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Youngstown council approves $3.29 million in loans to two downtown projects


Published: Thu, February 20, 2014 @ 12:05 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

City council approved legislation to lend $3.29 million to two companies rehabilitating vacant downtown properties.

Without the money, the projects wouldn’t happen or would have been delayed, officials with the two companies say.

Based on a recommendation from the administration, council voted Wednesday to approve loans equalling 70 percent of state tax credits, at 3 percent interest, to the projects, both on West Federal Street.

The projects will “be a benefit to downtown and its continued growth,” said Mayor John A. McNally.

The projects are:

The $15.3 million conversion of the Wick Building into a 52-unit rental and extended-stay facility being done by the NYO Property Group, a major downtown property owner. The city will loan $2.59 million to NYO.

The $4.4 million conversion of the Wells Building into the new headquarters of Strollo Architects with 12 apartments. The city will loan $700,000 to that project.

The money will be repaid in about 18 months.

Financial problems and national lawsuits related to an Atlantic City boardwalk redevelopment make it difficult for companies with government tax credits to receive loans from lending institutions, said city Finance Director David Bozanich.

State tax credits are given at the conclusion of projects.

The city loan would be secured by a first-lien position on the state tax credits, Bozanich said.

In other matters, council voted 4-3 to have Councilwoman Janet Tarpley, D-6th, replace Councilman Mike Ray, D-4th, as president pro tem. Ray along with Councilmen Paul Drennen, D-5th, and John R. Swierz, D-7th, voted against appointing Tarpley.

Also, council voted 5-2 [Ray and Drennen were the no votes] to remove Ray as chairman of the housing community and economic-development committee, and oust Drennen as chairman of the park and playground committee and take him off the community-development committee. Drennen now serves on only two of council’s 12 committees.

Tarpley and Councilwoman Annie Gillam, D-1st, said they were bothered by comments Drennen and Ray have made about ward redistricting and wanting more money for street repaving and sidewalks in their wards.

Drennen and Ray said they have more-populous wards, and giving an equal amount of money to each ward is unfair.


Comments

1John44(14 comments)posted 6 months ago

Mayor McNally your city council people are acting like small children on the play ground. Not one looking out for the city's best interest, just what they think will make them look good.
Good luck with running the city now.

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2glbtactivist(245 comments)posted 6 months ago

I wonder why the prosperous communities around Youngstown never have to pay companies to move into them? Boardman, Austintown, and Poland are constantly getting new businesses without getting taxpayer welfare. How many never pay back the loans? And all we need is another apartment complex for those on welfare to assure that downtown remains a terrible place to visit.

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3city_resident(509 comments)posted 6 months ago

The city has to act as a lender because it has been "redlined" by the banks. Sort of like how I had to buy my house via land contract, despite having excellent credit.

How many apartment complexes for welfare recipients have been built downtown in the last 10 years? I'm not aware of any.

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4JoeFromHubbard(1017 comments)posted 6 months ago

@ glbtactivist:

I am convinced that one of the main reasons businesses go to the suburbs of Youngstown is because of the city's excessive income tax rate.

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5NBees(43 comments)posted 6 months ago

Okay, maybe I am a little stupid about some things, but 3% interest on $3.29 million in short term loans (repaid in 18 months) should net the city a nice little chunk of change. What's the choice? Urban renewal or urban decline. We should thank NYO for renovating old buildings that would otherwise continue to deteriorate. And btw, the only subsidized housing located downtown is designated for elderly and disabled persons. NYO typically creates high end units for young professionals. I feel safer downtown here than I do out in the burbs.

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