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Port Authority expands economic reach in city

WARREN — The Western Reserve Port Authority’s expanding economic development role in Trumbull County was solidified when Warren City Council recently approved a one-year agreement that allows it to market and sell some city-owned property.

The plan — the first of its kind in either Trumbull or Mahoning counties — allows the city to bypass some of the steps required when selling or developing property it owns, including the bidding process often necessary for certain projects. The one-year agreement both sides already approved allows the city to turn over to the port authority, if either side finds a buyer or developer willing to take them, the following properties:

• The former Mahoningside power plant on Summit Street NW;

• The former Ohio Public Defender’s Office, 328 Mahoning Ave. NW;

• Progressive Kingdom Church, 1704 Milton St. SE;

• Warren’s former Community Services building, 418 Main St. SE;

• A city-owned parking lot next to the Warren-Trumbull Urban League on West Market Street;

• The building that houses SCOPE of Warren at 222 W. Market St.

• A 4.5-acre piece of property at the intersection of South Street SW and Main Avenue SW.

There are suitors that have shown interest for at least five of the city-owned properties.

“There has been been some interest expressed about 418 Main Ave., the Warren SCOPE, the public defender’s office and the Progressive Kingdom Church,” said Warren Safety Service Director Enzo Cantalamessa. “Some of the calls have been simply people asking about the properties, while others are more serious.”

The port authority will help Warren with acquisition and / or development of various projects, according to the agreement.

“The port authority is not required to take and hold any of these properties,” Cantalamessa said. “It does not want to hold city properties. There will be agreements to turn over properties only if there are persons or organizations that show serious interest in looking at purchase or doing developments.”

Any sale price would be based on what the port authority deems is reasonable. Payment to the port authority would come from project proceeds, such as revenue from property sales. However, the city would pay the port authority any “ordinary or extraordinary costs associated with ownership and development” of the projects, the agreement states.

“There is no set percentage the Port Authority will receive for each sale,” said Michael Keys, director of Warren’s Community Development Department.

If the administration wants to add more properties to be turned over to the port authority, city council must vote to deem them no longer necessary for municipal purposes, Cantalamessa said.

As an example of the port authority’s ability to broker a deal, Cantalamessa said because the port authority owned the property on which Hollywood Gaming at Mahoning Valley Race Course in Austintown is now located, it was able to give the developer a tax-exempt status on sales tax, which resulted in more than $7 million savings for the racino owners.

“We cannot do that,” Cantalamessa said. “It is a tool they have available to them that we don’t. This is giving us one more economic tool for our tool belt.”

Warren has tried before to unload some of its properties, but sold just a vacant parcel of land at 0 Summit Street NW to Terry and Mary Chillog at its $200 appraisal price.

There was no interest in the other properties — the old Community Services building, which was appraised at $255,000; a parking area behind Car Part Warehouse, 306 E. Market St., which was appraised at $5,900; the former Public Defender’s office, which was appraised at $40,000; and the Progressive Kingdom Church on Milton Street SE, which was appraised at $30,000.

Keys said by having an organization such as the Western Reserve Port Authority negotiate deals with potential developers, they can set conditions of use, negotiate below-market prices and offer incentives that cannot be done by the city during a bidding process.

“This agreement provides us with options we otherwise would not have,” Keys said. “There are times when we may want to control the types of businesses on these properties. Or, if a developer will guarantee jobs, we may be willing to sell the property at a substantially reduced price or simply turn it over to them.”

Some properties, such as 418 Main St. SE, have such high costs for rehabilitation or demolition, it prevents developers from making bids on them.

If the cost to rehabilitate or demolish a property is near or above its appraised value, it may be beneficial to allow a developer to simply take possession of it with the contractual understanding they will assume responsibility for all environmental and other associated costs, said Keys.

“Each case will be judged on its own merits,” he said.

Published: The Tribune Chronicle, Raymond L. Smith, August 6, 2017