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New Jersey Investor Makes Offer for Erie Terminal Building
By Dan O'BrienYOUNGSTOWN, Ohio -- A commercial real estate investor from New Jersey is prepared to shell out $1.15 million to purchase the Erie Terminal building on Commerce Street in the city's downtown. But the agency responsible for downtown development wants more details before any deal is reached.The issue was raised at Tuesday's meeting of the Youngstown Central Area Community Development Corp.'s board of directors, where it was also learned the CIC is actively pursuing construction of a second business incubator.Joey Stefko, broker and owner of Metro Group Inc., Boardman, told the CIC board an investor from New Jersey is offering $1.1 million for the vacant building. Stefko represents Strouss Building Associates, which co-owns the building with the CIC. Thus, any sale would require CIC board approval. The asking price for the building is $1.3 million."It's exciting to hear that people from out of town want to invest here," Stefko said. "The building is well maintained."Stefko declined to identify the investor at the meeting but it was subsequently learned the company's names is Southgate Properties of Fort Lee, N.J. Mark Brown, general manager of The Vindicator and chairman of the CIC's property committee, asked if the investor had any specific plans for the building.Stefko said he no specific details of the investor's intentions. "My guess it will be offices, with possibly a restaurant on the first floor," he said.Stefko added the investor is willing to place a $30,000 deposit on the facility, take another 45 days to perform due diligence work and close the deal within 75 days. The Erie Terminal owes $850,000 on a state bond and is current on its payments, Stefko said. But it is in default on a $342,000 loan it obtained from the city through the federal government's Urban Development Action Grant program, he noted. Under the deal, the CIC would at least recoup $200,000 from the sale, Stefko explained.Earlier this year, the building's only tenant, the Mahoning County Children's Services Enforcement Agency, relocated from the Erie Terminal to the McGuffey Mall on the city's east side. The site is owned by the Cafaro Co. of Youngstown and also houses the county's Department of Job and Family Services.Lacking additional information, the matter was referred to the property committee for further consideration. Stefko said he is scheduled to meet with the potential buyers soon and added he is also trying to arrange a meeting with Brown and CIC counsel Ed Romero.The board affirmed its intent to build a second business incubator building by approving a motion to pursue a grant through the Clean Ohio Assistance fund to help pay for demolition of vacant Federal Street structures. The cleared land would make way for construction of a new building to house companies currently located in the Youngstown Business Incubator on West Federal Street.Phase I of the remediation process has already been funded through a private source, Brown reported. The state funds would be applied to Phase II, which consists of demolishing CIC-owned structures located between the incubator and the Semple Building.The incubator provides low cost rent and services to fledgling high-tech businesses and contains several tenant companies that are developing software products. Once these companies become self-sufficient, they often move out of the area -- and out of the downtown. A second incubator building would enable companies graduating from the incubator to remain in the central business district.The Youngstown Business Incubator received $2 million in state capital funding toward construction of the new facility and expects additional state funds by the end of the year, Brown reported.The CIC board also heard a presentation Tuesday from Gary Balog, partner at Riciutti Balog & Partners, Youngstown. The architectural firm is overseeing construction of a $4 million addition to Powers Auditorium, which includes a 600-seat acoustical theater. The CIC is donating some land for the project.Balog said there are discrepancies over property lines that must be resolved before work can begin on the project. "We've got another week and a half or so to research documents and then it will go out for bids," he said.In other matters, the board approved a motion to enter into a memorandum of understanding with the city and Mahoning County for a joint effort to build a structure to house the 7th District Court of Appeals. Construction is expected to begin next spring.Jason Whitehead, CIC executive director, also reported to the board on work on the new Mahoning County Children Services Board building located next to the George V. Voinovich Center is on schedule.Contact Dan O'Brien at [email protected]"