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"Bite of Paying $325,000 Up Front Eased for Youngstown"
"YOUNGSTOWN, Ohio -- The city of Youngstown will avoid paying up front the $325,000 needed to raze the vacant buildings in Federal Plaza West where the courthouse for the state 7th District Court of Appeals will be built.Instead, the Youngstown Central Area Community Improvement Corp. has reached an agreement with Mahoning County for the county to issue short-term bond anticipation notes (BANs) to be purchased by the city and retired over several years.The two-story courthouse, to offer 13,500 gross square feet and scheduled to open Jan. 1, 2006, will be built in from 123-139 Federal Plaza West with the First Educators Building to the west. To be torn down are the Dial Finance, Lustig's, Connection and Malkoff buildings. An empty lot stands between the Malkoff and First Educators buildings. The CIC will donate the parcels on which they stand, valued at $73,600, to the project. The CIC executive committee was informed of the financing project Tuesday afternoon. City Council must approve the arrangement and authorize the city Board of Control to act. "It could be done by the end of the month," Third Ward Councilman Richard Atkinson, a member of the executive committee said. As chairman of council's finance committee, he expects the matter to be discussed in greater detail this evening. Whether an ordinance could be drafted in time that could allow a first reading at tonight's council meeting was unclear.Nat City Investments has reviewed the funding mechanism and "their analyses suggest that it should work," Reid Dulberger informed the CIC executive committee. Dulberger is executive vice president of the Youngstown/Warren Regional Chamber, which administers the CIC under a contract with that agency."The city would buy its own debt as an investment," Dulberger explained, roll over the debt up to several years and retire it when financial markets made it advantageous to do so. A draft memorandum of understanding between the city and the CIC would have Youngstown guarantee the BANs issued by Mahoning County. Each BAN would have a term of at least three years "with interest to accrue on the principal at no more than 2.25% per annum."Principal on the BANs could be paid periodically because the rents paid the city to defray the $2.8 million cost of the courthouse -- $250,000 per year -- would exceed the principal and interest in today's low-interest-rate environment, Dulberger explained.The executive committee also learned that the CIC will pay the Youngstown/Warren Regional Chamber its half of the $356,000 development fee on the four-story office building under construction that will house Mahoning County Children Services Board and Ohio Bureau of Workers Compensation. The other half of the fee is a source of income for the CIC.The CIC will pay the $178,000 in monthly installments of $22,000 beginning this month but hold February payment until the building is completed. The practice in the private sector, Dulberger explained, it to pay developers' fees by the time ground is broken.The CIC's practice has been to pay development fees when a project, such as the Voinovich Government Center, owned by the CIC and next door to the Children Services Board structure, is complete.The $22,000 installments will be taken from CIC operating revenues and treated as an expense. "It doesn't hurt us or take away any money we need," commented G. Richard Pavlock, president of the CIC and a senior vice president at First Place Bank. Atkinson recommended the $178,000 the CIC will receive from its portion of the development fee be earmarked for demolition and remediation of the other structures the CIC owns that are beyond salvage. "