Youngstown Initiative OKs Grant for Gillam Project
YOUNGSTOWN, Ohio – The city's Youngstown Initiative committee is recommending a grant of nearly $40,000 for a treatment center targeting adolescent females to be developed by former councilman Artis Gillam, the husband of Annie Gillam, who succeeded him as 1st Ward councilman in 2008.
The committee, which met Thursday morning, approved the $39,599 grant, which represents 20% of Gillam’s project. Gillam proposes to convert the former Holy Name of Jesus school building, 610 N. Lakeview Ave., into Artis’ Tender Love & Care, a residential treatment center for adolescent females who are dependent, neglected and abused.
The business, which Artis Gillam said he hopes to have operating as early as May, would provide study, lounge and kitchen facilities as well as sleeping facilities for 10 clients during the initial year of operation, expanding to 40 by the fourth year. Residents, who would also attend school, would also be trained in life skills such as sewing and cooking as well as painting and carpentry to help them when they go back into the community.
“We want to nurture them and make sure they feel their self-worth and not just come in and sit, play games and so forth,” Gillam said. The center would receive $200 per day per client from state juvenile justice and children’s services funds, though he projected $175 to be conservative, he said. Clients might stay about six months to three or four years, he said.
The project would create six full-time jobs in its first year, five in the second year and six in the third year, according to the application. Payroll is projected at $256,000 in its first year of operations and $408,588 in the second year. Gillam, who said he wouldhave investors but will own 100% of the business, is projecting $546,000 in revenues in the first year and $1.04 million in the second year.
Gillam said he is in the process of purchasing the former school building and is in talks with Huntington Bank and the Mahoning Valley Economic Development on financing. The building, which has been vacant for three years, is in “very good condition,” he said.
The committee accepted the recommendation of the economic development department that Gillam receive 20% reimbursement for the project rather than the 10% it would ordinarily qualify for.
T. Sharon Woodberry, city economic development director, recommended the higher reimbursement, normally reserved for projects along the city’s major corridors or for certain targeted industries, because the building is a “significant structure” in the neighborhood and the project could help address a potential eyesore.
Gillam must also produce proof of ownership of the building prior to receiving the city funds.
Despite Gillam’s past status as a city councilman and his spouse’s current position, there is no conflict of interest, said Anthony Farris, the city's law director. “Having a contract with the spouse of a public official does not create an interest inherent in the contract on the part of the public official,” he said. “The only way there would be any impropriety would be if that public official voted on our activity or participated actively in authorizing the contract.”
Annie Gillam, who serves on the Initiative committee, excused herself from the meeting when discussion of the grant for her husband’s business came up from consideration and did not return before the meeting was adjourned. Her vote was counted as an abstention.
Additionally, the committee recommended the city provide a $100,000 grant for the Learning Egg LLC’s project. Learning Egg, which developed the Lightning Grader for educators, plans to spend $514,750to build out the iPad grading system, district reporting, hiring of sales and support staff and providing access to educational events for new employees, according to the company’s application.
Learning Egg is now located in the city-owned 20 Federal Place. Its current lease expires in a few months, with a one-year renewal option. The company is in discussions for space in the Youngstown Business Incubator.
Learning Egg projects creating eight full-time jobs in the first year, 10 in the second year and 14 in the third year. Payroll projections are $405,685 in the first year and $1.19 million in the second year. Projected sales are $765,000 for the first year and $6.1 million in the second year.
The company's CEO and majority shareholder, Elijah Stambaugh, said he had been looking for tools to make it easier for teachers to do their jobs and to allow them more time to do instruction. The Lightning Grader can grade 100 pages per minute and is now being used in more than 35 states and in four of the nation’s 10 largest school districts. The system is adaptable down to the individual teacher level, he said. Learning Egg doesn’t dictate content but provides the framework for educators to create the assessments, he said.
“I didn’t need for somebody else to tell me, ‘This is exactly what you have to do.’ I needed something that met my needs,” said Stambaugh, a former educator. “One of the powerful aspects of our program is that it’s flexible.”
Jim Cossler, YBI’s CEO and chief evangelist, told the committee that Learning Egg is among the highest-potential startups -- if not the highest -- he has seen since the incubator shifted its focus to software and technology development 12 years ago. The incubator has put $44,000 in cash, not in-kind services, into Learning Egg, the highest level it has ever put into a company. He said he has argued with Stambaugh about underprojecting its revenues and employment growth.
“This is another company, vey very much like Turning Technologies, that’s not going to break out nationally but it’s going to break out internationally,” he predicted.
David Bozanich, city finance director, called for a stipulation that would require the city’s funds to be paid back in the event that Learning Egg is purchased and relocated outside the city.
Cossler acknowledged the validity of Bozanich’s concerns, but noted that software companies are “a little different” than other firms, and the city and YBI have created a technology campus downtown that is “the single finest place” for a tech company to operate, and that he doesn’t understand the business case for moving from a managed technology cluster.
Both recommendations must be approved by the city’s board of control.
A third application for funds, by Nemenz Lincoln Knolls Market Inc., 2980 McCartney Road, was withdrawn at the start of the meeting at the applicant’s request. Woodberry said the company initially submitted an application for assistance for the first phase of its project but wanted to resubmit the application to take into account the broader project it has planned.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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