Another crucial step taken toward V&M Star expansion

The city of Youngstown will borrow $5 million to buy land for the proposed expansion of V&M Star Steel in Brier Hill, and repayment is guarantee — by the company.

Officials of V&M and members of the city’s board of control, made up of the mayor and finance and law directors, are on the verge of signing an agreement that commits the manufacturer of seamless steel tubes to reimbursing the money government is securing through the sale of bonds.

This development alone should grab the attention of the federal government and persuade the White House that the $970 million expansion project warrants special attention.

Gov. Ted Strickland, Ohio Department of Development Director Lee Fisher, who is the lieutenant governor, and other state officials are actively involved in the courtship of V&M. The company has said it is looking at locations around the country and the world, and despite the economic incentives that have been pledged it has stopped short of making a commitment to the Valley.

In December, the Ohio Credit Authority approved a 10-year, 75 percent tax credit for V&M, with the benefit to take effect in January 2010.

In return, the company would commit to creating 294 full-time jobs and to retaining 465.

The expansion would be on land bordering Youngstown and Girard. The two cities have created a Joint Economical Development Zone to facilitate the sharing of tax revenue. Officials have said that 500 to 1,000 jobs could be created.

The $5 million Youngstown is borrowing will be used to buy 103 acres owned by three businesses.

The two cities are also discussing a development agreement with V&M that would give preference to qualified applicants from Youngstown and Girard.

Federal role

While the state has demonstrated its commitment to making the project a reality in the Mahoning Valley, the federal government has not yet become involved.

On Thursday, it was revealed that V&M is in negotiations with Norfolk Southern railroad over the relocation of a rail line that runs through the site of the planned expansion.

We are confident the White House could facilitate the successful conclusion of the negotiations.

There are several reasons President Obama should embrace this project. First, it meets his goal of reviving manufacturing in this country. During the presidential campaign, Obama made much of the fact that Ohio had lost more than 200,000 manufacturing jobs over the past four years.

During his visits to the Valley, the then Democratic nominee acknowledged the job losses experienced and pledged that as president his administration would develop an industrial policy that puts America first.

The V&M project would not only give the new administration the opportunity to figure out what role the federal government can play, but it would also demonstrate to the rest of the world that the U.S. will not longer sit idly by while manufacturing jobs are sent overseas.

Indeed, the fact that V&M is a foreign owned company makes its decision on where it will build its new plant all the more important.

Since this region is in competition with locations around the world, the company’s decision to build here would go a long way toward establishing the Valley’s reputation as a good place to do business.

V&M is holding off on making an announcement because of the current economic crisis. The Obama administration should reassure company officials that an investment in a new plant is timely, given the economic stimulus package that was passed Friday by Congress.