YOUNGSTOWN, Ohio (WKBN) — Youngstown Mayor John McNally confirmed before the city’s Board of Control meeting Thursday morning that the VAM USA, LLC $81 million pipe threading mill project will be located in Youngstown and construction will begin immediately.
VAM USA, LLC is a joint venture between French-owned Vallourec and Japanese companies Sumitomo Corp. and Nippon Steel & Sumitomo Metal Corp. This investment will create approximately 80 jobs, with the potential to expand that in the future, as well as hundreds more during construction. The company will be releasing a statement soon.
The project will be built at the old Genmak Steel location off Division Street. It would take in product made at Vallourec and other locations and re-tool the ends so they can be connected to each other for use in drilling platforms.
The project was given a 75 percent tax abatement on Thursday.
McNally said developers want the project on a fast track.
“They do want to start right away. As soon as the weather is cooperative to what they want to do. I think they have done some initial work on the site already and obviously look forward to getting some construction workers out there and pumping some income tax money back into the city’s coffers,” McNally said.
Youngstown Finance Director Dave Bozanich said he expects an additional $250,000 to $300,000 in new city income tax from the project.
Bozanich said the project could mean an extra $500,0000 a year in real estate taxes for the Youngstown City Schools. But even beyond the windfall for local governments, officials are hoping the new mill will make the city even more attractive for potential growth.
“We hopefully would like to see some other suppliers to them come into the area. And we would certainly continue to work with the Regional Chamber, JobsOhio and whoever else wants to be a partner with us to help develop that corridor,” McNally said.
The project already is helping breathe new life into what sat as empty brownfield space for so many years.
“One of the things we’re finding, there is a shortage of good quality commercial buildings in the city right now. We’ve done a pretty good job filling up there,” Bozanich said.
Valley Congressman Tim Ryan, D-Niles, said the VAM USA announcement is yet another sign the Mahoning Valley is a great place for businesses to operate.
The Congressman said while the mayor’s staff and Youngstown City Council have done a lot to make the area attractive to potential developers, state and local government, as well as the Regional Chamber, also had roles to play. Among them was the $20 million set aside in 2009 through the President’s stimulus program to pay for needed site improvements during Vallourec’s billion dollar tube mill expansion.
“This is the whole ideal of the public-private partnership, see what small role maybe the public can play in making some key investments and then allow the private sector to come in and make their investments to allow projects to move forward,” Ryan said.
Ryan also praised efforts by lawmakers to press for fair trade practices and ensure those countries trying to dump their products in this country and hurt U.S. manufacturers face economic penalties. One of those lawmakers is U.S. Sen. Rob Portman, R-Ohio, who has been pressing the Obama administration and the International Trade Commission to ensure other countries trying to undercut U.S. firms through illegal trading practices are punished.
“These products are being dumped into America, some of them are being sold at below their costs and that’s called ‘dumping.’ Other products are being subsidized by their governments, so their government is adding their finger to the scale, so it’s not fair,” Portman said.
Portman said the efforts of he and others like U.S. Sen. Sherrod Brown, D-Ohio, have worked to provide what he calls some “breathing room” for American companies, giving those mills a level playing field to compete on the world market.
For his part, Brown on Thursday announced a one-of-a-kind bill called the New Markets Tax Credit. If passed, it would provide tax incentives to cities hit hard by manufacturing job losses with the goal of bringing more of those types of jobs back to the area to help the local economy.
Brown said Youngstown already has seen more manufacturing jobs come to the area because of tax incentives like the 75 percent property tax abatement given to VAM USA.
“These New Market Tax Credits will help both the downtown development and manufacturing development and that’s why this is so important,” he said.
Brown said he hopes the tax credit will encourage manufacturers to use old vacant buildings that remain in decent shape.