The involvement of city council members ‘was damaging’ to the negotiations, Girard’s mayor said.
YOUNGSTOWN — Girard stands to make millions of dollars if V&M Star Steel decides to build a $970 million expansion, but James Melfi, its mayor, wanted more for his city and is not happy with a deal reached to help bring that project here.
“I will never be pleased with how this worked out,” Melfi said Thursday.
Girard and Youngstown reached a deal late Wednesday to share the 2.75 percent corporate-profit tax that would come from V&M’s potential expansion. They had earlier agreed on how to split the income tax paid by workers.
Girard City Council will consider the agreement at its Monday meeting. The Youngstown Board of Control will vote on it Tuesday. An official signing ceremony is planned for Wednesday.
The deal came late Wednesday after about 51‚Ñ2 hours of negotiations.
“It’s fair and equitable,” Youngstown Mayor Jay Williams said.
At issue was determining the average annual profit tax paid to Youngstown by V&M for its current Martin Luther King Jr. Boulevard plant. That amount would determine how much additional revenue from the 2.75 percent corporate-profit tax would be shared between Youngstown and Girard if the addition is built.
The lower the average number, the more money Girard would receive.
Youngstown wanted to use $4.105 million as an average amount paid each year by V&M. After that was rejected by Girard, Youngstown reduced the amount to $3.95 million a year. The two sides agreed Wednesday on $3.85 million, Melfi, Girard Councilman Joseph Shelby, D-at large, who served as council’s representative during the V&M negotiations, and others involved in the negotiations confirmed to The Vindicator.
Melfi had wanted the figure to be $3.325 million a year.
If V&M builds the expansion here, any amount of annual corporate-profit tax it pays over $3.85 million would be split evenly between the two cities.
Under the deal, about 191 acres of land in Girard — that Youngstown purchased earlier this year — would become part of the city of Youngstown. V&M officials insist any potential expansion be on property owned by and located in Youngstown. The land remains in the Girard school district, which would receive about $1 million to $1.2 million annually in property taxes, Melfi said.
V&M expects to decide by December or January whether it will move forward with the project. The company would hire about 400 new workers. Officials with V&M’s parent company in France plan to meet Thursday to discuss the project.
Youngstown and Girard officials said V&M wanted the land transfer to be done in late August.
“I’m embarrassed it took as long as it did,” Shelby said.
The councilman said he was “very disappointed” with Melfi’s comments to The Vindicator that were critical of the negotiations.
“It could have been very damaging,” Shelby said of Melfi’s statements. “It still could be damaging.”
Melfi had previously criticized Youngstown city officials, V&M Star, the Youngstown/Warren Regional Chamber and U.S. Rep. Tim Ryan for their involvement in the negotiations.
On Thursday, Melfi added members of Girard City Council, particularly Shelby, to his list.
Having council involved “was damaging to the process,” Melfi said. “It’s the job of the administration to negotiate for the city. Joe Shelby lacks the experience necessary. It was a burden to have him there. It hurt our side.”
Girard council members would have agreed to anything offered by Youngstown, Melfi said.
When asked about Melfi’s comments about him, Shelby said: “I’ll take the high road on this one. It was very complicated. From the very beginning, the majority of council approached this as if everything we were told may be true. The mayor approached this from the very beginning that everything we were told was not true.”
V&M STAR STEEL Project time line
City officials with Youngstown and Girard have agreed on sharing tax revenue from a potential V&M Star Steel expansion. The time line that led to the deal:
Nov. 26, 2008: The Vindicator learns that V&M is talking to the Ohio Environmental Protection Agency about a $970 million expansion on a site that straddles Youngstown and Girard.
Dec. 8, 2008: The Ohio Tax Credit Authority approves tax incentives of $2.6 million for V&M’s proposed expansion.
Dec. 18, 2008: Youngstown signs purchase option deals with three companies to provide V&M with the land it needs.
Feb. 9, 2009: Youngstown City Council agrees to spend up to $5 million to buy the property, nearly all of it in Girard, with V&M agreeing to pay the money back to Youngstown even if the expansion plan falls through.
March 4, 2009: The Public Utilities Commission of Ohio approves a request from V&M to receive discounted electricity at its proposed expansion.
April 9, 2009: The Vindicator reports that V&M has laid off about 50 workers, reduced the hours for other 400 employees and postponed its decision on expanding because of a financial downturn. A decision by V&M is delayed until December or January.
Aug. 14, 2009: A dispute arises over changing boundaries at V&M’s insistence to have all of the property for an expansion located in Youngstown. Girard Mayor James Melfi objects to the loss of land.
Aug. 19, 2009: Youngstown and Girard officials meet with Roger Lindgren, V&M’s president, to discuss the deal. Lindgren tells the officials to settle the dispute by Aug. 28 or the company would look elsewhere.
Aug. 24, 2009: The two cities reach a tentative agreement.
Sept. 21, 2009: Youngstown Finance Director David Bozanich says there are “some minor issues” with Girard that need to be worked out.
Sept. 28, 2009: Girard City Council is to finalize the deal, but concerns on the part of city officials leave council to pass only a resolution in support of the agreement.
Monday: Girard Mayor James Melfi said “there’s no progress” in negotiations and no deal is in sight.
Tuesday: Both cities acknowledge how to fairly share the 2.75 percent corporate-profit tax from a V&M expansion project is holding up the deal.
Wednesday: Officials with the two cities meet for about 51‚Ñ2 hours and resolve the corporate-profit tax dispute.
Next Monday: Girard council is to vote on the deal.
Tuesday: Youngstown Board of Control is to vote on the deal.
Wednesday: Officials with the two cities are to officially sign the agreement.
Source: Vindicator files