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Financial problems could stop Wells Building project



Published: Sat, May 24, 2014 @ 12:08 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

Problems obtaining private funding to redevelop the long-vacant Wells Building has left the project on hold and is raising doubts whether the proposal will move forward.

“This is taking a lot of time and energy, and I’m running out of both,” said Gregg Strollo, owner of Strollo Architects, the company planning a $4.7 million project at the West Federal Street structure that is to include the firm’s offices and 12 apartments.

The project, initially proposed a year ago, ran into a financial snag because national lawsuits related to an Atlantic City boardwalk redevelopment made it difficult for companies with government tax credits to receive loans from lending institutions, city Finance Director David Bozanich said in February.

Because of that, the city approved giving $700,000 to Strollo Architects with Youngstown being in the first-lien position on the $1 million it is to receive in state tax credits, which are given upon the completion of the project.

After the city approved the funding, banks expressed interest in lending money for the project, but none has finalized a deal, Strollo said Friday.

“I wish I had a deal done,” he said. “I can’t do any work until the deal is done. We want to start construction, but we don’t own the property yet. This deal has all of the pieces and parts to it. People are enthusiastic, but aren’t ready to commit.”

The 97-year-old Wells Building is owned by the Youngstown Central Area Community Improvement Corp., a nonprofit downtown property agency run by the Youngstown/Warren Regional Chamber.

The CIC has agreed to sell the building for $1 to Strollo. The firm was going to buy the building for $85,000, but the financial issues led the CIC to reduce the sale price to $1.

If this project fails, the CIC will demolish the Wells Building, said Dave Kosec, the agency’s project manager.

The uncertainty of the Strollo project also is causing the CIC to wait on a decision to turn a fenced-in hole just east of Wells into a parking lot. The hole has been there since 2008 when the CIC demolished the Armed Forces Building and the State Theatre, keeping the latter building’s facade.

“We’d take down Wells if Strollo doesn’t work out” and turn the entire area into a parking lot, Kosec said.

The CIC is keeping busy downtown as it nears completion on the demolition of the former 94-year-old Kress Building, next to the 7th District Court of Appeals building on West Federal Street.

Demolition started in mid-April and will be done before the July deadline, Kosec said.

The CIC attempted to sell the structure without success. It was last occupied in 2000 by the Wig Warehouse, but that business had to relocate because of the building’s unsafe condition.

Demolition of Kress is costing the CIC about $400,000. It has a deal in place, finalized in December, with the city for the latter to buy the Kress land for $500,000 after the demolition is done.

The city plans to use the parcel as a parking lot for its water and wastewater customers.

The $100,000 the CIC is making from selling the Kress property will go toward the parking lot near Wells, or include Wells if the Strollo project doesn’t work, Kosec said.

But even if the Strollo project is done, it will cost the CIC more than $100,000 for the parking-lot work, said Kosec, who doesn’t have a cost estimate.

As part of that deal, the city signed a 20-year lease with a 20-year option for the CIC to lease the former Paramount Theatre property at West Federal and Hazel streets for $100 a year.

The CIC can purchase the property at a fair market price.

After numerous delays to turn the Paramount property into a parking lot, work on it just finished.

The CIC is expected to start leasing the property by the beginning of June.


Comments

1Seriouslee(125 comments)posted 7 months ago

Soon there will be more parking lots than buildings downtown. Seems as though someone ought to be looking into this CIC business.

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2HSG(139 comments)posted 7 months ago

Just what I want to see when I go downtown-all those awesome parking lots!
When it comes to tearing something down, they waste no time. Not so when someone tries to secure financing to go forward with a project that will enhance the downtown and transform a current eyesore. Who are these people?

Suggest removal:


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