No-interest loan is OK'd for downtown condos
City council will consider giving no-interest loans for two other projects.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- The city's board of control approved a 4 million no-interest loan to two companies converting a pair of downtown buildings into housing complexes.
The board also agreed Monday to provide a 12-year 100 percent real property tax abatement to the sister companies of Youngstown Wick and Management Parking LLC.
The companies are spending about 10 million to convert the Wick Building on West Federal Street and the Realty Building on East Federal Street into high-end apartment/condominium complexes with a completion date of March 1, 2008.
Last month, city council authorized the board of control to finalize a development deal with the two companies. Lou Frangos of Cleveland, the companies' primary owner, has said his companies have invested about 10 million in the city's downtown between buildings and parking decks and lots.
To get the 4 million loan, the companies needed an irrevocable letter of credit from a bank. The companies received that letter from Key Bank, said city Finance Director David Bozanich, who serves on the board of control.
If the companies default on the 4 million loan, the city would be protected by the bank's letter of credit, Bozanich said. The companies have 18 months to repay the loan.
At its Wednesday meeting, city council will consider legislation to have the board of control enter into a development agreement with Induction Professionals LLC and Special K Co. LLC, sister companies.
The companies repair and manufacture electric induction heating and melting equipment at the Salt Springs Business Park at a 3,000-square-foot leased property. The companies plan to build a 9,500-square-foot facility it would own at the Ohio Works Business Park off of Division Street. The building is expected to be finished by the end of this year.
The companies employ six full-timers and one part-time worker and would add four full-time employees and one part-timer over the next three years. The companies plan to invest about 600,000 for the construction of the building and the purchase of equipment.
The proposal in front of council Wednesday would give an interest-free loan of up to 600,000 if it obtains an irrevocable letter of credit from a bank as well as a 10-year 75-percent real property tax abatement, a waiver of building permit fees, water and sewer tap-in fees and provide a site development grant up to 19,000.
Council will also give another look Wednesday to a development agreement with Metalcrafts, a metal forming and specialty application company, to move from Hubbard into the Ohio Works Business Park. Because some council members wanted more information on the proposal, it didn't give emergency approval to the agreement at its meeting last month.
The proposal would give the board of control the authority to provide an interest-free loan of up to 1 million to Metalcrafts as well as all the other incentives being considered for Induction and Special K, except the site development grant would be up to 30,000.
At Monday's meeting, the board of control provided grants for exterior work to three businesses. The largest grant is 20,000 to the St. Vincent de Paul Society's thrift store on the corner of Wick and Rayen avenues. The store closed May 26 when up to 20 bricks fell from the top of the building. The society is making 113,000 worth of improvements to the building.
The board also approved paying about 40,000 to MS Consultants of Youngstown to conduct a property survey of the Ross Industrial Park on Albert Street. The city applied for a 5 million grant with the state's Job Ready Sites Program last month to upgrade the facility and attract manufacturing operations there. The park, owned by the Cafaro Co., was the only eligible location in Youngstown for this grant, city officials say.
The property survey is a requirement of the state program, Bozanich said. The city should find out if Ross will receive the state money by the end of next month, he said.