City to Consider Abatement for Youngstown Tool & Die, $5M Loan

YOUNGSTOWN, Ohio – Youngstown City Council this week will consider transferring and extending a tax abatement for the former Exterran Energy Solutions Inc. building to encourage Youngstown Tool & Die LLC to invest $10 million or more at the site. 

In addition, members will vote on whether to take a $5 million infrastructure loan to cover increased costs for a $26 million downtown infrastructure project.

Youngstown Tool & Die, which in January 2019 was awarded a 1.467%, seven-year Ohio job creation tax credit to support construction of a 60,000-square-foot manufacturing plant at the Salt Springs Road Industrial Park, could locate its project at the Exterran building. The company, owned by Italy-based Phoenix International S.P.A., manufactures extrusion dies and tooling for the aluminum extrusions industry. 

Houston-based Exterran opened the plant in April 2013 and closed it in March 2016, a victim of the downturn in the oil and gas industry at the time. The plant manufactured compressor stations and other equipment for companies exploring the Utica-Point Pleasant and Marcellus shale plays. 

The two ordinances council members will consider at their meeting Wednesday would transfer the remaining years of the 75%, 10-year abatement of real property taxes the city approved for Exterran to Youngstown Tool & Die and extend the abatement for an additional five years. 

Tool & Die had previously considered placing its expansion, announced in 2018, at an available parcel on Exal Court behind the former Exterran building, said Lauren Johnson, business development manager for the Youngstown/Warren Regional Chamber. Johnson has been working with the company on its expansion project. 

“The Exterran building’s footprint meets the project’s original site search requirements and is similar to the planned new construction,” for which City Council previously had approved an abatement, Johnson said.

Approval of the ordinances would provide a total of seven years of tax relief for the company if it moves forward with the project, said Nikki Posterli, the city’s director of community planning and economic development. The abatement transfer and extension also were approved by the Youngstown Board of Education, she said.  

According to the legislation, the company would invest a minimum of $10 million at the site, retaining 46 full-time positions and creating an additional 54 full-time positions. The company also committed to providing two apprenticeships per year for Youngstown City Schools students, Posterli said.  

Last year, the company was looking at sites in Indiana, Pennsylvania, Michigan and Illinois for the project and had yet to commit to the project moving forward at Youngstown. Dave Mrdjenovic, general manager, was unavailable to comment Monday afternoon. 

Both Johnson and Posterli were optimistic about the project. 

“The Regional Chamber is pleased that the city of Youngstown and Youngstown City School District recognize the importance of supporting this great project,” Johnson said. “Approval of the ordinances would be “another step forward to securing this investment and new jobs for the region,” she added.  

 “There is nothing that we know additionally that is going to prevent this from happening,” Posterli said. “We’re definitely looking forward to partnering with them and moving this along, and especially the opportunity to have Youngstown city school students in apprenticeships.”   

Council members also will consider authorizing the city’s Board of Control to apply and enter into an agreement for a $5 million State infrastructure Bank Loan to accommodate increased costs related to the Smart2 – or Strategic & Sustainable, Medical & Manufacturing, Academic & Arts, Residential & Recreational, Technology & Training – Network.

In December 2018, the U.S. Department of Transportation announced the award of a $10.85 million federal grant for the proposed $26 million project, which would involve major upgrades to six downtown streets including Fifth Avenue. The grant was awarded to a local partnership including Eastgate Regional Council of Governments, the city and Youngstown State University, among others.  

The engineering estimate for the project came in at $31 million for the three-phase project, up $5 million from the early estimates, said Jim Kinnick, Eastgate’s executive director. 

“The city needs to secure the funding for the entire project at the point of filing and ultimately awarding of the first phase,” Kinnick said. 

Eastgate Regional Council of Governments will be responsible for the principal on the loan, Kinnick said, while the city will pay interest, according Samantha Turner, Third Ward councilwoman.

Eastgate will pay the principal on the loan and the city will pay interest, according to Kinnick and Samantha Turner, third ward councilwoman.

The higher estimate was in part because of the addition of $2.4 million of conduit and pull boxes for high-speed internet that was not included in the project initially, Kinnick said. The partners are still in the process of securing additional funding for the conduit.

“We also feel the latest estimate is very conservative,” he said. “Recognizing the $31 million covers all three phases, we have the opportunity to continue to refine the project as we move forward over the next two years.”

Related Coverage

Jan. 29, 2019: Youngstown Tool & Die Gets Tax Credit for $12M Project

July 30, 2018: Youngstown Tool & Die Plans $13M Expansion, New Jobs

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