Port Authority Anticipates Financial Hit from COVID-19
YOUNGSTOWN, Ohio – During the COVID-19 outbreak, bed tax revenues from local hotels will probably be about a tenth of what they might have been otherwise, projected Kevin Kern, the Western Reserve Port Authority’s chief financial officer.
The port authority’s board of directors met Wednesday morning via videoconference, in keeping with public meeting guidelines during the coronavirus outbreak. During the meeting, the port authority authorized entering into a term sheet and issuing a sales tax exemption certificate for the General Motors/LG Chem battery plant project in Lordstown.
The port authority staff is working on assessing the level of financial impact from the coronavirus, especially at the Youngstown-Warren Regional Airport, Kern said.
Closings of nonessential businesses and stay-at-home orders in Ohio and across the nation have crippled the hospitality industry, including hotels. Both Mahoning and Trumbull counties collect lodging or bed taxes, which go to support convention and visitor bureaus in both counties and to the port authority to subsidize operations at the airport.
On average, the port authority receives $1.5 million annually from lodging taxes collected in Mahoning and Trumbull counties, said Anthony Trevena, the port authority’s economic development director.
“We’re looking at 10% and crossing our fingers,” Kern said. “If this goes into summer time we’re going to be hurting a little bit financially.”
The port authority receives lodging taxes from the counties two months after the date of the activity, so officials won’t know until next month how much of a hit collections are going to take, he said.
Port authority board member Ron Klingle affirmed that expectation. Klingle is CEO and chairman of Avalon Holdings Corp., which owns the Grand Resort in Howland.
Business is down 90%, he reported. He also said all of the upcoming wedding receptions that canceled there have rebooked for fall.
“We just don’t know how long this is going to last,” Kern said. “Luckily when we put our budget together we weren’t expending every dollar that we expected to receive this year. We were being kind of tight to begin with.”
Port authority staff already has taken steps to reduce costs at the airport, including laying off a maintenance worker, said John Moliterno, the port authority’s executive director. “We realize that’s where the hit’s going to be. We’re already taking a good look at everything we’re doing,” he said.
In addition to the GM/LG Chem item, the WRPA board also authorized issuing and selling a port authority revenue bond of up to $425,000 to cover construction costs for the renovation of the second floor of Eastern Gateway Community College’s health and workforce education center.
The port authority will renovate the floor for classroom and office space, Moliterno said. The port authority, which owns the building, already has renovated the building’s first floor and basement for Eastern Gateway, who is “very pleased” with the building, Moliterno said.
The port authority board also authorized Moliterno to submit an application to the U.S. Department of Transportation’s Better Utilizing Investments to Leverage Development program.
The port authority is working with Eastgate Regional Council of Governments, Youngstown State University and Youngstown Regional Chamber to apply to the program to fund infrastructure improvements in Lordstown. It is serving as the lead agency in the application for the grant, which will be utilized in conjunction with the GM/LG Chem project, Lordstown Motors Corp. and the Ohio Turnpike.
The deadline to apply for the grant is May 18, Moliterno said.
In his remarks opening the meeting, Marty Loney, the port authority board’s chairman, acknowledged the efforts of first responders and health-care professionals in this “unprecedented” time.
“Everybody is doing their best to keep business going and keep people working as best s they can,” he said. “If everybody stays together we’ll get through this together.”
Copyright 2023 The Business Journal, Youngstown, Ohio.