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V&M deal hits snag
Girard doesn’t want about 80 acres of its land to become part of Youngstown.
YOUNGSTOWN — A dispute between Youngstown and Girard could jeopardize a potential $970 million expansion project by V&M Star Steel.
At issue is about 80 acres in Girard near V&M on Martin Luther King Jr. Boulevard in Youngstown.
Youngstown recently purchased the largely vacant land for about $5 million so that V&M could use it for a potential expansion. The company will reimburse the city for the purchase.
Youngstown Mayor Jay Williams said V&M Star officials want that land to become part of Youngstown — though it would stay in the Girard school district — as part of a “boundary-line adjustment.”
Girard Mayor James Melfi said he doesn’t support moving the boundary because it’s nothing more than annexation of Girard land to Youngstown.
“We have a problem,” he said. “I don’t want to give up the acreage. We want to do everything to be fair to the company and both cities. But the expansion project is in Girard. We’re trying to work out a cooperative agreement. We absolutely don’t want to lose the project, but we don’t want to lose out on what Girard is entitled to. It’s unfair to ask Girard to give up our land.”
V&M Star President Roger Lindgren couldn’t be reached Friday to comment. V&M Star officials have repeatedly refused to discuss this potential project publicly.
V&M, which manufactures seamless tubes used mostly in the gas and oil industry, hasn’t given a firm commitment to the expansion project. A final decision from the company on the project is expected by the end of the year.
Williams and city Finance Director David Bozanich said V&M officials have told them the Youngstown-Girard location is the company’s preferred site if the company moves ahead with an expansion project.
That was until the boundary dispute arose.
V&M has given the two cities about two weeks to come up with a solution.
“They have an expectation this will be worked out quickly,” Williams said.
“It’s unfair for us to make these types of decisions in a few days,” Melfi said. “We were placed in a corner.”
V&M Star wants the 80 acres in Youngstown, Williams said, “because of the ability for us to get it done through federal stimulus funding, our economic development history, our ability to acquire the parcels and because the city is accepting the environmental liability of that property.”
The initial cleanup cost of the 80 acres is estimated to be $5 million, Williams said. The city would seek state funding to pay for the cleanup.
On Wednesday, Youngstown City Council authorized the board of control to move ahead with a boundary agreement with Girard. The board won’t take action until a deal is made with Girard, said Williams, its chairman.
But Melfi said Youngstown council’s vote raised concerns for him.
“We’re trying to figure out a way” to resolve the issue if Girard refuses to give the land needed by V&M to Youngstown, Williams said.
Williams, Bozanich and Melfi declined Friday to discuss other options except to say they exist.
“We’re going to propose solutions that address everyone’s needs,” Williams said. “I’m concerned about this. Everyone [involved in the project is] concerned.”
Bozanich added: “The project is, by far, too important to be caught in any issues regarding the inability of government to make this work. It’s incumbent upon both communities to make this project work.”
There is also concern that if the project dies because of this issue, Youngstown would have to give the state a $20 million federal stimulus package allocation it received to buy and improve railroad property on the V&M proposed expansion location.
At one point, the two cities planned to create a joint economic development zone at the company’s expansion site. That would have allowed the two cities to split a 2.75 percent income tax placed on those working at the location. V&M’s expansion would create about 400 jobs.
But attorneys working for Youngstown recently discovered that state law doesn’t permit joint economic development zones to be created between two cities with different income-tax rates, Williams said. Youngstown’s income-tax rate is 2.75 percent, and Girard’s is 2 percent.
“There is a shortcoming in the JEDZ language,” Williams said.
Action by the state Legislature to add that provision to the joint economic development zone law would be needed, Melfi and Williams said. Approval could take up to a year, the mayors said.
Melfi said he doesn’t want to give Youngstown the property and have the cities sign an agreement to share the income-tax revenue because that deal may not be legally binding.
“All of the burden is on our small city to make sure the agreement is fair,” Melfi said. “The complication is on our side of the border.”
skolnick@vindy.com
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Comments
Give up the land, Girard. You took a lot more than 80 acres from the townships when you purchased the worthless lakes.
http://girard.urbanup.com/4133799
And yet another Youngstown project goes the way of the dodo because of bureaucratic bickering. As if this project ever had a chance anyway.
V&M is too good for Youngstown. Is it located next door to the Blimp Factory?
Sounds like just another sneaky attempt on the city's part to take as much money as possible from outlying communities (remember the famous JEDD's proposed by Youngstown to Boardman and Austintown, and the one with Liberty concerning the new Wal-mart?). Those communities realized they (the JEDD'S) had absolutely NO benefit to them, and that it was nothing more than an attempt by the city to have it's problems fixed by those other communities. Don't blame Girard.
