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V&M delays decision on $1B expansion
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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.
The Youngstown-Girard location remains the company’s ‘preferred site’ for its major expansion, the Youngstown mayor says.
YOUNGSTOWN — V&M Star Steel is laying off about 50 of its local workers and has delayed a decision on its nearly $1 billion expansion proposal.
But the company’s decision on expansion isn’t delayed indefinitely, said Youngstown Mayor Jay Williams and Girard Mayor James Melfi.
The two say they remain optimistic that the major expansion project will happen and will do whatever it takes to make it a reality.
The mayors said Thursday that they spoke to top V&M officials on Wednesday about the layoffs and expansion decision delay.
The expansion decision was to be made in September, Williams said.
“Now, they’ve pushed it out a little further,” he said. “It’s absolutely not delayed indefinitely. It’s extended, but they said it wouldn’t be stalled indefinitely.”
Williams said V&M officials told him when they would have a decision on whether to move ahead with the expansion project. He declined to tell when it would be, saying that should come from the company.
Attempts Thursday by The Vindicator to reach V&M Star President Roger Lindgren were unsuccessful.
Melfi said he wasn’t given a new date for a decision when he spoke to V&M officials.
Land in Youngstown and Girard near V&M’s location on Martin Luther King Jr. Boulevard in Youngstown is “still their preferred site” for a major expansion project, Williams said.
About 50 V&M Star workers at the Youngstown plant are losing their jobs, Melfi said.
The plant employs about 465.
Williams said he didn’t know how many workers were losing their jobs at V&M.
“Contract workers are first,” he said V&M Star officials told him. “They hope it’s just a temporary layoff.”
As for what is causing the layoffs, Williams said, “There’s a slowdown in the business. They’re not immune to the global economy.”
Melfi agreed saying the layoffs were caused by “the worldwide economic problems.”
Despite the layoffs and the expansion delay, Williams said V&M is still committed to the purchase of about 113 acres of land in Girard and Youngstown needed for the proposed project. That location would employ about 411.
Youngstown officials say the project would cost $970 million while the Public Utilities Commission of Ohio says the expansion would cost $835 million.
When asked if the latest news made him nervous, Melfi said “I’ve been nervous all along. Until we see the building I’ll be nervous. I don’t have to explain the economic impact this means to the area and not just Girard and Youngstown. We’re looking to the future.”
The city and V&M are finalizing paperwork to have Youngstown spend up to $5 million to purchase the land, most of it in Girard, needed for the expansion, and have the company reimburse the city, Williams said.
The proposals would have been in front of the city’s board of control at its Thursday meeting except some minor changes need to be made, Williams said. The mayor added that the legislation should be ready for a board vote in the next 30 days.
V&M needs to negotiate the purchase of property near its Youngstown facility from Norfolk Southern for the expansion to occur. The purchase price could be as high as $20 million with much of the cost going toward the relocation of Norfolk Southern’s railroad line.
In addition to the $5 million land purchase, V&M received approval in December from the Ohio Tax Credit Authority for a $2.6 million tax credit for the proposed new location (a tax credit is a reduction in the amount of tax owed), and the PUCO last week agreed to have V&M receive discounted electricity at the proposed plant expansion.
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.
skolnick@vindy.com