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Youngstown is in early talks to sell the city-owned 20 Federal Place building
YOUNGSTOWN
The city is in early discussions with the NYO Property Group, one of downtown’s largest property owners, on the sale of the city-owned 20 Federal Place office building.
The two sides recently have met twice, city Finance Director David Bozanich and Dominic J. Marchionda, NYO’s managing member, said Thursday.
“We exchanged our thoughts about what we’d like to see with the buildings,” Bozanich said. “We want to make sure the tenants are treated fairly and parking issues are resolved.”
Marchionda agreed with Bozanich’s assessment.
“We’re still going through the process of doing our due-diligence,” he said. “We’ve met with the tenants. Like the city, we want to make sure we have a good relationship with the tenants.”
Parking could be the key to the deal.
City officials say they’re not interested in including its parking lot on Commerce Street as part of the deal.
Marchionda said, “That building with its location and tenant base has to have parking” as part of the sale.
NYO was the only company to submit a proposal to purchase the downtown building at 20 W. Federal St. by an Oct. 3 deadline.
The company is offering $1,973,000 over six years to buy it.
Mayor John A. McNally has said several times that the city shouldn’t be in the real-estate business and wants to sell the building.
VXI Global Solutions, a call center and the largest employer at 20 Federal Place with 1,100 workers, doesn’t want the city to sell the building.
The city expects to make $347,000 this year on the operating side of owning 20 Federal Place. It turns an operating profit for the city because it collects $930,000 annually in income-tax revenue from workers at the building.
If another entity owned the building, the city projects a financial loss for that company because Youngstown would keep the income tax.
NYO’s proposal would have the company make a $200,000 down payment with 3.5 percent interest payments for six years. It would pay nothing but interest in the first two years, $52,500 annually.
In the third year, it would pay that same interest along with a $200,000 payment toward the principal. It would pay $200,000 principal payments in the fourth and fifth years with interest payments of $8,500 and $38,500, respectively, and a $900,000 payment with a $31,500 interest payment in the sixth year.
NYO’s financial offer hasn’t been discussed, Bozanich said.
Among the buildings NYO owns is the Wick Building, located next to 20 Federal Place. NYO is in the middle of a $16 million project to convert that vacant structure into a 52-unit rental and extended-stay facility.
NYO announced an agreement Wednesday to have a DoubleTree Hotel at the Stambaugh Building at 44 E. Federal St., another downtown building it owns. The $25 million project includes 120 hotel rooms, a restaurant and banquet facility. The hotel would open in late 2016.