If Girard doesn't want to give up the land, then tell V&M to take their project elsewhere. V&M Star is a non-union sweatshop anyhow. They farm most of the labor out to "contractors" who they pay a substandard wage to and treat like dogs. That will teach Youngstown to buy land outside its corporation limits and expect to annex the land.
Don't give up the land, Girard. They want to build a facility in your town and not pay any income to you. For $20 million, Youngstown could have leveled off a large area on the south side; enough land area to site several Exal-sized facilities. Youngstown can annex Boardman and Austintown if it really wants more income tax revenue. So what if they bought land in your town, Girard. It is still your land and you are entitled to any income taxes from anything sited on it. At a rate of 20 jobs per acre, 80 acres should yield 1600 jobs. How many jobs per acre does downtown yield? It is a lot more than 20 per. This project has a low density of jobs per acre. It uses up a lot of land, and the jobs provided will all be low $ per hour jobs. Brentwood Originals is a more efficient use of land on a "tax revenue per acre collected" basis.
Here's a novel approach....give Girard the land that V&M currently sits on in Y'town.
Another $$$ grab attempt by Mayor J....good thing the expansion isn't going to happen anyway...
Maybe Y'town should lower their income tax to 2% and give Y'town people a break.
It seems to be standard practice in politics to make promises, collect funds, and spend taxpayers money without even having any contract with a shady company guarantying their obligations.
To top it all off, wait 'till the last moment to go for another land grab. In a different county no less.
Hey, why limit that to just ajoining counties, I hear there are some plots in Franklin Co. available. Why limit that thinking to just Ohio, maybe someone could sell JEDD to get some land off of Grove City.
The next part of this failed plan will be to try and make Girard look like the spoiler rather than take responsibilty for a huge amount of poor planning.
The main reason they want it all in Youngstown is so their contractors, which includes: Goodman Personnell Services, Industrial Mill Maintenance, and Reinnovations, can pay local income tax only to Youngstown for all of the virtual slaves they employ there. The only contractor involved in the operation down there that is in Girard is Olympic Mill Services. Olympic Mill is the only group that has unionized. The "protected class" of workers that work for V&M itself are mostly racist, and nearly all live outside the city of Youngstown. It's suprising the Steelworkers union hasn't made a fuss over the use of taxpayer money to support a non-union sweatshop.
"That would have allowed the two cities to split a 2.75 percent income tax placed on those working at the location."
2.75%, no wonder the area has economic difficulties. That is beyond the realm of cognizant thought.
No tax base? I wonder why?
"The "protected class" of workers that work for V&M itself are mostly racist". Foxtrot, what the heck does that have to do with anything! How can you possibly bring race into this?! You are an idiot!
I'll tell you from my personal experience, as I worked there for nearly 5 years. Only 5 or 6 of the 400+ V&M Star workers are minorities. A large number of the workers that V&M has hired have been from Columbiana County. I heard to n-word used by management literally hundreds of time while I was employed there. The contractors there hire many minorities, especially at Tubescope/ICO. Ask anyone who has worked there for any length of time if the management is racist or not. The place is owned by the French and Germans, and Lindgren himself I took to be an anti-semite. Go ahead and call me an idiot, I'm just stating the facts from what I've seen first-hand.
The City of Youngstown are the idiots; buying land outside of city limits, spending a fortune to clear it, and then expecting another incorporated political subdivision to agree to give up the land; all for a project that MAY create relatively few jobs per acre. They are doing it to subsidize a foreign-owned corporation who are operating a non-union steel mill. The contractors who supply labor to this racist operation pay their workers a substandard wage, and every attempt is made to prevent the workers from unionizing.
The fact is that the two cities would split all the income tax proceeds down the middle. The land would remain in the Girard school district and property tax on that land would continue to be paid to Girard, Trumbull County and the Girard school district. Right now it's a worthless piece of property, but with $20 million in improvements from stimulus funds and 500 additional high-paying jobs, would net Girard hundreds of thousands of dollars in revenue per year. It's a no brainer and it's about collaboration. That's what we need in this Valley to survive not communities that just want to build fences around themselves.
$20 million for 80 acres equals $250k/acre for "improved property." The city paid $5 million for 80 acres, or $62,500 per acre. With 400 jobs created, that is only 5 jobs per acre. This entire deal is a fleecing all of the way around. For $20 million, the city could have leveled a HUGE parcel on the south or east sides. The stupidest part is the city committing to buy the land before V&M committed to building the "expansion." V&M will get this land and do nothing with it.
