Deal for V&M key on land transfer

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Girard Mayor James Melfi

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Youngstown Mayor Jay Williams

If the dispute kills the potential V&M project, the area ‘may wear this scarlet letter for eternity,’ Mayor Williams says.

YOUNGSTOWN — If the fate of a potential $970 million V&M Star Steel project hinged on having 80 acres in Girard become part of Youngstown, Girard Mayor James Melfi said he would have heard that from company officials.

V&M officials want the Girard land, recently purchased by Youngstown for about $5 million to become part of Youngstown, said Jay Williams, Youngstown mayor, and David Bozanich, finance director.

If the land transfer doesn’t happen by Aug. 28, V&M will quite likely cancel the potential expansion plan, Williams said.

“If this deal goes down we will all be culpable,” Williams said. “We, the Valley, may wear this scarlet letter for eternity.”

The Vindicator first reported Saturday on the land dispute.

Melfi said V&M officials haven’t contacted him to express concern over his refusal to allow the 80 acres to become part of Youngstown.

“I don’t know [about this] firsthand from V&M,” he said. “If they’re so concerned, I imagine they’ll call me.”

Williams questioned the validity of Melfi’s comments, saying: “I am certain that representatives of V&M have expressed their frustrations to Mayor Melfi, and I suspect that those expressions may be increasing.”

V&M Star President Roger Lindgren couldn’t be reached Monday to comment. V&M Star officials have repeatedly refused to discuss this potential project publicly. V&M manufactures seamless tubes used mostly in the gas and oil industry.

Youngstown is calling the land transfer a “boundary-line adjustment.” Melfi says that’s a nice term for annexation, and he won’t let that happen.

Melfi said he had no idea Youngstown was buying the 80 acres until he read about it a few months ago in The Vindicator.

But Williams provided a document Monday to the newspaper signed Oct. 14, 2008, by Melfi that states Youngstown would acquire about 125 acres near V&M site “in both Youngstown and Girard” for this project.

The document, an “outline of proposed incentives” for this project, also states the two cities “will agree to relocate city boundary lines which will be beneficial to the expansion project. For practical purposes the proposed site will be located in Youngstown.”

The document states “Youngstown will work with Girard to offer a similar amount of acreage back to Girard should Girard be desirous of obtaining land.”

V&M wants Youngstown to have the property needed for the expansion “because of the ability for [Youngstown] to get it done through federal stimulus funding, our economic development history, our ability to acquire the parcels and because the city is accepting the environmental liability of that property,” Williams said.

Williams questions why Melfi would want to “sit on 80 acres of contaminated property rather than use it. Girard would be trading 80 acres of polluted property for $1 million a year in additional revenue. I don’t see a downside to that.”

If V&M moves ahead with the expansion project, it would hire about 400 employees making about $60,000 to $70,000 a year, Williams said.

V&M is considering an expansion near its Martin Luther King Jr. Boulevard location in Youngstown on the border between the two cities. Nearly all of the property for the expansion is in Girard.

If the expansion happens, the two cities would split a 2.75 percent income tax imposed on those working there as well as a profit tax of the same percentage from the company, Williams said.

Each city would get about $1 million annually, Williams said.

It would cost at least $5 million to clean up the 80 acres, Williams and Bozanich said.

“Girard doesn’t have the resources to clean up that site,” Williams said.

Williams added that Melfi “acknowledged that the 80 acres are essentially junk property with significant environmental liability.”

Melfi laughed when told what of Williams’ comments — saying they aren’t true.

“It can’t be considered junk property because someone [V&M] wants it,” he said.

Melfi also added that Girard could do this project without Youngstown, if that was needed. But he stressed that isn’t what he wants to do.

“We’re trying to work out what is best for the company and what’s reasonable and fair for both cities,” he said.

If this project fails because of a land dispute, it would severely damage the area, Williams said.

“The long-term implications aren’t good,” he said. “The next time we go to the state for money if this doesn’t work, the state won’t help out and point to V&M.”

The state helped steer a $20 million federal stimulus package allocation to help buy and improve property needed by V&M Star for this proposal as well as approve $2.6 million in state tax credits. Also, the Public Utilities Commission of Ohio approved discounted electric rates for the proposed new plant.

Williams and Bozanich said V&M officials have told them the Youngstown-Girard location is the company’s preferred site if the company moves ahead with an expansion project.

The company had planned to wait until the end of the year to make a final decision on an expansion.

skolnick@vindy.com