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Railroad snag holds up action on V&M expansion
The relocation is ‘critical’ to the V&M project, a city official says.
YOUNGSTOWN — The city’s board of control postponed voting on legislation related to a potential expansion of V&M Star Steel because the company hasn’t yet acquired all of the land needed for the project.
The steel company is still negotiating the relocation of a Norfolk Southern railroad line that runs through the site of the planned expansion.
The relocation of the railroad line is “critical to the project,” said city Finance Director David Bozanich, a board of control member.
Without the line relocation, V&M would have to make changes to the location of the potential expansion, Bozanich said after Thursday’s board meeting. However, not obtaining the railroad property isn’t a deal breaker, he said.
“We expect the issue to be resolved shortly,” in about 10 days, Bozanich said.
City council approved legislation recently related to the potential V&M expansion.
Council:
U Authorized the city to borrow $5 million through the sale of bonds to buy 103 acres needed for the possible project.
U Agreed to have V&M guarantee a reimbursement of the money, plus interest and other related costs to the city.
U Approved signing agreements with three businesses to purchase the property.
All three issues need final authorization from the board of control.
The extra property in Girard and Youngstown near V&M’s Martin Luther King Jr. Boulevard facility is needed for a $970 million potential expansion that Bozanich said would add 411 jobs.
V&M President Roger Lindgren didn’t return a telephone call Thursday from The Vindicator seeking comment on the railroad negotiations.
Lindgren said two months ago that the company is considering a few sites for the project, but no decision has been made.
A Jan. 9 document from the Ohio Environmental Protection Agency about V&M states the company wants to increase the Youngstown facility’s liquid steel production from 830,000 tons a year to 1.4 million tons annually. The two options are constructing a new facility or upgrading the one it has in Youngstown.
“Most likely the option used will be due to economic conditions,” the document states.
Girard and Youngstown city officials are optimistic the expansion would occur here, specifically pointing to V&M’s guarantee to make the $5 million bond payment.
The two cities would split a 2.75 percent income tax to be assessed on those who would work at the V&M expansion site.
The rail line relocation would cost at least $20 million.
The city included the relocation at the $20 million price tag on its wish list for federal economic stimulus package funding.
V&M manufactures seamless tubes used mostly in the gas and oil industry, and is based on the former Youngstown Sheet & Tube Co.’s Brier Hill Works location.
It employs about 465.
skolnick@vindy.com