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Preparations for V&M Star project continue despite lack of agreement
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Youngstown finance director David Bozanich
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Girard Mayor James Melfi
Youngstown hired a company to clear 85 acres of land needed for the potential expansion.
YOUNGSTOWN — Money is being spent for improvement work to a site needed by V&M Star Steel for its potential $970 million expansion project even though a land agreement between Youngstown and Girard needed for the project remains unsigned.
Youngstown Finance Director said there are “some minor issues” with Girard that need to be worked out. He declined Monday to disclose the issues.
“We’re still optimistic we can get a deal done,” he said.
Girard Mayor James Melfi also said a deal will be finalized, but doesn’t know how long it will take.
“I don’t see any major stumbling blocks,” he said.
But when asked if he agreed with Bozanich that the issues are “minor,” Melfi said: “I wouldn’t say major or minor. The language in the contract needs to be finalized and the [financial and acreage] numbers are issues.”
V&M Star officials have expressed concern to officials in Youngstown and Girard about signing a deal very soon on land needed for its potential expansion.
After much bickering, the two sides reached a tentative deal last month after meeting with V&M Star officials.
That satisfied V&M officials at the time.
But Bozanich acknowledged Monday that “the company is desirous of getting the deal done.”
At issue is V&M officials want all the land for a potential expansion — about 160 to 192 acres, depending on who you talk to and when you talk to them — to all be in Youngstown. Nearly all of it is currently in Girard.
The final agreement between the two cities will include language that splits a 2.75 percent corporate-profit tax from V&M and a 2.75 percent income-tax collection on employees at the potential expansion site.
V&M officials have repeatedly declined to discuss the proposed project, which would cost about $970 million and employ about 400 new workers. A decision by the company is expected in December or January.
On Monday, Youngstown’s board of control approved a $253,324 contract with a company to clear trees, roots, bushes and grub on 85 acres of land V&M Star Steel would need for its potential expansion.
Marucci and Gaffney Excavating of Youngstown submitted the lowest proposal among three companies vying for the job. The project’s estimated cost was $350,000.
The work will begin as early as next week and take up to 30 days to finish, said Charles Shasho, the city’s deputy director of public works.
Also Monday, the board of control approved a contract to have the Ohio Department of Transportation oversee about $8 million to $9 million worth of work to those 85 acres as well as about 25 additional acres as part of the potential V&M project.
That work would include: expanding railroad lines, site excavation, site grading, and the construction of storm sewers. The state DOT will open proposals for that work Oct. 9 with the work done at the end of January 2010, Shasho said.
The state would use money obtained through the federal stimulus package to pay for most — and possibly all — of the work.
The state received $20 million in federal stimulus funds for the V&M project.
A recent re-evaluation of the project reduced that amount to $18 million, Bozanich said.
Expenses such as retention ponds, water line and wastewater extensions aren’t covered under this $20 million federal stimulus grant, he said.
If the cost of this project exceeds $18 million, the city would pay up to $2.6 million to cover the rest under legislation approved Monday by the board of control.
But Bozanich said the state has committed to covering any cost for this work exceeding $18 million. A written contract on the state covering any amount over $18 million will be signed shortly, Bozanich said.
“We have drafts of the [state’s] commitment and we’ll have [an agreement] signed in two weeks,” he said.
skolnick@vindy.com