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Youngstown plans to negate CVS deal
A CVS spokesman says the North Side store will open even without the abatement.
YOUNGSTOWN — City council is prepared Thursday to repeal a $236,007 tax-abatement given to CVS for its soon-to-open North Side store because the company is shutting down its business on the East Side.
City council also will consider legislation at its Thursday meeting requiring CVS to pay more than $10,000 in fees the city waived for the North Side store as part of an economic-incentive package.
City officials recently received information from workers at CVS’ Oak Street store on the East Side who told them that store was closing Saturday.
The new $4.8 million store on Fifth and Park avenues will open Sunday.
“The city’s intent [with economic-incentive deals] is to create new investment and new jobs,” said city Finance Director David Bozanich. “We were somewhat dismayed this is a relocation of a store instead of the establishment of a new store. After discussions, we decided that the proper action would be to take away the incentives. They were offered under the idea it would be a new facility. We would have appreciated full disclosure from the beginning.”
Mike DeAngelis, a CVS spokesman, said the company has: “Always been up front about it being a relocation. It was always supposed to be a relocation. I can’t speak as to why the city is indicating otherwise. We were up front with the city.”
But city officials say that isn’t true, and that neither CVS nor Orion Development, the company building the store, told them the East Side store would close.
Attempts Tuesday by The Vindicator to reach Ken Hrabar, an official with Orion Development, was unsuccessful.
“It’s a misrepresentation of the facts,” said Councilman DeMaine Kitchen, D-2nd, whose ward includes the East Side. “They never said this was a relocation. I’m not going to give you an incentive to relocate.”
Mayor Jay Williams said: “It would appear they’re closing the East Side store as a direct result of opening on the North Side. It’s of great concern to us.”
If legislation is approved Thursday, the store’s 75-percent, 10-year tax abatement would be repealed. The company was to save $236,007 and pay $78,669 in real property taxes over the life of the 10-year abatement.
“We will certainly have dialogue with local officials,” DeAngelis said. “We’re opening the store with or without the abatement. If there’s a misunderstanding with the city, we regret that.”
Also, the city waived a $4,509 building-permit fee for the construction of the store and about $6,000 in sewer, wastewater and water tap-in fees for the building.
Council will consider legislation Thursday to authorize Law Director Iris Torres Guglucello to “take all necessary action to recover all waived permit fees.”
The tax-abatement application for the $4.8 million store said it would employ 12 to 15 full-time employees and 10 part-time employees. The East Side store employs seven full-time employees, DeAngelis said.
Those at the East Side store are moving to the new facility along with three new hires, he said. CVS plans to hire more for the store in the foreseeable future, he said.
skolnick@vindy.com