Wednesday, February 25, 2015
YOUNGSTOWN
The sale of 20 Federal Place by the city is dead.
Mayor John A. McNally said he told the NYO Property Group, the only company to submit an offer to buy the downtown office building, on Tuesday that the city had rejected its offer.
VXI Global Solutions, a call center that is the largest tenant at 20 Federal Place, along with other businesses there “had concerns about the city selling the building and the impact it would have on their [lease] contracts,” McNally said. “20 Federal Place is an anchor building for the downtown, and it’s better that the city remain its owner.”
McNally has spoken about selling the building at 20 W. Federal St. going back to his successful 2013 campaign for mayor. But after getting only one proposal during two attempts to sell the structure, McNally said the city won’t try again to put 20 Fed back on the market.
“I’m not entirely thrilled with the city being a landlord, but we need to do what’s best for the city, and this is what’s best for the city at this point,” he said.
Dominic J. Marchionda, managing member of NYO Property Group, couldn’t be reached by The Vindicator to comment. McNally said he spoke to Marchionda who said “he was fine and he understood” the city’s decision.
NYO’s proposal was to buy the building for $1,973,000 over six years.
NYO’s proposal called for the company to make a $200,000 down payment and included 3.5 percent interest payments for six years. The company, one of downtown’s largest landlords, would have paid nothing but interest, $52,500 annually, in the first two years.
In the third year, NYO would have paid that same interest along with a $200,000 payment toward the principal. It would have paid $200,000 in principal in both the fourth and fifth years with interest payments of $45,500 and $38,500, respectively, and a $900,000 payment with a $31,500 interest payment in the sixth year.
A key deal-breaker was that NYO wanted a parking lot on Commerce Street, near the back of the building, to be part of the deal, but city officials weren’t interested in selling it.
NYO was the only company to submit a proposal to purchase the former Phar-Mor Centre by an October 2014 deadline.
The city failed to get any offers when it first tried to sell 20 Federal Place in June 2014 with a minimum asking price of $2 million. The second time, the city removed the minimum amount.