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Youngstown gets one offer to buy 20 Federal Place
YOUNGSTOWN
NYO Property Group, one of the largest owners of downtown buildings, was the lone company to submit a proposal to purchase the city-owned 20 Federal Place office building, offering to buy it for $1,973,000 over six years.
Meanwhile, VXI Global Solutions, a call center and the largest employer at the 20 W. Federal St. building, urged the city not to sell the structure.
“With a new owner, the long-term viability of VXI in this location may be jeopardized as a new owner attempts to generate profitability under the current situation,” Greg Ouimet, the company’s vice president wrote in a letter in response to the city’s request for proposals to buy the building.
Friday was the deadline to submit proposals to buy the building the city has owned since 2005.
If the city decides to sell 20 Federal Place, the former Phar-Mor Centre, VXI would “have an interest in negotiating an agreement with the city that would provide protection through subsidies, for a specified time period, to make up for losses as the existing lease matures,” Ouimet said.
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.
City Finance Director David Bozanich said one of the top priorities of any sale of the building is to maintain VXI’s presence there and to help it grow. The company employs 1,100 at the downtown Youngstown building, which make up about 80 percent of the jobs there, he said.
“The jobs and the long-term viability of the building are more important than the sale price,” Bozanich said.
The city failed to get an offer for the building when it first tried to sell it in June with a minimum asking price of $2 million.
This time, the city removed the minimum price.
NYO’s proposal has the company making 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.
The company also wants the city-owned parking lot on Commerce Street as part of the deal. City officials have said they’re not interested in giving up that parking lot.
When asked about NYO’s proposal, Bozanich said city officials would review it, but added it failed to address issues about long-term development, investing in the building and ways the company would maintain a good relationship with VXI.
NYO owns numerous properties, including the Wick Building, located next to 20 Federal Place. Wick is undergoing a $16 million project to convert the vacant building into a 52-unit rental and extended-stay facility.
The company also owns eight other downtown buildings including Erie Terminal Place, Realty Towers, Metropolitan Savings and Loan Building and the Stambaugh Building.