructural steel and $893,723 for the arena's roof.
VEC Systems of Girard was the low bidder on the roof project. Boak and Sons, another bidder for the roof project, complained about VEC getting the contract, said Carmen Conglose Jr., deputy director of the city's public works. But VEC complied with the bid specifications for the job, he said.
Sam Boak of Boak and Sons was out of town and couldn't be reached to comment Wednesday.
The original roof estimate was in the low- to mid-$800,000 range, and was later revised by the architect and the company overseeing the project to $1.4 million, well above VEC's bid, Conglose said.
"With these bid awards, it pretty much brings us to 80 to 85 percent complete on contracts," Mayor George M. McKelvey said.
Bid packages for some other major projects -- such as seating and furniture -- will probably be ready next week, Conglose said.
The project is on schedule with opening day set for Nov. 5, with all the work done by late October, Conglose said.