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Youngstown mayor mulls selling 20 Federal Place
YOUNGSTOWN
Mayor John A. McNally said he is “strongly considering the sale” of the city-owned 20 Federal Place downtown office building.
“I do not believe that government has the financial and personnel resources to serve as an efficient landlord over the long haul, and so over the next few months, the administration will begin the process of consulting with and seeking approval from city council to transfer ownership of this downtown asset,” McNally said Friday during his first State of the City address.
McNally, in office since January, spoke on a variety of topics during the speech at the Youngstown/Warren Regional Chamber breakfast at Our Lady of Mount Carmel Social Hall.
The city bought the former Phar-Mor Centre at 20 W. Federal St. in 2005 for $850,000. At the time, city officials said they purchased the building because there were no other buyers and it would have left one of downtown’s largest structures vacant.
Since then, every mayor — George M. McKelvey, Jay Williams and Charles Sammarone — have talked about selling the building.
In the past year, the city spent $1.5 million to replace three elevators and two floors of windows at the building and is spending $1.1 million on a new air-conditioning unit.
“All of these improvements have helped with the growth and retention of companies located within 20 Federal Place,” McNally said.
After the speech, the mayor said he’s instructed city Finance Director David Bozanich to start the process of seeking proposals from those wanting to buy the building.
The eight-story building’s occupancy rate is 75 percent, said T. Sharon Woodberry, the city’s economic development director.
Also, McNally talked about coming to a resolution to relocate the city’s municipal courts from the second floor of city hall, 26 S. Phelps St. The most-talked-about location is the city hall annex at 9 W. Front St.
The city’s judges filed a complaint with the Ohio Supreme Court nearly five years ago about conditions of the court facility. A hearing on their complaint is scheduled for March 17.
“Regardless [of] the outcome of those proceedings, I believe it is important to find the court a new home in order to create space for the return of city economic development, code enforcement, planning and demolition operations to city hall from” the annex and 20 Federal Place, McNally said.
The mayor also said the city would “begin exploring the ability to raise income through oil and gas development.”
By a 5-2 vote, city council authorized the administration in late 2012 to lease city-owned land for drilling rights. Sammarone proposed the idea as a way to generate revenue for the city, but didn’t pursue it when the city came to an agreement a few weeks later with Vallourec Star to pay $2.86 million a year to repay portions of money Youngstown spent to make infrastructure improvements for the company’s $1.1 billion expansion mill.
“While oil and gas development is a topic that raises concerns from citizens in and out of the city of Youngstown, the city administration has a responsibility to look at responsible ways to raise income to fund city operations, to fund the need for capital and infrastructure improvements, to raise money to provide funding for small business improvement programs, to fund demolition programs and to look at ways to reduce the income tax burden to city residents, city employees and the thousands of nonresident taxpayers,” McNally said.
After the speech, McNally said he wouldn’t permit drilling in city parks, and also would look elsewhere in the city with private business owners for fracking locations.
“Everyone says, ‘You’ve got to reduce the income tax,’” McNally said. “I’d love to reduce the income tax, but we need another steady income source to replace it.”