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Youngstown seals deal on V&M
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V&M Star Steel
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Youngstown Mayor Jay Williams
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Girard Mayor James Melfi
An estimated $20 million in site improvements could begin within two weeks.
By Harold Gwin
YOUNGSTOWN — An agreement between Youngstown and Girard that could lead to a nearly $1 billion industrial development project along the boundary of the two cities is “a significant step forward for the Mahoning Valley,” said Mayor Jay Williams.
The city controlling board, of which Williams is a member, approved the Cooperative/Joint Economic Development Zone Agreement on Tuesday, a day after Girard City Council approved it.
Youngstown City Council approval isn’t needed as that body authorized the city controlling board, which also consists of the law director and finance director, to act on the city’s behalf.
A formal signing of the document by officials from both cities is set for 10 a.m. today in the Youngstown/Warren Regional Chamber offices in downtown Youngstown.
The deal sets a new precedent for the Valley in economic development, Williams said. It could provide economic benefits for years to come, and it shows the Valley is “ready and willing to do business,” he said.
Both national and international media have been checking on its progress, he said.
The agreement clears the way for a proposed $970 million, 400-job expansion of V&M Star Steel operations in Youngstown.
The company has expressed interest in putting that expansion here but is also looking at sites in Houston, Brazil and perhaps other locations.
Williams said the latest information he has is that a decision from the company is expected by the end of the year. Meanwhile, local, state and federal officials are lobbying the company to use the Youngstown site, he said.
The agreement annexes 191 acres of land in Girard adjacent to V&M Star Steel to Youngstown. It also spells out how tax revenue from the proposed project will be divided between the two cities.
Williams said the deal will immediately allow the spending of $20 million on infrastructure improvements to the building site, including roads, sewers, water lines, railroad lines and more. Most of that funding will come from federal stimulus money, he said.
That work could begin within the next two weeks and will provide as many as 500 temporary construction jobs, bringing a one-time income tax windfall of perhaps $3 million to Girard and $2.5 million to Youngstown, Williams said.
If V&M builds here, the two cities will share equally in the corporate profit tax once the tax amount surpasses a $3.85 million annual threshhold. They would also split the income tax from the 400 new employees, which could mean between $500,000 and $1 million a year for each municipality, he said.
The land will become a part of Youngstown, but will remain as part of the Girard school district, which could receive between $1 million and $1.2 million in annual property taxes if the project is built.
If V&M opts to build elsewhere or cancels the project outright, the site will still be a prepared industrial park with Youngstown and Girard as partners, Williams said.
The mayor said it was V&M Star Steel that insisted the entire project be built on land in Youngstown, if it comes here. The company has a longstanding relationship with the city, the federal stimulus money being used to prepare the site has to be spent in Youngstown, and Youngstown has a track record for cleaning and preparing brownfield sites, he explained.
SFlbgwin@vindy.com