YOUNGSTOWN - Youngstown city leaders have pulled the plug on a $57 million plan to redevelop 20 Federal Place, citing concerns that the deal could saddle taxpayers with decades of debt.

City Finance Director Kyle Miasek said developer Bluelofts wanted the city to act as a financial “backstop” for the project for 30 years.

Under that arrangement, if Bluelofts failed to generate enough revenue to cover its annual multimillion-dollar bond payments, the city said it would have been responsible for the shortfall.

“It doesn’t make any sense for us to put future generations in debt," First Ward Councilman Julius Oliver said, "To that amount of money. We’ve learned so many lessons from the past. We’re very cautious about making sure we do the right deals at the right time for the citizens of Youngstown.”

Tenants were ordered to vacate the building in 2022 to prepare for redevelopment.

Miasek said Bluelofts initially proposed traditional financing using historic tax credits, with the possibility of one-time city assistance.

In May, however, he said the company shifted toward a student housing model, which created complications with financing and tax credits, ultimately making the project more expensive and less viable.

An outside legal review confirmed the risks, and city leaders decided to end the agreement before finalizing it.

“Before the city was actually locked in, it was a good move for the administration to sever that relationship before you got locked into something that you couldn’t turn back on,” Oliver added. 

With millions of dollars in asbestos already removed, Fourth Ward Councilman Mike Ray said the property is now more attractive for redevelopment.

A city spokesperson said in a statement, the administration remains “100% committed to seeing this project through, as it is an economic development priority. We are planning to explore options and approaches with other developers to ensure the project is completed in a way that also makes financial sense for the city and our taxpayers.”