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Deal for V&M key on land transfer
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Girard Mayor James Melfi
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Youngstown Mayor Jay Williams
If the dispute kills the potential V&M project, the area ‘may wear this scarlet letter for eternity,’ Mayor Williams says.
YOUNGSTOWN — If the fate of a potential $970 million V&M Star Steel project hinged on having 80 acres in Girard become part of Youngstown, Girard Mayor James Melfi said he would have heard that from company officials.
V&M officials want the Girard land, recently purchased by Youngstown for about $5 million to become part of Youngstown, said Jay Williams, Youngstown mayor, and David Bozanich, finance director.
If the land transfer doesn’t happen by Aug. 28, V&M will quite likely cancel the potential expansion plan, Williams said.
“If this deal goes down we will all be culpable,” Williams said. “We, the Valley, may wear this scarlet letter for eternity.”
The Vindicator first reported Saturday on the land dispute.
Melfi said V&M officials haven’t contacted him to express concern over his refusal to allow the 80 acres to become part of Youngstown.
“I don’t know [about this] firsthand from V&M,” he said. “If they’re so concerned, I imagine they’ll call me.”
Williams questioned the validity of Melfi’s comments, saying: “I am certain that representatives of V&M have expressed their frustrations to Mayor Melfi, and I suspect that those expressions may be increasing.”
V&M Star President Roger Lindgren couldn’t be reached Monday to comment. V&M Star officials have repeatedly refused to discuss this potential project publicly. V&M manufactures seamless tubes used mostly in the gas and oil industry.
Youngstown is calling the land transfer a “boundary-line adjustment.” Melfi says that’s a nice term for annexation, and he won’t let that happen.
Melfi said he had no idea Youngstown was buying the 80 acres until he read about it a few months ago in The Vindicator.
But Williams provided a document Monday to the newspaper signed Oct. 14, 2008, by Melfi that states Youngstown would acquire about 125 acres near V&M site “in both Youngstown and Girard” for this project.
The document, an “outline of proposed incentives” for this project, also states the two cities “will agree to relocate city boundary lines which will be beneficial to the expansion project. For practical purposes the proposed site will be located in Youngstown.”
The document states “Youngstown will work with Girard to offer a similar amount of acreage back to Girard should Girard be desirous of obtaining land.”
V&M wants Youngstown to have the property needed for the expansion “because of the ability for [Youngstown] 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,” Williams said.
Williams questions why Melfi would want to “sit on 80 acres of contaminated property rather than use it. Girard would be trading 80 acres of polluted property for $1 million a year in additional revenue. I don’t see a downside to that.”
If V&M moves ahead with the expansion project, it would hire about 400 employees making about $60,000 to $70,000 a year, Williams said.
V&M is considering an expansion near its Martin Luther King Jr. Boulevard location in Youngstown on the border between the two cities. Nearly all of the property for the expansion is in Girard.
If the expansion happens, the two cities would split a 2.75 percent income tax imposed on those working there as well as a profit tax of the same percentage from the company, Williams said.
Each city would get about $1 million annually, Williams said.
It would cost at least $5 million to clean up the 80 acres, Williams and Bozanich said.
“Girard doesn’t have the resources to clean up that site,” Williams said.
Williams added that Melfi “acknowledged that the 80 acres are essentially junk property with significant environmental liability.”
Melfi laughed when told what of Williams’ comments — saying they aren’t true.
“It can’t be considered junk property because someone [V&M] wants it,” he said.
Melfi also added that Girard could do this project without Youngstown, if that was needed. But he stressed that isn’t what he wants to do.
“We’re trying to work out what is best for the company and what’s reasonable and fair for both cities,” he said.
If this project fails because of a land dispute, it would severely damage the area, Williams said.
“The long-term implications aren’t good,” he said. “The next time we go to the state for money if this doesn’t work, the state won’t help out and point to V&M.”
The state helped steer a $20 million federal stimulus package allocation to help buy and improve property needed by V&M Star for this proposal as well as approve $2.6 million in state tax credits. Also, the Public Utilities Commission of Ohio approved discounted electric rates for the proposed new plant.
Williams and 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.
The company had planned to wait until the end of the year to make a final decision on an expansion.
skolnick@vindy.com
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Comments
$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.
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.
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."
Don't give up the land, Girard. They want to build a facility in your town and not pay any income to you. Someday someone will want to build on that land, that land is NOT worthless land as has been claimed.
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.
Am I missing something here or do all of these articles say the company will wait until the end of the year to make a final decision on the expansion? Is everyone getting worked up for a 'potential expansion'? It would seem to me that the city should have some assurances before going on a land buying spree. I'm all for business expansion, the city/county/state could certainly use it considering all the bad news related to jobs these days but it would make sense to have a firm commitment before spending considerable resources.
Mayor Jay is throwing his monkey wrench into the deal. There was never any mention of Girard actually transferring the property to Youngstown. It all sounds like a Mayor Jay setup to me. We need these jobs and Mayor Jay will be the cause of losing them for the valley. If I was Mayor Melfi, there is no way in hates I'd ever agree to give up those 80 acres to youngstown. Who ever heard of annexation of one city to another city's property?
