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A Vallourec Star subsidiary is considering an $81.5 million investment in Youngstown



Published: Tue, January 14, 2014 @ 12:00 a.m.

Project would add 84 jobs, up to $3.7 million in payroll

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VAM USA LLC is considering building an $81.5 million finishing mill in Youngstown’s Ohio Works Business Park at the former Genmak facility and an additional 67,500 square feet nearby.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

A Vallourec Star subsidiary is in the final stages of deciding if it will invest $81.5 million for the construction of a steel-pipe threading facility at the former Genmak Steel building and an additional 67,500 square feet nearby in the city’s Ohio Works Business Park.

Vallourec’s answer on using the Youngstown property for its VAM USA LLC subsidiary is expected in less than 90 days, said city Finance Director David Bozanich.

The facility would employ 84 full-time workers by early next year, according to VAM’s 10-year, 75-percent real- property tax abatement application. It listed an estimated annual payroll of $2.9 million on one part of the application and $3.7 million on another.

“We’ve been working with the company for an extended period of time,” Bozanich said. “We committed to a tax abatement as part of the deal in advance of their decision. We’re extremely pleased to be in the running for this project.”

Mayor John A. McNally said, “It would be fantastic news if this happens. We want to let them know we want them to make a decision to come here. It’s a substantial investment and substantial job creation. The folks at Vallourec and VAM have been great to work with.”

The proposed facility likely would have two threading lines, and would take about 16 months to complete from the start of construction, according to VAM’s tax-abatement application.

VAM estimates the cost of the potential Youngstown facility at $81.5 million, but gave a project investment range of $73.9 million to $95 million on the abatement documentation.

City council will consider legislation Wednesday authorizing the board of control to offer the tax abatement to VAM.

The abatement would save $6 million over 10 years for VAM with the company paying $2 million in property taxes during that time frame. Also, VAM anticipates its employees will pay $79,750 annually in city income tax.

A local company spokesman said late Monday that he asked Vallourec officials for a comment but had not heard back from them.

VAM’s website said the company “is a leader for ‘super premium’ connections for difficult applications such as very deep wells, including threaded and coupled tubing and carbon or stainless steal casing.”

Vallourec manufactures steel tubes for the oil and gas industry.

Vallourec bought the 70,000-square-foot former Genmak Steel facility at 1053 Ohio Works Drive and two vacant adjacent parcels, which are about 67,500 square feet, in September for $2.5 million. Work is being done at the vacant land to clear it.

The Genmak structure was built in 2003 for the leveling and cutting of steel coil and storage, and has been empty for a few years.

The Ohio Works location is about a mile away from Vallourec Star’s facilities in the Brier Hill Business Park, which includes the company’s $1.1 billion expansion plant that opened in October 2012 through a cooperative revenue-sharing deal between Youngstown and Girard.

Vallourec announced in November 2011 that it would invest $57 million in a VAM USA LLC pipe-thread facility at the former Indalex plant site in Girard. That facility was never built, and it appears Vallourec has decided to consider the Youngstown site instead.

Girard Mayor James Melfi said he was surprised to learn from a reporter that VAM is looking at Youngstown.


Comments

1Askmeificare(700 comments)posted 6 months, 2 weeks ago

"Girard Mayor James Melfi said he was surprised to learn from a reporter that VAM is looking at Youngstown."

Why... How... I don't get it?!

Melfi is Mayor and shouldn't he be on top of industry and news and information and rumor and gossip and inuendo and on and on in his town?

Shouldn't he expect the expected and unexpected? -In this case competition from The City of Youngstown?

Any businessman knows you HAVE TO BE ON 'IT' or you lose the 'game'. Why should politics be any different?

What does it matter anyway Mayor Melfi? Girard can't even come close to offering what The City of Youngstown can offer in anything and everything.

Great article and I thank and congratulate everyone in their progress on this beautiful development.

Anyone in manufacturing absolutely must consider The City of Youngstown as we have amazing resources that cannot be found elsewhere. Our labor force is ready and skilled and anxious to work.

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2BigJim2234(57 comments)posted 6 months, 2 weeks ago

Sure glad the City had the vision to bring North Star here 30 years ago!! while using free land and taxes. Most naysayers and politicians thought they would be gone in 9 years 11 months before their 10 year tax break...The people of Mahoning County should be glad they were wrong!

