The city’s board of control amended its 2010 license agreement with V&M Star until the city’s recently signed lease with the company takes effect.
Mayor Charles Sammarone, head of the board of control, said Thursday that V&M requested the city take action before the end of the year so production continues uninterrupted and the company can begin making payments to the city.
The 99-year lease agreement finalized last week doesn’t become effective until V&M has the land for its $1.1 billion expansion project replatted through Mahoning County, said Law Director Anthony Farris, a board of control member.
“The replatting is not a big deal, but it takes time,” Farris said.
A replat is required when property is being partitioned.
The amendment under the license agreement will allow V&M to begin paying the city under the terms of the lease, which calls for city to receive more than $2.8 million annually for the first three years.
V&M will pay $100,000 annually to the city for the remaining 96 years and has the option to extend the contract 10 times, each for five additional years, for $100,000 annually.
The city is counting on the payments, which Sammarone has said will be used to help offset shortfalls in the city’s budget.
The deal, nearly two years in the making, repays most of the roughly $12 million spent by the city on utility services and road improvements near the company’s new site off Martin Luther King Jr. Boulevard.
V&M’s new plant began continuous production of pipes Oct. 26 and will be capable of producing up to 500,000 metric tons of seamless pipe used by the oil and gas industry. The mill will employ 350 people.