YOUNGSTOWN — With time set to run out at the end of 2025 on $24 million in historic tax credits to redevelop the city-owned 20 Federal Place, city officials said they will move ahead with entering into an agreement with the only firm that submitted a proposal to improve the downtown building.

To seek new proposals could cost the project those tax credits — $10 million from the state and $14 million from the federal government — which would make the redevelopment effort much harder, said Kyle Miasek, the city’s finance director.

“If we let this slip through the cracks, those dollars are going to no longer be there,” Miasek said during Tuesday’s council community planning and economic committee meeting. “There are opportunities for us that if we’re not comfortable, we can actually pull away from the table. That makes me comfortable.”

Miasek added: “But at the end of the day, I don’t want to be forced into that. If we have to back out and market this facility without that ($24) million, we’re going to be tasked with a much larger task. This set-up is complicated.”

Bluelofts Inc. of Dallas was the lone respondent to the city’s request for redevelopment proposals for the nine-story building at 20 W. Federal St.

PROJECT DETAILS

Doug Rasmussen, CEO and managing principal of Steadfast City Economic & Community Partners, the city’s St. Louis-based consulting firm on this project, gave a presentation to the council committee Tuesday.

Bluelofts is teaming up with Madrone Community Development Foundation of San Francisco, which primarily helps local governments and higher education institutions develop affordable workforce and student housing facilities, Rasmussen said.

Madrone would own the property through a nonprofit charitable organization, referred to as 501(c)(3) under IRS law.

The project’s cost would be $57 million, Rasmussen said.

The building, to be renamed The Federal, would have 100 apartments to house 180 people in one-to-three-bedrooms with 43 of the apartments being affordable / workforce housing at 80% median income rent as well as 30,000-square feet of commercial space, a small wellness center, and e-commerce and mini-warehouse space on the first two floors for smaller businesses, Rasmussen said.

The project also calls for 62 parking spaces in the basement and a deal to lease 66 parking spaces in the city-owned lot on Commerce Street that may be transformed into a potential parking deck, Rasmussen said.

Construction would start in October 2025 and be finished around June 2027, Rasmussen said.

The plan is for the city board of control to approve a memorandum of understanding with Bluelofts at its Dec. 19 meeting, but Mayor Jamael Tito Brown said that could be pushed back to later this month if council isn’t comfortable with the project and the funding plan.

Brown said this is all very new to Youngstown so he understands if council has hesitation because he had questions before the funding was explained to him.

“It is probably one of those items that we never had a chance to experience,” he said.

Brown added: “It’s one of those pieces where we’ve got to do something (with the building). This is a great opportunity,” and “it’s well worth our attempt to swing at this and knock it out of the park than not swing at all.”

Councilman Julius Oliver, D-1st Ward, said, “At this point we’ve got to do something.”

Councilman Mike Ray, D-4th Ward, said, “This is definitely different than what we’ve done before. I think making sure our homework is done and we have a comfort level, there’s always going to be risk and we have to see what our appetite for that risk is.”

Brown said the deal comes with “an off ramp” that allows the city to get out of the contract.

“If we start down this road and if we start uncovering things that’s not to our liking, we can say, ‘never mind, thank you so much,’ and we continue on,” Brown said.

BLUELOFTS

Bluelofts has purchased properties in Cleveland, Dallas, Fort Worth and Atlanta with plans to convert them into residential space.

But the only project it has completed is the former Ohio Bell headquarters, now called The Bell, in Cleveland that was redeveloped into 367 market-rate apartments with some retail and commercial space available.

That happened with the assistance of another developer after its initial partner, Wolfe RC Management LLC, faced foreclosure in its stake in the 16-story property. Wolfe is a frequent partner of Bluelofts and lost two other projects to foreclosure, according to The Real Deal, a real estate publication.

The city purchased 20 Federal Place in November 2004 after Phar-Mor, a national retail store company, went out of business. The property was the Phar-Mor Centre, the company’s corporate headquarters. Before that, the 332,000-square-foot building was the flagship location of Strouss’ department store for many decades.

There were 19 tenants, taking up about 20% of the building before eviction notices were sent in July 2022. Some tenants were given an extension before leaving.

A contractor finished a $7.4 million asbestos abatement and partial demolition project in October at the building. The city received a $6.9 million state grant, announced June 2022, to pay for most of the work.

PENGUIN CITY

Also Tuesday, council’s community planning and economic development committee endorsed a 75%, 10-year tax abatement for Penguin City Brewing Co., which is planning a $700,000 expansion.

The expansion includes paving the remaining portion of the parking lot at the brewery and taproom at 460 E. Federal St., providing additional handicapped accessibility, installing roof panels, adding outdoor electrical outlets to support food trucks, constructing restrooms for its banquet center as well as sanitary repairs, window replacements and insulation improvements.

Penguin City would save $134,137 in taxes over the 10 years and pay $44,712.