Youngstown waiting for Vallourec to decide on expansion

Published: Thu, January 16, 2014 @ 12:10 a.m.


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By David Skolnick


City council approved legislation that Youngstown officials hope will persuade a Vallourec Star subsidiary to invest $81.5 million to build a steel-pipe threading facility about a mile from the company’s $1.1 billion expansion mill.

“We’re waiting any day for the company to make a final decision,” said city Finance Director David Bozanich. “We hope it’s sooner rather than later.”

The company, which negotiated with the city on this project for several months, is expected to make a final decision in the next 90 days, Bozanich said.

Vallourec officials have not commented on the project.

The company wants to use the former Genmak Steel building and an additional 67,500 square feet nearby in the city’s Ohio Works Business Park for the VAM USA LLC threading plant.

The facility would employ 84 full-time workers by early next year, according to VAM’s 10-year, 75-percent property-tax abatement application.

The company wanted the city to approve the abatement before making a commitment on the expansion, Bozanich said.

Council approved the abatement Wednesday that would save VAM $6 million in taxes and have it pay $2 million in taxes over a 10-year period.

The city’s board of control must also vote in favor of the abatement, and that will be done, said Bozanich, who sits on the board with Mayor John A. McNally and Law Director Martin Hume.

“It’s an exciting project,” McNally said. “Hopefully, we can sit back and get additional good news from Vallourec and VAM.”

In a related matter, council approved legislation to spend about $60,000 to relocate 11,000 cubic yards of dirt located at the proposed VAM site.

The money is coming from $300,000 the city will receive from JobsOhio for work needed at that location should VAM commit to building there, Bozanich said.

JobsOhio is a private organization created by the state to act as its economic development agency.

The city won’t use any of the money if VAM doesn’t relocate here, Bozanich said.

If VAM moves ahead with the project, the rest of the state money would go toward other site work, utility extensions, landscaping and general construction, Bozanich said.

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.

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.

Vallourec Star built a $1.1 billion expansion mill, that opened in October 2012, through a cooperative revenue-sharing deal with Youngstown and Girard.

Vallourec had announced in November 2011 that it would invest $57 million in a VAM pipe-thread facility at the former Indalex plant location in Girard.

Instead, it is building that in Youngstown, and will use the Girard location for warehouse space.

Also, council approved legislation to replace the air-conditioning system at 20 Federal Place.

The system stopped working last August or September, and will cost the city about $1.3 million to $1.6 million to replace.

The board of control also needs to vote in favor of the proposal for the downtown office building at 20 W. Federal St.

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