Trumbull CIC to Pay $1 for RG Steel Building
WARREN, Ohio – The Board of Directors of the Community Improvement Corporation of Warren and Trumbull County voted Thursday to acquire the former RG Steel office building on Pine Avenue.
The CIC board exercised its option to buy the building for $1 from the Tech Belt Energy Innovation Center.
Board members Mayor Doug Franklin and Stan Feret abstained. Both serve on the TBEIC board.
In late 2014, BDM Steel Holdings, which acquired the assets of the former RG Steel, donated the 57,000-square-foot office building on the property to TBEIC. TBEIC in turn leased the property to the CIC, which has operated, leased and marketed the property. The CIC is leasing a portion of the building back to BDM for $25,000 annually.
Donating the building to TBEIC, which has 501(c)3 status, allowed BDM to claim a tax credit for the donation that would have been unavailable had it directly donated the building to the CIC, which is a 501(c)4 entity.
The CIC will take possession of the building Jan. 1. BDM has a three-year lease for its space that ends that date but has three one-year options to renew.
The CIC has been actively marketing the building for lease or sale, said board Chairman Paul O’Hara. Board member Chuck Joseph, broker with Routh-Hurlbert Real Estate, reported the property has not been shown in the past few months. He also said BDM is interested in remaining a tenant.
The board also approved withdrawing $43,000 from its partnership with the Mahoning Valley Economic Development Corp., about half the value of that account, to cover the annual expense of operating and maintaining the RG Steel building. The partnership developed buildings at Warren Commerce Park.
Operating the building costs $43,000 to $45,000 per year, said Tom Humphries, president and CEO of the Youngstown Warren Regional Chamber. The chamber has a contract to manage the CIC.
The funds from the MVEDC partnership combined with the $25,000 from BDM, which is paid in January, will give the CIC money to continue to manage and operate the property as it evaluates long-term plans for the property, Humphries said.
Recent discussions about the property have concerned whether the organization should seek fair market value in a sale of the building – estimated around $1.1 million – or accept a lower amount to get out of the expense of owning it or if a project would generate community benefit, such as job creation.
The CIC board also voted to ask Warren City Council and the Trumbull County Board of Commissioners to approve resolutions designating the CIC an agency acting on their behalf. The resolutions are sought in support of the CIC’s request to the state of Ohio for an exemption to property taxes on the RG site.
The property has accrued nearly $90,000 in property taxes, said Angela Neely, chief financial officer of the chamber.
Once the state has the documents it needs, the application for the tax exemption should take a month to process, Neely said.
Franklin said he would try to get a resolution on the City Council agenda at its first meeting in December. Trumbull County Commissioner Frank Fuda said he believed he could get the commissioners to approve a resolution at their next meeting.
“I will try to get council to act on it with one reading,” Franklin said.
Copyright 2018 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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