Foxtrot - You must have quit your well paying job at V&M or got fired for 1) sleeping on the job
2) failing to work 3) failing a drug test 4) or simply not showing up for work. It really takes a repeat offender of the above to get fired. My husband has worked there for many years, achieved a MASTERS degree at V&M's expense, moved up the ladder. The crummy wages that you speak of have enabled us to buy a home here, as well as a vacation home, two new vehicles, as well as put our daughter thru college. Either you never worked there and just want to complain OR you were a slacker.
Even though V&M is non-union, they ARE a good company to work for. They DO treat their employees well, thus, no need for a union. As far as a "sweat shop"....surely you didnt expect it NOT to be sweaty working in a steel mill. 400 jobs is 400 jobs...why compare bodies to acres. With the high rate of unemployment in Ytown....any jobs would be welcomed.
My job at V&M was NOT well-paying, nowhere close to what I make now. While it is true that the V&M people are paid more than the contractors, most of the actual work is done by the contractors. V&M has that place chopped up into many contract labor suppliers, who treat their workers like dogs.
Girard gets screwed over on the local income taxes as it stands now. All V&M workers and most of the contractors enter the work site from Youngstown. However, many of these people do work in Girard, and Girard doesn't get any income tax from them.
The only reason unionization efforts have failed there thus far is that V&M goes out of it's way to see to it that the V&M employees themselves do no physical labor. All physical labor is left to the contractors, who are exploited.
Why compare jobs to acres? If the city would make better investments, that is spending its money economically to aquire land at reasonable prices and providing the land to concerns that will develop the land to a higher density, a greater number of jobs will be created and higher tax revenues will be collected. This deal has cost them $50k per "job that MIGHT be created."
Hey it's stimulus money, who really cares other than those that have to pay for government waste?
The NS railroad was using part of the 80 acres, and had several jobs located on the land. This stimulus money has paid them to relocate these jobs to another region. This "expansion" was never going to happen, it was just a big lie to get the taxpayers to subsidize V&M's land purchase. They needed more yard area for the contractors they employ at $9-$10 an hour to load trucks.
Let me give you all some insight into V&M Star from someone who worked there as a contractor for nearly 5 years. First of all, less than 2% of all V&M employees are minorities. The management is all white, racist, and nearly all from Columbiana County. A high percentage of all V&M workers are from Columbiana County, and I was personally told that to be "hired in" to the company, it was practically a requirement that a person had to be a Republican from Columbiana County. I heard the n-word used repeatedly by workers and management, and I was referred to as a "yid" due to my Jewish backround. All areas of the mill are interwoven with labor "contractors" who do nearly all the physical labor. This is done so that any one group who tries to form a union can be eliminated and replaced with another group of "contractors." Oily waste sludge was also knowingly discharged onto the ground in L-bay, in violation of state and federal laws.
foxtrot, sounds like you had a case for better pay. Tell them you want better pay or the epa might be finding its way out to L-bay.
Girard is like one big family. The mayor of Youngstown is trying to steal land from the family. Lets not let these out-of-towners steal our terra firma. This concern can show that it is loyal to the family by building their works here in OUR city. They can pay US our share of taxes.
Let us analyze this whole situation. Stimulus money was used for one political subdivision (Youngstown) to buy property in another (Girard). Stimulus money was used to pay a business that was located on a portion of that land (NS railroad) to relocated somewhere else, thus causing a loss of tax revenue to Girard. Now Youngstown wants to take the land from Girard, so Youngstown gets all of the income tax and Girard gets none.
What this all amounts to is that when V&M erected their new baghouse, yard space was lost. Now to expand their yard and re-organize their shipping department, they have concocted this "expansion" scheme to use public monies to aquire more land. It isn't completely obvious that workers are entering the jobsite in Youngstown and working in Girard now, but when there yard is expanded and closer to 422, it will be completely obvious that workers are working in Girard and Girard is getting no income taxes from them. That is why they are in a hurry for Girard to give up this land. Melfi is 100% right for opposing this annexation.
I am still not sure why race is an issue! Foxtrot, you are the reason the NAACP and the ACLU have nothing better to do than complain about how the the so called "MAN" is keeping all the lazy bums down!!!!
Girard is being screwed over on this deal. Look how quick council is willing to sell them out. Under law, 2 communities cannot share income tax on any given parcel without a JEDD. A JEDD is not possible because Girard's 2% and Youngstown's 2.75% tax rates are different. A parcel can only sit in one political subdivision at a time. Winner takes all. Soon Youngstown will be looking to other neighboring communities for "boundary adjustments." This sets the precedent. Campbell, Struthers, Boardman, Austintown, Hubbard, and Liberty beware.