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$970M growth plan at steel mill gains ground
‘This is a step in the right direction,’ Youngstown’s finance director says.
YOUNGSTOWN — The city purchased two key pieces of property and is finalizing deals for two others needed by V&M Star Steel for a potential major project.
The board of control agreed Thursday to purchase 14.7 acres from Shelly & Sands for $404,800, and 33.5 acres from Norfolk Southern railroad. The board also approved extending a tentative agreement till Monday to purchase 80 acres from Brier Hill Slag Co. for about $3.9 million.
V&M officials are to approve a contract early next week reimbursing the city the money for the Shelly & Sands and the Brier Hill purchases, said Finance Director David Bozanich, a board of control member.
The city won’t close the deals to buy the parcels without the approval of V&M Star, he said.
Also early next week, the city will finalize the purchase of 15 acres at the former Dempsey Steel facility for about $360,000 with V&M reimbursing the cost, Bozanich said.
The properties — all on Youngstown’s North Side or in Girard — are needed by V&M for a potential $970 million expansion project near its Martin Luther King Jr. Boulevard plant.
The cost of buying the railroad land is part of a $20 million grant received by the city from the state Department of Transportation with funds from the federal stimulus package.
The rest of the $20 million would be used to relocate the railroad tracks and to grade the property, Bozanich said.
“This is a step in the right direction,” Bozanich said of the land purchases.
The struggling national economy is delaying V&M’s decision on the expansion, which would create about 400 jobs.
V&M manufactures seamless tubes used mostly in the gas and oil industry. The natural gas and oil drilling businesses are starting to see an increase in business, Bozanich said.
A decision is expected toward the end of the year. V&M officials won’t comment on the proposal.
“We believe Youngstown’s site is advantageous due to several factors,” Bozanich said. “We’re giving them the best site and the workforce is strong” here.
If the V&M expansion doesn’t occur, the city would retain ownership of the properties and could lease it to other interested parties.
Also Thursday, the board approved a two-year extension with the Ohio Attorney General’s office for 21,517 square feet of office space at the city-owned 20 Federal Place building, the former Phar-Mor Centre at 20 W. Federal St.
The AG’s two-year contract, originally approved by then-Attorney General Marc Dann in 2007, expired Tuesday.
The new deal, approved by Attorney General Richard Cordray, includes a 3 percent rent reduction. The office will pay $68,292 a year under the new agreement.
skolnick@vindy.com