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3papa1(641 comments)posted 6 months, 2 weeks ago

askmelficare, most of your job applicants can't pass a drug test.

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4glbtactivist(245 comments)posted 6 months, 2 weeks ago

Here go those cheap creeps again. Foreigners moving into the area to take all the profits from making pipes for the fracking industry. That industry will only last about 15 years. Then the company will leave without ever paying their fair share of taxes to pay for police, fire, roads, etc. Screwing the local citizens again. Leave a contaminated mess.

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5123goz(513 comments)posted 6 months, 2 weeks ago

papa1, there are people that can pass a drug test. There are companies that would like you to believe that is the excuse they don't expand or hire more workers. Why should they if they can get it out of what they have, at lower costs. Did you read the story the other day about the Dayton contractor and his ALL illegal work force? Roofers, drywall etc. I suppose he couldn't find any body else either.
It's odd that when we look for people, they pass the test. Lucky maybe. Don't get me wrong, I know some people are their own worst enemy and are users.

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6dd933(223 comments)posted 6 months, 2 weeks ago

The "pipe-thread" plant was also proposed for a site next to the former Dempsey Steel building nearer to the new main plant - on Youngstown property. VAM found a site it liked. It's a pity that when something good finally happens to our valley's economic development our valley's daily newspaper reacts only with scorn and bias. Why does the Vindicator always frame things against the city? Why does the Vindicator always try to promote animosity between local governments?
Remember, Mayor Williams went to Paris - not Mayor Melfi

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7FalconFighter(37 comments)posted 6 months, 2 weeks ago

C'mon Susie Biersdorfer and you anti-fracking nuts out there..when will the protests start on this? Before or after the next election when your anti-fracking bill goes down in flames again? Hmmm let's see, lets ban fracking and any business that participates in fracking because we are tree huggers -OR- Invest another $100 million in Youngstown, giving the city another $100,000 anually in taxes from new workers, on top of the hundreds of thousands it already gets from current workers, on top of the millions it has received in the past few years from the expansion in 2011. I'm no mathematician, but the writing is on the wall on how to turn the economy around. Afterall, we live in homes and drink water out of faucets and drive cars that require gasoline. We dont live in trees, drink out of creeks, and walk to work. These bills need paid. Keep it up Vallourec and thank you for what you've done to this economy!

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8dontbeafool(836 comments)posted 6 months, 2 weeks ago

@papa, are you talking about people from Girard not being able to pass a drug test, or people in this area in general?

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9Ianacek(891 comments)posted 6 months, 2 weeks ago

The City should welcome new business & ensure that it finds the Council easy to deal with .

However , the City has moved on a lot since the initial V & M investment . It's a less risky place to invest . It doesn't need to be quite so generous with tax abatements any more .

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10IslandMike(751 comments)posted 6 months, 2 weeks ago

The improved economy and rising stock market is all Obama's fault. Could you imagine how the Neo-Cons and their buddies at the Fixed Noise Channel would be taking credit for the successes of Wall Street this past year? That is all we would ever hear about!

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11biggee(43 comments)posted 6 months, 2 weeks ago

So if Bob "I'm fighting for you" Hagan had his way there would be no V&M cause there would be no fracking. And as far as them only staying 15 years and leaving really? They have already spent a billion dollars on the north side of Youngstown, they are paying comparable wages to the General Motors plant . Ask any skilled tradesman or laborer if they should expand. Better yet wait for Tim Ryan and Bob hagan bring home some jobs...some crack me up!

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12southsidedave(4777 comments)posted 6 months, 2 weeks ago

I do not understand how so many people can go through life having a negative attitude about everything....be happy the company wants to invest in the area, and create jobs. Peace.

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13JoeFromHubbard(985 comments)posted 6 months, 2 weeks ago

@ southsidedave:

You're right on the spot on these posts.

It didn't take long for them to blow up
and go far off track.

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14UticaShale(850 comments)posted 6 months, 2 weeks ago

If you add all the Mega Global Companies in our midst; Shell, Chevron, BP, Total, Statoil, CNOOC, CHK, Hilcorp,GulfPort, Halcon,etc. they are financially larger than our government, definitely richer!

When the economic collapse comes, the energy companies will protect their investments, the socialist FrackPots will be banished to Detroit.

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