43
Youngstown to buy land for expansion of V&M Star
The cost of buying the property is $4.6 million.
YOUNGSTOWN — The city signed purchase option deals with three companies to provide V&M Star Steel the needed space for a planned $600 million to $900 million expansion.
The city’s board of control signed the deals Thursday. It would cost $4.6 million to purchase the three sites that total 103 acres.
The city will also have to conduct environmental studies of the properties and almost definitely clean up portions of the sites, said city Finance Director David Bozanich, a board of control member.
While the studies will determine the remediation costs, Bozanich said it would probably be less than $2 million. The city plans to seek financial assistance from the state for the remediation and property acquisition costs, he said.
The city would borrow money — with some hopefully offset by the state — for the property remediation and acquisition with V&M Star Steel or a financial institution guaranteeing the repayment of the loan, Bozanich said. The payments would be made annually for up to 20 years, he said.
“It’s a lot of money to borrow but if you look at V&M’s assets, we’re very comfortable with their financial strength,” Bozanich said. “It’s a huge benefit to the community if we can pull this off, particularly in this economic climate.”
The company manufactures seamless steel tubes used mostly in the oil and gas industry, and is based in the former Youngstown Sheet & Tube Co.’s Brier Hill Works site. The expansion would be in Youngstown and Girard on and near Martin Luther King Boulevard with the two cities splitting the 2.75 percent income tax to be charged to V&M employees.
The company employs 465 and is planning an expansion that would add 500 to 1,000 jobs.
“The size and magnitude of the project is significant to Youngstown and Girard,” Bozanich said. “This is a very large project. It will have a huge impact.”
If V&M doesn’t move ahead with the expansion, it would reimburse the city the cost of the purchase options, he said.
The options to purchase property around V&M are with:
UBrier Hill Slag Co. in Youngstown for 80 acres at a cost of $3.9 million. The city’s purchase option is for $5,000 for three months. The deal allows the city to extend the option for two other three-month periods at $5,000 each.
UThe former Demsey Steel facility in Girard for 15 acres at a cost of $360,000. The city’s purchase option is for $15,000 for six months.
UThe former Sharp Lumber property in Girard for 8 acres at a cost of $340,000. The city’s purchase option is for $10,000 for three months.
A construction date could be announced as early as next year’s first quarter, Bozanich said. The project’s construction would take about 18 months, he said.
V&M Star President Roger Lindgren said last week that “no decision has been made at this time” as to when the expansion project would begin.
The Ohio Tax Credit Authority approved about $2.6 million worth of tax incentives for the company last week for this project. In return, V&M committed to maintaining operations at this site for the next 20 years, keeping its current staff and hiring at least 465 new workers.
skolnick@vindy.com