They just better make up their minds & quick. The sooner they get this done, the sooner the rest of the V&M employees and the contractors can get back to work. It's been long enough.
UnionForever - Annexation of one city to another happens all the time. It happened in Columbus a lot.
Foxtrot - you have made some serious allegations. But since you are posting anonymously, I find everything you are saying hard to believe. I am not saying there isn't an ounce of truth, just wondering how much is your perspective as opposed to actual fact.
It seems we are surrounded by liars, deceivers and connivers. I am not sure who to believe. On the outside it seems simple. Girard should sell the 80 acres to Youngstown and get the deal done. 400 - 500 jobs are at stake. I don't believe for one instant if Girard did that they would walk away with nothing. All of the facts aren't being told and I am sure not going to believe anonymous posters.
Since I am sure there are more intelligent posters on here than me, how about someone post a solution to the problem at hand. Throw some ideas out there.
Thank you
Gosh - anybody out there who DIDN'T think this was going to happen sooner or later? We can't have two political entities side by side without them squabbling and fighting like the know-nothing peasants they are.
Williams wants to throw his weight around like he's Mayor Daley of Chicago, and Melfi has to have his ego stroked at every step. Shameful.
DeathBefgore Dishonor - why should Girard give up the property taxes that would be generated by the V&M project for a cut of the income taxes? They should now holdout for all the income tax money and property taxes on the 80 acres. What ever happened to regionalization of the valley? Mayor Jay has once again shown his true color with this action and it has Girard seeing RED!!!
It seems there is one person not being truthful in the article.
"Melfi said he had no idea Youngstown was buying the 80 acres until he read about it a few months ago in The Vindicator.
But Williams provided a document Monday to the newspaper signed Oct. 14, 2008, by Melfi that states Youngstown would acquire about 125 acres near V&M site “in both Youngstown and Girard” for this project."
Politics at its finest could wind up costing the area. I didn't realize Girard was using the land for something important.
I'm not sure, but there may not be any property tax to be paid for quite awhile. Tax breaks are usually part of an overall package to a company for locating in a city. That area used to be an "Enterprise Zone" years ago which awarded an incoming business substantial tax reduction or abatements for extended periods of time. I don't know if it's still in existance or not.
Don't the City Councils from the 2 cities in question have a say in what goes on here? How come we're only hearing what the Mayors have to say?
Youngstown purchased the contaminated land for 5 million. It needs at least another 5 million to clean up. Youngstown retains all the environmental liabilty. All of this done before Girard agrees to release or swap properties. Seems like the way the Covelli Center property was aquired. Is Jimbo involved in this? Sounds like a sweet deal to me.
Another thing, V&M is getting an electricity discount that we as consumers are going to be charged extra for to make up the difference.
THANK YOU, DAVE! I thought I was the only one who remembered that. Yes, we're all going to have our electric bill raised so V&M can have a cheaper electric rate. How the {insert favorite cuss words here} can the PUCO be on board with that? How was it okayed without anybody's knowing, until it was a done deal?
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.
JimFrank - Hate to tell you this, but Girard, Youngstown, Warren, Howland, Poland, Canfield, etc., are all part of one big metro area. When companies come calling, they dont want to see parochialism. They want a community to come together to get the job done. We have to get over this idea that one community is soo radically different from the one next door.
"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."
- Your "family" mentality is a great indicator of why Girard is in the red and has been for a decade.
- Who the hell is stealing anything, Y-town has to pay for the land and 5 million seems more than nominal for the land.
- Stop watching movies and try and educate yourself on something.
- "Terra Firma" - give me a break, too much Braveheart for you.
I would like to hear V&M's side of the story. That seems to be the missing piece, and oh what a large piece.
You out-of-towners seem to think that by taking from Girard what is lawfully ours, and giving it to a nefarious neighbor city, who is not part of our family, will in any way benefit us. This will only benefit Youngstown and damage Girard. Our 2% tax is fairer than their 2.75% tax. We in Girard have only been elected to look out for GIRARD interests, NOT regional interests. Long live the Gs.
Doc - V&M is smart to stay out of this circus. Theirs is a business decision, and they need to stay above the fray.
Foxtrot, how does Girard benefit when that property grows more weeds and nothing else. Do gophers pay 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'm not in favor of Youngstown getting any more land than it currently has. However, IF what Jay is saying is true of V&M having to have the entire site "in Youngstown", isn't there a magic price or deal that Girard can work out that will benefit Girard for years to come?
It seems that Youngstown keeps expecting things to go their way. Why doesn't Ytown offer something that is lucrative and continuously beneficial to Girard?
Melfi is 100% correct in opposing this annexation. If this deal goes through, then Campbell had better be ready for it's "boundary adjustment." When Youngstown demands land from Austintown, the precedent will have been set.
V&M is not actually going to expand! This is one big scam to seize land from Girard so V&M can re-arrange their yard. No jobs will be created, and low-paid contractors will be the only workers on that land. Girard is already being screwed out of tax money right now. Many contractors enter the site from Youngstown and work in Girard, especially in the part of the yard they call "Siberia," and Youngstown gets all of the tax revenue. The taxpayers have really been fleeced on this one. 125 acres for $20 million equals $160k per acre. All to subsidize a foreign-owned non-union steel mill run by liars that exploits its workers.