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City to consider loan to company
YOUNGSTOWN
City council will consider legislation Wednesday to lend $233,000 to a food-packaging business expanding on East Federal Street.
Mayor Charles Sammarone is sponsoring an ordinance to have council authorize the 12-month loan with an interest rate of 0.25 percent to Valley Foods. The city’s board of control must provide final approval.
Overall, $1.75 million will be spent to convert the former Weatherbee Coat Factory building into a dry-storage area and packaging location for Valley Foods, said John Valley, the company’s chief executive officer.
Valley Foods purchased the property at 439 to 461 E. Federal St. on Feb. 8, 2011, for $226,000 and made about $350,000 worth of improvements to the building.
The improvement work at the East Federal Street location should be done in about 60 days, Valley said.
The company initially will use the 17,000-square-foot lower story of the two-floor building and hire at least 10 employees, Valley said. The upper floor, also 17,000 square feet, could be used in the future for expansion or leased to another business, he said.
Valley Foods sells fresh, frozen foods to customers such as school systems and the military.
It is keeping its company headquarters at 335 E. Boardman St.
The $233,000 loan from the city is needed to cover costs related to improving the East Federal Street location, Valley said.
Under conditions of the city loan, Valley Foods must receive a $233,000 irrevocable letter of credit from an accredited financial institution. If the company should default on the loan, the city would receive the money borrowed from the bank.