43
$970M expansion for V&M advances
Photo
Youngstown finance director David Bozanich
Photo
EXPANSION INCENTIVE: Posing in Columbus on Monday after a talk are, from left, Youngstown Mayor Jay Williams; Roger Lindgren, president of manufacturer V&M Star Steel; and GIrard Mayor James Melfi. Youngstown and Girard have offered incentives to V&M Star, which borders the cities, if it chooses to expand in that area.
YOUNGSTOWN — The city’s board of control will sign a contract as early as Thursday with V&M Star Steel to have the company reimburse $5 million the city is borrowing through the sale of bonds to buy land for a potential business expansion.
The board also will sign agreements with three businesses to purchase the 103 acres near V&M needed for that possible expansion, said city Finance Director David Bozanich, a board member.
That will happen now that city council authorized the board at a special Monday meeting to proceed with the plans. Council had postponed a vote on the two proposals at a Wednesday meeting primarily because some members wanted more time to look it over.
At Monday’s meeting, only one council member asked a question.
Councilman DeMaine Kitchen, D-2nd, wanted to know if there was a discussion with V&M to give preference to qualified job applicants from Youngstown and Girard, the two cities partnering on this proposal. Youngstown Mayor Jay Williams said that would be part of the development agreement between the cities and V&M.
The 103 acres near V&M’s Martin Luther King Jr. Boulevard facility is needed for a $970 million potential expansion project that Bozanich said would add 411 jobs with an average salary of $80,000 a year.
Because of the current economic climate, V&M cannot commit to the project, however.
But Bozanich said the company is serious enough about the proposal that it’s guaranteeing to reimburse $5 million the city is borrowing — the purchase price of the property, interest of about 5.7 percent, legal fees and survey costs — even if the project is called off. That decision will be made no later than Dec. 31, he said.
Bozanich also pointed out that V&M, which manufactures seamless steel tubes used mostly in the oil and gas industry, has close to $2 billion in cash.
V&M officials say a final decision on the project hasn’t been made.
The city will sell the bonds later this week or early next week, Bozanich said.
“I’m confident we’ll have the reimbursement contract in front of the board of control by Thursday,” he said. Also, contracts to purchase the property near V&M should be finalized at that meeting, Bozanich said.
The expansion would be in Girard and Youngstown, with 80 percent of the property located in the Trumbull County city.
Williams and Girard Mayor James Melfi, who attended Monday’s Youngstown council meeting, have signed a letter of understanding to share the 2.75 percent income tax to be imposed on those who work on the 103 acres.
Williams and Melfi hailed the letter as a deal that will prove beneficial to both cities.
A final deal won’t be in front of the Girard and Youngstown city councils until after V&M decides to move ahead with the project. To do otherwise would be premature, Melfi and Bozanich said.
skolnick@vindy.com