Economic Development

Chamber Reverses Course, Backs Cleveland’s Amazon Bid

YOUNGSTOWN, Ohio — The Youngstown Warren Regional Chamber says it now supports Cleveland’s bid for Amazon’s second headquarters — a determination apparently made two weeks ago and a departure from its stance when it submitted a bid that included the Cafaro Co.’s offer of its Enterprise Park site and $20 million for site development.

In a news release distributed Wednesday, the chamber said it and “local leaders are standing behind the decision of its economic development partners TeamNEO and JobsOhio to submit a Cleveland site that did meet all criteria for consideration for the $5 billion project.”

Sarah Boyarko, the chamber’s senior vice president for economic development, said the chamber has been in discussions with Team NEO since the Amazon opportunity became known in early September.

TeamNEO, which is affiliated with JobsOhio, the state’s economic development agency, reviewed proposals submitted from throughout its northeastern Ohio footprint, as the state’s other JobsOhio affiliates did. “This is what the process was throughout the state,” Boyarko said.

Rendering of Cafaro Co.’s Enterprise Park project.

On Oct. 10, chamber officials met with TeamNEO representatives to review the particulars of the chamber’s submission compared to Amazon’s requirements. “It was decided that we do not meet the criteria,” so the application was not advanced beyond the regional agency’s review, Boyarko said.

In fact, the only site in northeastern Ohio that met all of Amazon’s requirements is in Cleveland, she continued. She did not know how many other applications TeamNEO received from through the region, and a representative of the agency Wednesday declined to say. If there were other applications, they have not been made public by the applicants.

In explaining the more than two-week delay in announcing to the public that it was no longer pushing the Cafaro’s Enterprise Park site, the chamber said it was working internally to identify next steps, which resulted in updating its leadership on the proposal’s status, including notifying the Cafaro Co. and bringing together local, state and federal officials for a conversation about the results of the chamber’s efforts.

According to the news release, Boyarko, the chamber’s president and CEO, Tom Humphries, and James Dignan, chief operating officer, met Monday with Trumbull County Board of Commissioners Chairman Frank Fuda, Mahoning County Commissioner Anthony Traficanti, Warren Mayor Doug Franklin, Youngstown Mayor John McNally, Rick Leonard on behalf of U.S. Rep. Tim Ryan and state Rep. Mike O’Brien to update them on the Cleveland submission.

“During this meeting, it was decided that we’d collectively support the Cleveland proposal and release a joint statement presenting our position,” Boyarko said.

Additionally, the chamber followed up with other Valley elected officials, including U.S. Rep. Bill Johnson, state Sens. Sean O’Brien and Joe Schiavoni and state Reps. John Boccieri, Glenn Holmes and Michelle Lepore-Hagan, all of whom agreed to support the Cleveland location.

Though she has not seen Cleveland’s proposal, she is confident that it is “extremely competitive.”

The announcement followed questions raised Tuesday by The Business Journal in an interview with McNally about the advisability of submitting a proposal that did not meet Amazon’s requirements instead of supporting Cleveland’s bid, which would have spill-over economic value for the Mahoning Valley.

The $5 billon project is expected to bring 50,000 jobs over 10 to 15 years. “Should Cleveland be selected for HQ2, the Youngstown-Warren area would inevitably grow as well, with new investment from likely spinoff opportunities and the potential for local expansion – especially among our service providers – to support the company,” Boyarko said in the release.

Oct. 19 was the deadline for proposals for the Amazon HQ2 competition. The company will announce its choice in 2018.

Earlier this week the chamber declined the newspaper’s request to provide a copy of its proposal for Amazon. Cleveland has not disclosed specifications of its bid, although other communities among the 238 vying for the project have.

Youngstown Mayor John McNally said he began receiving phone calls and emails shortly after Amazon made its announcement saying that the community needed “to get on board with this” and put a proposal together. He reached out to Tom Humphries, president and CEO of the regional chamber, who subsequently convened a meeting with the Youngstown and Warren mayors and representatives of the Mahoning and Trumbull county boards of commissioners.

Due to the compressed time frame, McNally said he and other local leaders agreed to let the chamber take the lead on determining a site for the local bid.

The choice of Enterprise Park comes as the chamber is actively seeking a potential new location for its headquarters, and amid suggestions that it plans to move there when its lease expires on First National Bank Tower downtown. Dignan said last month that the Cafaro Co. has offered the chamber space at its Eastwood Mall Complex in Niles. Sources indicate that office may include as much as 10 years free rent. Earlier this month the chamber issued a request for proposal for office space to landlords and developers across the Mahoning Valley.

Going through the Amazon HQ2 process was important, even though the Valley fell short of meeting its requirements, McNally and Boyarko agreed.

“If nothing else, it puts you on the radar screen for people to start paying attention to the area,” the mayor remarked.

Though certainly not a determining factor, support from the Valley can only help Cleveland’s chances, Boyarko said.

“Any support certainly is a plus,” she remarked. She also said backing the Cleveland bid could provide the Valley exposure to other Amazon portfolio companies in addition to spinoff activity if Cleveland is selected.

The Pittsburgh region is also vying for the Amazon project. Moody’s ranked that proposal fifth in its assessment of where the $5 billion project is likely to be built. Should that happen, the economic spinoff would also benefit the Mahoning Valley.

Published by The Business Journal, Youngstown, Ohio.