YOUNGSTOWN, Ohio (WKBN) – A series of memos obtained by First News shows there is disagreement growing within the city of Youngstown on how to proceed with the renovation of 20 Federal Place, also known as the former Strouss building.
Two of the memos come from the Desmond Group of Pittsburgh, which has put the deal together so far.
The other is from Youngstown City Law Director Jeff Limbian, who strongly criticized a proposed contract with Desmond.
The memos come three weeks after Youngstown was awarded a $6.9 million Brownfield Remediation Grant and total renovation of the 96-year-old building looked promising. But according to the Desmond memos, the total cost of the renovation is now up to $74 million.
The project now needs more government help in the form of $30 million in tax credits. To get the credits, Desmond has formed a limited liability corporation and is seeking to lease the building from the city.
According to Limbian’s memo, the lease would be either 40 or 50 years, which he says is “contrary to public policy.”
It also gives the tenant complete control of the property. They can walk away at any time with none of their money invested.
The city would still be liable for all expenses, including taxes and insurance.
Rent would be $100 a year and there is no out clause for the city.
“The proposed lease agreement does not protect the city and its public funding in its current proposed incarnation,” Limbian said.
Jim Ambrose of Desmond Group then responded, calling Limbian’s information “inaccurate.”
“If our region does not demonstrate that we are mutually advancing economic development, do we really think the state will take any future… applications coming from the Youngstown region seriously?” Ambrose asked.
We should know more when the issue is discussed at a city hall meeting on Tuesday at 4 p.m.