The proposed $25.5 million project to convert the downtown Stambaugh Building into a 120-room hotel not only has a $5 million state tax credit, but also a $4 million federal tax credit.
Because the 12-story, 107-year-old structure at 44 E. Federal St. is on the National Park Service’s Register of Historic Places, the building automatically is eligible for that $4 million tax credit, said Dominic C. Marchionda, director of operations and strategic planning for the NYO Property Group, which owns Stambaugh and numerous other downtown buildings.
It’s been on the register since 1980.
“Without these credits, these [historic] buildings that allow us to pay homage to our industrial past don’t stand a chance of being an integral part of our favorable future,” he said.
The $9 million state and federal tax credits are the most given to any structure in the Mahoning Valley.
The Ohio Historic Preservation Tax Credit Program provides a 25-percent tax credit to qualified buildings, and the federal tax credit is up to 20 percent, Marchionda said. However, both provide those amounts for up to $20 million investments, he said. Anything above that amount isn’t eligible for tax credits.
A tax credit is a reduction in the amount of taxes owed and is given after a project is completed. The two tax credits will provide about 35 percent of the expense of transforming the building into a hotel.
“While all of us from the Valley know what an amazing place Youngstown is, and see all the positive change taking place each day, Youngstown unfortunately is still considered as a tertiary market to traditional lenders,” Marchionda said. “Therefore, you’ll often find a dynamic and layered financing stack behind historic preservation and adaptive reuse projects. We don’t anticipate this to be any different, but luckily, it’s not our first rodeo, and we are prepared to partner with local and regional lenders to reintroduce this building to the community.”
NYO has used state and federal tax credits to rehabilitate the vacant Erie Terminal Place at 112 W. Commerce St. into an apartment complex with businesses, and will receive them for its work to turn the empty Wick Tower at 34 W. Federal St. into an apartment and extended-stay living facility to open in January 2015.
Except for Warehouse 50, a ground-floor restaurant and bar, Stambaugh is vacant. NYO will honor the existing lease with that business.
The rehabilitation is expected to begin in the first half of 2015 and be completed in the summer or fall of 2016, said Dominic J. Marchionda, NYO chief executive officer.
The Vindicator first reported in July 2012 that NYO and its partner, Wick Ohio One, owned by Pan Brothers Associates of New York City, were seeking financial assistance to turn the Stambaugh Building into a hotel.