The Youngstown World Trade Center would convert the former Wells Building in downtown Youngstown into modern office space.
Eric Planey, vice president of international business attraction for the Youngstown Warren Regional Chamber
By Grace Wyler
Eric Planey is on a global crusade to sell the Mahoning Valley as an emerging hub of international commerce.
As vice president of international business attraction for the Youngstown/Warren Regional Chamber, Planey has spent the past several months crisscrossing Europe and Asia to find investors for a $9 million global trade center in downtown Youngstown.
The project, dubbed the Youngstown World Trade Center, would convert the former Wells Building into modern office space with an adjacent six-story glass office tower to house small-and medium-sized foreign companies interested in establishing a presence in the North American market, Planey said.
Though raising funds for the trade center is still in the early stages, the project could be under way as early as the end of the first quarter of 2011, Planey said.
“I want to be conservative before saying that this is a done deal,” Planey said. “But we have a benefit in being able to execute the project quickly — we can finish the building in a year.”
To finance the project, the Chamber is hoping to take advantage of a visa program that allows foreigners to invest $500,000 in a U.S. business project in exchange for residency.
Under the EB-5 visa program, high net-worth foreigners can obtain permanent residency if they can prove their investment created at least 10 jobs in the census tract where the project is located. Investors do not have to live where the investment is made. Investments must be approved by an EB-5 Regional Center that has been designated by U.S. Citizenship and Immigration Services as eligible to receive immigrant investor capital.
Investments in the Youngstown World Trade Center will go through the Northeast Ohio Regional Center in Wooster, Planey said.
The EB-5 visa program, established in 1990, has increased in popularity as businesses look for alternatives to bank financing in an unstable credit market and student visas and green cards become more difficult to obtain.
Chamber officials hope to line up 18 EB-5 investors for the trade center, and have been working with an asset management company in Asia to pitch the project to potential investors, Planey said.
He declined to identify any potential investors, but said there has been “substantial interest from qualified investors.”
The “No. 1 issue with EB-5 projects” is the job creation requirement, Planey said. He added that the Chamber is confident the trade center will create 180 jobs to satisfy job quotas.
The Chamber has had discussions with several companies interested in moving in to the trade center, Planey said. The Chamber is targeting companies in China, Korea, Japan, Netherlands, France, Germany and, to a lessor extent, Brazil, he said.
Planey estimated that 30 to 35 percent of the office space in the trade center will be committed before construction begins, a number he said is “normal for any commercial office property.”
Because investments must be for-profit to qualify for the EB-5 visa program, the Chamber will create a company that will own the trade center, Planey said. The subsidiary will be controlled by the project’s investors. The Chamber will likely form a management agreement with the new company to staff the trade center, Planey said.
The World Trade Center project is part of the Chamber’s broader international business-attraction strategy, which aims to increase the Valley’s global competitiveness and presence in international commerce, said Tom Humphries, chief executive of the Chamber.
The small and medium enterprises being targeted for the World Trade Center are companies that are just entering the U.S. market, Humphries said. The hope is that these companies will see sales growth from their Youngstown office and eventually look to set up larger operations in the area.
The trade center would give these companies access to services such as logistics, accounting and strategic- growth planning designed to precipitate their expansion into North American markets, he said.
“Our strategy for international attraction is three-fold,” Humphries said. “We want to see sales first, second is distribution and hopefully third would be manufacturing.”
Humphries projected that the WTC project will create up to 200 jobs initially. While the senior leadership of the WTC companies will likely be from their countries of origin, other positions will likely be filled with local hires, Humphries said.
The Chamber began developing its international business strategy in 2006 by seeking out local business leaders with international expertise for the organization’s Board of Directors, Humphries said. Planey, a former vice president of Bank of Tokyo-Mitsubishi, in 2009 to oversee implementation of the international program.
Planey’s position is funded by a $285,000 congressional earmark, secured by U.S. Rep. Tim Ryan of Niles, D-17th in 2009. The Chamber has submitted a second request for funds, Humphries said, but increased debate over congressional earmarks “puts the program at risk.”
Humphries is now working to secure long-term financing for the international business attraction program. He declined to give details about his strategy, but said he hopes to have a funding plan in place by spring 2011
“I expect the program to pay for itself going forward,” Humphries said. “There are strong indications that people are receptive to the way I am trying to fund it.”
In addition to Planey’s salary, the U.S. grant now pays for international business attraction efforts and programming, including several overseas trips designed to develop the Chamber’s international business connections.
The Youngstown World Trade Center is prominently featured in the Chamber’s new international marketing book, which touts the Valley’s economic attributes, including its low real estate and labor costs. Planey distributed copies of the books to companies and potential investors on his trips abroad this fall.
The 74-page publication, “Youngstown & Warren Ohio: An Exploration of the Dynamic Business & Lifestyle Climate,” cost just under $60,000 to produce.
The bulk of those funds will come from the Chamber’s marketing budget and the international business grant, said Tony Paglia, the Chamber’s vice president for government affairs.
Mahoning County, Trumbull County and the cities of Warren and Youngstown each contributed $9,500 toward the marketing project, Paglia said. The counties’ contributions are separate from the Chamber’s economic-development contracts with the county commissioners of Mahoning and Trumbull counties, Paglia said.
The city of Niles, the Niles Area Council of the Chamber and the Mahoning Valley Sanitary District each contributed $2,500 to develop the marketing book.