YOUNGSTOWN Redevelopment agency to ask city for $2.8M
Interest rates are low, but a bad financial forecast could hurt the city's credit rating and borrowing ability.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- The downtown redevelopment agency will seek $2.85 million this year from city hall to demolish more than a dozen buildings.
The agency, however, almost certainly won't get the money directly from the cash-strapped city. Instead, a more realistic possibility is that the city would borrow the money, according to one city official.
The finance, property and executive committees of the Youngstown Central Area Community Improvement Corp. approved the budget request Monday.
Uses for money: The funding would pay for removing environmental hazards, demolition and paving over a dozen dilapidated downtown buildings. The money also would cover routine maintenance on about a half-dozen other still-usable buildings.
"This implements ... the vision in the CIC's five-year plan," said Reid Dulberger, executive vice president of the Youngstown/Warren Regional Chamber of Commerce, which runs the downtown agency's office.
Plenty could be done this year if the money were available immediately, he said. It would take about nine months to remove hazardous material from the buildings and start demolition, he said.
That isn't likely, however.
Barbara Burtner, city finance director and a CIC board member, said she would love to set the money aside. The city, however, faces a serious financial crunch this year and maybe beyond, she said.
"We may have a couple tough years ahead," Burtner said.
About borrowing: There probably won't be much to give CIC from the general fund. Borrowing the money is a more likely route, she said.
Interest rates are low, making borrowing attractive, she said. It's too soon to know the city's financial condition, however. A bad forecast could hurt the city's credit rating and ability to borrow, Burtner said.
Mayor George M. McKelvey would have to agree to the borrowing, she said.
City council members have long complained that CIC hasn't made enough progress redeveloping downtown. A couple members proposed cutting ties with the agency a few months ago over the issue before backing away.
CIC has countered that the city hasn't provided the agency the money it needs to do that.
The budget proposal is CIC's effort showing what it will take to make substantial progress, said Mark A. Brown, property committee chairman and general manager at The Vindicator.
"This gives us a framework for the discussion," he said.
CIC is ready to do the work should the money be made available, said G. Richard Pavlock, the agency's president. Meanwhile, CIC is seeking outside funding.
"We are mobilized," Pavlock said.
The longer the city and CIC wait, the more expensive environmental and demolition work gets, he said.
What's suggested: Charles P. Sammarone, city council president and a CIC member, suggested that a private developer for the proposed downtown civic center could contribute cash to the project, $5 million, for example.
Half that money could be used for downtown demolition, he said, and the rest put toward the civic center.
The donation toward downtown work would be free from federal regulations, he said.
Sammarone also floated the idea of using some of the $26.8 million in federal funding secured for the center toward downtown work. Federal money might be left over if a private developer invests in the project, he said.
Using any federal funding is the last resort because of the strings attached, he said. Borrowing would be the easiest route, he added.
CIC's executive committee also voted to support requesting $2 million from the coming state capital budget for the Youngstown Business Incubator.
The money would go toward space for market-ready technology companies, Brown said. The proposal will be added to the regional list of funding priorities the chamber of commerce is assembling now.
The state funded two downtown demolition projects using the last capital budget. The state won't in the future, however, Brown said. Therefore, CIC is supporting the incubator's expansion plan.
The state capital budget is expected to be assembled in six to eight months unless mandated education spending eliminates the funding.