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Contracts approved for railroad project
YOUNGSTOWN
The city’s board of control approved two contracts for a major project needed by V&M Star for its $650 million mill expansion.
The more notable of the two is a contract for nearly $14.1 million with Great Lakes Construction of Hinckley for a railroad construction and relocation project.
The other is an $800,000 contract with MS Consultants Inc. of Youngstown to provide construction engineering, quality control and oversight for the project.
The board of control voted in favor of both contracts Thursday.
The money to pay for both deals comes from federal-stimulus money awarded for this project in March 2009. The work has to be done by late 2012 under the guidelines of the stimulus package.
Great Lakes will start work on the project by mid- to late August and take no more than 300 days to complete it, said Charles Shasho, deputy director of the city’s public works department.
Great Lakes beat out three other companies for this contract. It was the third time the city sought proposals for the project.
The city rejected four proposals in June 2010 because they were all significantly higher than the cost estimate.
The city rejected six proposals in November 2010 because the apparent low proposal failed to include a cost for two gate-crossing signals.
Two contractors threatened to sue the city over the bidding process if the apparent low proposal was accepted.
Also, attorneys from the city, the Ohio Department of Transportation, the state rail commission and the state attorney general recommended the board reject it.
The city opened proposals for the third time on June 15.
The project has a base contract for 28,000 feet of rail tracks, switches, crossovers, railroad ties and some storm-sewer work. The city also plans three add-ons for 16,640 feet of additional rail tracks that V&M would use to load, unload and store rail cars.
V&M is expected to have its new mill, located on property near its current site on Martin Luther King Jr. Boulevard, done by the end of the year.
The company manufactures steel tubes for the oil and gas industry.
MS Consultants offered the best of the four proposals obtained by the city for project management and inspection, Shasho said.
Also Thursday, the board of control approved a financial agreement with MS Consultants to help the company with a $1.5 million expansion of its 333 E. Federal St. office.
MS Consultants is building a 6,800-square-foot addition and renovating its existing 20,000-square-foot building.
The city board approved a 75-percent, 10-year real-property tax abatement that will save the company about $200,000 in taxes over the life of the abatement.
Also, MS Consultants will receive a $1 million loan from the city with an interest rate of 0.25 percent for up to 12 months.
Under conditions of the city loan, MS Consultants provided a $1 million, irrevocable letter of credit from an accredited lending institution. That guarantees that if MS defaults on the loan, the city would receive the money borrowed from that bank.