Pig Iron Occupant to Redeem Building, Halt Sale
YOUNGSTOWN, Ohio – The occupant of a downtown building that sold for $90,000 at auction a week ago said he intends to redeem the building, stopping the sale to a pair of area developers.
Jim Villani, owner of Pig Iron Press, said he plans to pay the remainder of the tax bill on the 26 N. Phelps St. building to American Tax Funding of Jupiter, Fla., which purchased the tax lien on his property, from Mahoning County. Villani had owed $6,238 in back taxes but paid $5,000 prior to last week’s sheriff’s sale of the building.
Michael Naffah of Naffah Hospitality and Naffah Development submitted the winning bid, $90,000, for the property, and he and downtown developer Dominic Marchionda, who was also at the auction, decided to jointly develop the property.
Late last week Villani said he had come up with the remaining funds but was undecided as to whether he would satisfy the tax bill, redeeming the property, or permit the sale to go through and use the remaining proceeds from the sale to establish operations elsewhere.
Monday afternoon Villani said he intended to make the remaining tax payment and keep the property. The property has the value that he claimed it had and can be redeveloped, he said.
When he considered allowing the sale to go through, Villani said was “not informed about the nature” of what was happening at the auction and claimed the top two bidders were bidding against each other to “intimidate” other seekers of the property. “I assumed that they were separate entities. I didn’t find out except in the newspaper that they were partners,” he said.
Marchionda, the developer of Erie Terminal Place, said he never bid on the property during the auction, and he and Naffah decided afterward they would partner to develop the building. Alhough he was disappointed by the prospect of losing the building, Marchionda said he is pleased that Villani was able to come up with the funds to pay the tax bill and wished him well with his business.
“I wish he would have done it sooner. It would have saved us all some headaches,” he said.
Villani has until the sale is confirmed to pay the remaining tax bill and redeem the building, nullifying the sale.
Villani expects to have at least one tenant in the building, L.E.E.P. Software, which signed a lease last month for space on the second floor. L.E.E.P., owned by Nelse Dumas, is a startup company that “plans to design, develop and distribute security software for a wide range of businesses in order to guard against hackers,” according to the company’s project summary submitted to secure funding from the Youngstown Initiative program.
“It’s a hack-proof software,” Dumas said.
The Initiative committee, which met Monday, recommended a $6,900 subordinated loan/performance grant toward the total project cost of $34,503 for equipment and working capital. According to city documents, the company plans to hire two full-time employees in the first year, three in the second and five in the third.
Employees will include engineers who will write the software and bring it to market, said Dumas.
The funding would be contingent upon L.E.E.P. securing private-sector financing. Dumas plans to seek a U.S. Small Business Administration-guaranteed loan through JPMorganChase, said Tom DeAngelo, coordinator in the city’s economic development office.
Asked whether he attempted to use the Youngstown Business Incubator as a resource, Dumas said YBI “didn’t understand this type of software” and wasn’t ready for what he had.
Jim Cossler, the incubator’s CEO, confirmed he met with representatives of L.E.E.P. three or four times but “didn’t find them to be a fit for YBI.”
T. Sharon Woodberry, city economic director, “strongly” encouraged Dumas to take advantage of the resources at the Small Business Development Center at Youngstown State University “to further develop” his business plan. “That’s going to be integral to any bank financing this project,” she remarked. “I don’t know that you’ll be able to secure that financing based on what I’m seeing here.”
During the meeting, the board also approved $2,166 toward $10,832 project costs for machinery and equipment for Ms. Charlotte’s Resale Boutique, a consignment store at 3625 Market St., another startup. Owner Sharetta Stokes-Baker, who works at Sojourner House, wants to provide upscale clothing and accessories at low cost for women, DeAngelo said. The company plans to hire two part-time employees in its first year, and one additional each in the second and third years.
Stokes-Baker also plans to seek SBA-backed financing.
Both requests must now go before the city’s Board of Control.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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