$872K tax credit OK’d to lure steel-tube maker to Brookfield

By ED RUNYAN

VINDICATOR STAFF WRITER

BROOKFIELD — A tax credit worth $872,000 over nine years has been approved to encourage Ultra Premium Oilfield Services of Odessa, Texas, to invest $10 million in a vacant factory in Brookfield that would employ 120 people.

The Ohio Tax Credit Authority approved the Job Creation Tax Credit on Monday in Columbus. If the project moves forward, Ultra Premium will make tubular steel products used in oil and natural-gas exploration there, the Ohio Department of Development says. The tax credit requires Ultra Premium to maintain operations for 11 years.

The Youngstown/Warren Regional Chamber, which worked on the project, said it expects an announcement on whether the project will move forward “in the very near future.”

The company expects to have an annual payroll of $5.4 million within three years, with jobs paying about $22 per hour plus benefits, the Ohio Department of Development said. The company’s proposal calls for leasing an existing 128,000-square-foot building, but the location of the building has not been announced.

Walter Good, the Regional Chamber’s vice president of economic development, business retention and expansion, said Ultra Premium makes some of the same products as V&M Star Steel, which announced last week that it is moving forward with a $650 million expansion at its factory in Youngstown.

V&M Star Steel has about 500 workers who produce pipe mainly for oil and gas exploration.

“On the heals of V&M’s announcement last week, this is a big step in our efforts to land another significant Valley economic development project,” Good said.

One reason both companies are interested in the Mahoning Valley is because of the Marcellus Shale, a giant natural-gas field that is under eastern Ohio, much of Pennsylvania and nearby states, Good said.

Advanced drilling techniques have opened the Marcellus Shale to exploration, but such exploration requires production of a high-grade, smaller-diameter pipe, a V&M official said last week.

Good said Ultra Premium’s tax credit is calculated by multiplying 0.55 times the total of all employee payroll taxes. That amount is applied as a reduction of the company’s state Commercial Activity Tax, Good said. .

Ultra Premium is a subsidiary IPSCO Koppel Tubular Corp., which has operations in Beaver County, Pa., including a melt shop and tube-finishing facility in Koppel, Pa, just south of Ellwood City, and a seamless tube making and finishing plant 20 miles south in Ambridge.

IPSCO is a leading supplier of tubular steel products, the Regional Chamber said .

“Ohio is in competition with Pennsylvania for this project due to the company’s existing locations in Pennsylvania and the location’s proximity to suppliers,” the development department said in a press release.

“In order to locate in Ohio, Ultra will need to demonstrate a cost benefit to its parent company and suppliers, and the Job Creation Tax Credit heavily factored into this cost benefit,” it said.

Ultra Premium would make an investment of at least $9 million in machinery and equipment and $1 million for purchase of the building, the development department said.

David Bozanich, Youngstown finance director, said recently he expects other pipe operations to open in the area. These companies would buy pipe from V&M and perform finishing operations to prepare it for other uses, he said.

The Ohio Tax Credit Authority, a five-member independent board consisting of taxation and economic development professionals in the state, is responsible for reviewing and approving applications for tax- credit assistance and setting the benefit level. The program was established in 1993.

runyan@vindy.com