Challenges abound in 2014, but optimism should prevail

Challenges abound in 2014, but optimism should prevail

New Year’s Day editorials are supposed to be positive, uplifting and forward-thinking, and as we study our crystal ball for 2014, we find ample reason for optimism.

That said, residents of the Mahoning Valley should also be realistic as they venture into the new year. There’s unfinished business and some challenges that will reflect on the region’s economic well-being.

First, the points of light.

The Utica Shale play continues to dominate the Valley’s business news simply because of the initial promise of a modern-day gold rush across eastern Ohio. While the intense activity of four years ago — with the invasion of land brokers, oil men and equipment from the south — has slowed to a crawl, the exploration for oil and gas continues.

More than 1 million acres of land have been leased in this part of the state, and big names in the industry, including Chesapeake Energy, Gulfport Energy, Consol Energy, Hess Corp., Devon, Noble Energy and Andarko E&P have established a presence.

Experts say that what seems to be a lull in activity is actually the normal course of events.

As Don Fischbach, chairman of the energy group at Calfee, Halter & Griswold law firm in Cleveland, said in October, “The project evolution is taking an ordinary course from the standpoint of you lease it, define it and harvest it. We’re just about to give birth to the extent of the project area. The parameters of this play are dependent on a lot of unknown factors like commodity prices, infrastructure build-out, and it’s not fair to compare the Utica’s time line to other plays that are predominantly producing crude oil.”

Thus, the Shale play will remain a key factor for the region’s economy in 2014.

GM Lordstown

Likewise, our optimism for the new year is fueled by the outstanding performance of General Motors Co.’s Lordstown assembly complex that has made the Chevrolet Cruze the consistently top-selling compact car in the country.

The plant has begun producing a diesel version of the Cruze, and GM executives in Detroit have said the next generation of the compact car will be built at Lordstown.

As we noted recently, with the federal government selling its share in GM and with the appointment of Mary Barra, a company insider, as the first female CEO, things are looking up for the leading auto manufacturer. Even so, the Valley can’t let its guard down. Business, political and community leaders should make sure the story of Lordstown is told far and wide.

Finally, the opening of the $125 million Hollywood Gaming at Mahoning Valley Race Course in Austintown will mean at least 1,000 jobs and money flowing into local government coffers.

While we have long argued that gambling isn’t a net contributor to the economy because of the losses suffered by people who can least afford to put their money at risk, we recognize the reality that casino-style gaming is now a fact of life in Ohio.

In November, Austintown received $1 million from Penn National Gaming, owner and operator of the racino, and will receive $1 million this year. After that, the township will get $500,000 a year for as long as the horse-racing track/slots casino remains open.

There were other positive developments in 2013 that will continue to have an impact on the local economy this year. Foremost is the nearly $2 billion investment by French transnational corporation, Vallourec, in a state-of-the-art steel pipe-making facility on a site between Youngstown and Girard.

Then there’s the new president of Youngstown State University, Dr. Randy Dunn, whose job it is to re-engineer the urban institution to meet the demands of the state. With funding from Columbus at an all-time low, Dunn must find a way of providing top-quality education at the lowest cost possible to students.

Finally, the health-care industry continues to leave its mark on the region’s economy — lately with the expansion of St. Elizabeth Health Center’s Boardman campus and the construction of new space and expansion of existing facilities at ValleyCare Northside Medical Center.

Air RESERVE base

As for the land mines the area will have to avoid in 2014, the most dangerous one relates to the future of the Youngstown Air Reserve Station in Vienna Township. The facility, with its 1,500 or so full-time and part-time employees, contributes more than $100 million to the Valley’s economy. The decision by the Defense Department to reduce the number of C-130 transport aircraft is cause for concern.

The deficit-reduction push in Congress has focused attention on the Pentagon, which has made the closing of military installations a top priority.

The Youngstown/Warren Regional Chamber, in conjuction with political and community leaders, must make the preservation — and even the expansion — of the base a major endeavor.

Given the congressional and statewide elections that are on tap this year, candidates must understand they will be judged on their commitment to the base.

The other land mine has to do with the academically troubled Youngstown City School District, which must improve this year or else face restructuring by the Ohio Department of Education.

2014 should be an interesting year.

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