V&M repays $6.4M to city

Rail project will be rebid

By DAVID SKOLNICK

skolnick@vindy.com

YOUNGSTOWN

V&M Star paid $6.42 million to Youngstown to reimburse the city for the purchase of five properties that the company needs for its major expansion project.

The city will pay off a loan for that amount today.

Next, the city plans to spend about $4 million to build a 500,000-gallon water tower for the company’s use once the expansion is up and running in late 2011, said city Finance Director David Bozanich. V&M will pay all the expenses related to the tower after the project is done, he said.

Under the agreements, the city retains ownership of the properties and the water tower.

Meanwhile, the city will seek new proposals shortly for a railroad-relocation project needed by the company for its $650 million expansion project, Bozanich said.

The city had estimated the cost of that work at $13.56 million. But when it opened four proposals for that project, the amounts ranged from $18.18 million to $20.21 million.

V&M agreed to scale back the project by eliminating several rail switches and other items not essential to the company’s needs, Bozanich said.

“We feel it’s in the best interests of everyone to rebid it,” he said. “We believe [the new proposal] will fall within the original estimate.”

V&M Star wrote a check for $6,424,902.46 to Youngstown on Tuesday for the purchase of property and related costs, said Kyle Miasek, deputy finance director.

The city originally borrowed $5 million about a year ago to pay for land V&M needs for the expansion. That amount increased earlier this year to $5.9 million, and then to $6,424,902.46 for a final bill. The check from V&M takes care of the loan debt.

Of the total amount, $5,686,736.98 was for property purchases. The rest went for legal fees, engineering, site preparation and interest on the money borrowed, Bozanich said.

At a Wednesday meeting, the board of control approved paying $205,360 to MS Consultants, a Youngstown company, to design and then supervise the construction of the 500,000-gallon water tank to be built near V&M’s expansion plant. The tank would provide water for the new plant as well as the company’s existing mill off Martin Luther King Jr. Boulevard.

The water-tank project also includes new waterlines, Bozanich said.

MS was hired at the request of V&M, which is paying for the project, Bozanich said.

MS Consultants’ proposal states the water-tank project should take 16 months to complete.

V&M wants all the improvement work to its expansion site to be done by the time the new mill project is completed, Bozanich said.