City Hires Law Firm to Oversee Hotel Incentives

YOUNGSTOWN, Ohio – The city hopes to conclude discussions within the next 30 days about financing for the Stambaugh Building project, Finance Director David Bozanich said Tuesday.

At a special meeting of the Board of Control, Mayor John McNally, Law Director Martin Hume and Bozanich voted to engage the law firm of Calfee, Halter & Griswold LLP, Cleveland, as associate counsel for its role in the project.

Youngstown Stambaugh Hotel LLC, a partnership of NYO Property Group, has requested grants and loan from the city for its proposed conversion of the downtown building into a DoubleTree by Hilton hotel. The project was announced about two years ago.

The agreement calls for the Cleveland law firm to be paid $400 per hour, with the agreement certifying $25,000 total for payment of services and expenses.

“It’s to ensure that the city’s position is protected to the greatest degree,” Hume said.

The documents involved are “complex,” dealing with multiple creditors and involving potentially one or more loans, grants and two separate sets of historic tax credits, Bozanich said.

“So it becomes a fairly complicated transaction to make sure everybody understands and accepts the positions that they are taking in the overall capital stack,” he said.

City financing for the project remains under discussion, a process Bozanich expects to be concluded within the next 30 days. The financing package likely will not include a float loan, he said.

“Interest rates are relatively low. Float loans make more sense [for the developer] when rates are high,” he explained. “The issue is sometimes not viable for the developer.”

In addition to potential financing, the city is looking at providing water and wastewater grants for the $25.75 million project.

The city still is in discussions with the Youngstown City Schools regarding a 15-year, 100% tax abatement for the project.

NYO is “trying to work with the board of education members to understand their concerns,” said T. Sharon Woodberry, the city’s director of community planning and economic development. NYO is attempting to address those concerns in an agreement so board members are comfortable approving the abatement, she added.

The discussions involve what NYO might be able to give the school district in return for approving the tax abatement, according to Woodberry.The abatement would save the developer an estimated $300,000 in taxes annually.

Copyright 2022 The Business Journal, Youngstown, Ohio.