A place to stay
Local excitement resonating from Thursday’s announcement that VAM USA LLC would follow through on plans to build a new $81.5 million pipe threading plant in Youngstown wasn’t coming only from potential workers and building contractors.
Construction phases of manufacturing facilities like VAM USA brings engineers and contractors to the area, hotel and travel experts said last week. And even after construction is done, there is much to look forward to, according to those in the hospitality industry.
“You start seeing mills and more suppliers, and that’s good because that’s the kind of stuff that’s going to stay,” said Dave Mangus, area director for TMI Hospitality, the hotel operations firm that is building the new Residence Inn by Marriott at Eastwood Mall. The hotel has been under construction for more than a year and is projected to open for business in May.
VAM USA, billed as the nation’s leading supplier of premium threaded connections for the oil and gas industry and a sister company to the Vallourec Star pipe mill in Youngstown, announced last week it would purchase and develop property for a new threading plant on Ohio Works Drive in Youngstown.
The planned 67,000-square-foot facility will thread VAM connections on pipe produced at the adjacent Vallourec Star mill and destined for the North America oil and gas shale plays.
The oil and gas industry has been especially good for the local hotel industry, and the creation of permanent energy-related manufacturing facilities only helps area hotels in their never-ending quest to keep their rooms filled.
“It had a huge impact two or three years ago when (oil and gas companies) were leasing,” Mangus said last week.
At that time, area hotels saw an upswing in bookings by landmen traveling to the Youngstown-Warren area from oil country regions of the southern U.S. as they worked to lease tens of thousands of acres of mineral rights in the area. The landmen spent months at a time here, working for companies like BP America, Halcon Resources, Chesapeake, CNX / Consol and others.
Now that most of the leasing work is done, those long-term hotel guests are gone.
“The complexion has changed,” Mangus said, noting that drillers and crews working on rigs generally use short-term apartment leases or mobile homes rather than hotel rooms for lodging.
That’s not the case with the manufacturing industry, though.
“They bring engineers from different parts of the country. You have suppliers that come and stay for a while, sales staff, government officials, training,” Mangus said. Area hotels saw overseas guests come in as Vallourec Star, parented by a French-based company, was coming on line and holding its dedication festivities, Mangus said.
In a statement released Friday, VAM USA spoke generally about its plans. The company, based in Houston, is a joint venture company between Vallourec, Nippon Steel & Sumitomo Metal Corporation, and Sumitomo Corporation.
“VAM USA’s investment responds to the customers’ requirements for high quality tubular products in proximity to their operations and provides the one stop shop for the finished goods they need,” VAM USA president Eric Shuster said in the prepared media release. “This project will also create numerous construction jobs and around 80 full time positions when production starts next year.”
That’s likely what area hotel operators, including those at the new Residence Inn by Marriott, wanted to hear. During a tour of the new facility last week, operators showed off rooms with full kitchens and amenities targeting guests who will stay for about five days on average but who could stay months or longer. Extended-stay hotels often see more business than leisure travelers.
Stephanie Sferra, director of the Trumbull County Visitor’s Bureau, understands well the boon that development like VAM USA will bring to the Mahoning Valley.
“When you are talking about a lot of these oil and gas companies, their engineers and executives come from out of the area – Texas, Oklahoma. When they come in, they are coming in for business,” Sferra said, noting that they have a need for a hotel where they can stay and conduct business. “I have to agree with the Residence Inn. They are going to have people coming and going all the time.”
Sferra, whose budget is comprised primarily from the tax imposed on hotel lodging in Trumbull County, is hopeful – and optimistic – the growth with continue.
“These companies would not be making an investment if they didn’t know that something was here,” Sferra said. “There’s good stuff happening.”