WATCHDOG REPORT: Youngstown Law Director says buying 20 Federal was a 'terrible idea,' but optimism remains
The City of Youngstown has owned the iconic 20 Federal Place building, also at one time known as the Phar-Mor building, for almost 20 years.
It's a purchase that has cost the city millions to keep up with and now they are tasked with finding a developer that's fit to take over.
"There's no question," Youngstown Law Director Jeff Limbian said, "We're stuck with what is right now, an albatross."
It was 2004 when Youngstown voted to buy the historic 20 Federal Place under then-Mayor George McKelvey, citing an "emergency measure, necessary" for "public peace, welfare and safety."
Former owners were suffering financially, after the drugstore chain Phar-Mor when bankrupt.
Nearly two decades later, Limbian said while buying the building may have been done with the best intentions, it put the city in a difficult spot, costing taxpayers millions.
"I wasn't in the room at the time that the former administration decided to weigh in and invest in 20 Federal," Limbian said, "But I can tell you with hindsight, being much clearer, it was a terrible idea."
The city bought the building for $850,000, a fraction of what it was worth, but this was only part of the cost.
Limbian said the city has since spent about $1,000,000 a year to run the building. Utilities, security and missed rent payments have all added to the city's financial burden.
"So now we've had to try and find a way to make this building marketable," he said, "We've tried to sell it a number of times. There were no buyers."
Despite the burden they've faced, the city now points to recent statewide funds, which they said present a new opportunity for 20 Federal.
Bidding opens this week to begin costly work inside to remove asbestos. In the past, this work would have been impossible to afford but a $7,000,000 Brownfield remediation grant will make it happen because it's state money earmarked for decaying buildings, recognizing urban needs.
Youngstown Mayor Tito Brown said he envisions 20 Federal repurposed into new office space, apartments and a grocery store.
The city has been working with developers to try and bring that vision to life, but estimated costs have gone up. One Pensyvlania-based developer project costs at nearly $100,000,000, so the city said they may need to consider other options.
"Bottom line, one of the things I really want to see is we're going to have a sit down with all those parties involved and say, 'Where's the money? You're going to have a capital stack to go further,'" Brown said.
Limbian said he doesn't think there will be enough federal and state money out there "to entice someone [developer] to come and do it."
Desmone Architects is a Pensvylania-based architect firm working with the city on future development, as well as the city's consultant and other initial developers showing interest. The firm said they "anticipate to continue working with the city to apply for the next round of State's Historic Tax credits and Transformational Mixed Used Development funds."
President of Desmone, Eric Booth, said, "These awards will inform the structure of a formal developmental contract."
Unless the city can find a developer with a "scaled-down approach," or is willing to invest at least $20,000,000 of their own money, Limbian said the city may have to do the work themselves.
"But I can assure you, one way or another 20 Federal is going to transform," Limbian said.
Work on asbestos removal is expected to begin in March.