YOUNGSTOWN, Ohio – Ian Beniston foresees several possibilities for the building on Glenwood Avenue that not so long ago served as the distribution center of Rescue Mission of the Mahoning Valley.
The front of the building could house a storefront to serve the neighborhood, such as retail, says the executive director of Youngstown Neighborhood Development Corp. The rear could be some type of maker space.
“It’s great flexible space,” Beniston says. “I believe we can have multiple businesses operating out of that location.”
Redevelopment of the building on the South Side is coming about through a collaboration between YNDC and the Western Reserve Port Authority. The port authority acquired the building by using one of the unique powers it has under Ohio law.
The port authority is buying the building, which it will hold for as long as 18 months while YNDC secures the grants it will use to buy the structure from the port authority. In the interim, it is leasing the property.
“Structurally, that thing is just rock solid,” says Anthony Trevena, director of economic development of the port authority and head of its Northeast Ohio Development and Finance Authority.
The Glenwood Avenue building, which has conveyor systems and docks, could host several microenterprises on the main floor and the basement could be subdivided.
The project represents the first step in an agreement between the YNDC and the port authority to create needed “market-ready space” attractive to business along the corridors of Youngstown, Beniston says.
YNDC, Trumbull Neighborhood Partnership and the land banks in Mahoning and Trumbull counties “do a very good job but don’t really get involved with commercial properties,” says John Moliterno, “and commercial properties are very much a problem in both counties.”
Moliterno is executive director of the port authority.
Under Ohio law, port authorities can purchase and transfer properties without conducting a public bid.
This power was used to acquire the former Warren Scope senior center and transfer it to downtown Warren developer Mark Marvin, who is developing a winery there.
WRPA and the city of Warren also are working together to redevelop other properties under an agreement they entered into last year.
That ability is among the tools – specific to the port authority in the Mahoning Valley – that the agency uses to promote economic development in the region.
When the port authority was formed in 1992 to take over what is now Youngstown-Warren Regional Airport, its founders chose the portion of the Ohio Revised Code that provided it with the widest range of powers, says Moliterno, a former chairman of the port authority board.
“We wanted to position ourselves so that some day we could utilize the powers of the port authority to be more involved in economic development,” Moliterno says.
Its financing tools include the ability to provide bond financing for large construction projects with a capital lease option. Among its benefits is a sales tax exemption on construction materials and lease payments that will fully amortize debt.
The capital lease option is a “selective product,” Trevena explains, and is used to make projects more economically feasible.
One of the more notable projects that took advantage of the development tool is the Hollywood Gaming at Mahoning Valley Race Course in Austintown, for which the port authority provided $60 million in capital lease financing.
The capital lease also was used to help LRC Realty Inc. develop the Enclave student housing and retail development under construction near Youngstown State University.
“That has a significant benefit for a project like this,” says Gary O’Nesti, LRC Realty special projects director. The capital lease incentive, along with financing the city of Youngstown provided, “helped us make a decision,” he says, to move forward with the project.
Another financing tool the port authority offers are conduit revenue bonds, which supported Pittsburgh Institute of Aeronautics’ $1.3 million expansion of its campus at the regional airport in Vienna Township.
“They needed to expand, they needed to put more classrooms in, and we were able to partner with them to help make it happen, with those tax- exempt bonds,” Moliterno says.
Tax-increment financing, used in support of the racino and the Inn at Poland Way, a senior living complex, helps developers make capital improvements associated with a project, says Sarah Lown, public finance manager of the port authority.
“When an investor comes in to build on a piece of undeveloped land, the improvements made to that land also raise the appraised value of that land,” Lown says.
As a result, the annual real estate tax bill rises, she continues. Using tax increment financing, half of the additional tax revenue can be used for capital improvements – such as roads or other infrastructure – at or near the project site.
Another tool allows for the creation of a property assessment clean energy district to finance improvements related to energy efficiency for new and existing properties.
The port authority worked with Simon Property Group and Boardman Township to finance improvements at the Southern Park Mall, the only such project WRPA has undertaken.
“It’s kind of a bulky program,” Lown says. The mall project was “perfect” for the program because the assessment would be spread among leaseholders, she says.
Applying the program as one of the tools to facilitate development of the DoubleTree by Hilton in downtown Youngstown was considered “but there was no way to capture back the cost of borrowing that money,” Lown says.
“It’s like doing a capital lease on a $1 million project. It’s not worth it,” Trevena adds. “It’s a losing proposition. The economics aren’t there.”
The port authority’s property management role has expanded in recent years beyond its operation of the airport to encompass Castlo Industrial Park, which it began running in 2016 under an agreement with Castlo Community Improvement Corp.
As a result, the port authority worked with Aqua Ohio to develop a new Mahoning Valley operations center at Castlo, which opened there last year.
“We created a few programs as an outgrowth of our management to incentivize selling pieces of the industrial park for development, and we created a design-build program that streamlines the process of developing and building out property,” Lown says.
The port authority created tools so that Aqua Ohio can own the building but not the land, assume a 99-year lease on the land “and all kind of different variations on real estate options,” Lown explains.
In general, the port authority isn’t in business to acquire property on a speculative or long-term basis, Moliterno points out.
An exception is its purchase last year of the former Harshman Building downtown.
The port authority entered into a lease with Eastern Gateway Community College, which is occupying the first floor and basement for office and classroom space and is close to announcing a tenant for the entire second floor, Trevena says.
Pictured: Anthony Trevena, Sarah Lown and John Moliterno say the port authority’s toolbox contains incentives specific to the agency.
Copyright 2018 The Business Journal, Youngstown, Ohio.