Area business saw some gains in tough year
WARREN — Sure, the viral outbreak dominated the headlines this year; it bludgeoned businesses, caused joblessness to spiral out of control and threw the economy into a tailspin.
No doubt, COVID-19 was the No. 1 news story of the year, but dig a bit deeper and there was some positive local business-related news in the mix. So without further delay, the top 10 business stories, excluding the pandemic, this year in Trumbull and Mahoning counties:
1. Trumbull County part of GM’s electric future
General Motors announced Jan. 14 it had selected a 158-acre plot of land in Lordstown adjacent to its former automaking plant to build a $2.3 billion battery-cell manufacturing plant, a decision that meant upward of 1,100 new jobs here.
What would eventually become Ultium Cells LLC, a joint venture with South Korea’s LG Chem, was put on a fast track toward completion. It received the final permit to go ahead with construction in May and site work had begun within weeks.
The automaker will rely heavily on the multimillion-square-foot plant on Tod Avenue as it moves toward an all-electric future. Cells mass produced there will be used in battery packs that will power several vehicles in GM electric lineup.
GM and LG Chem equally are sharing the investment in Lordstown that’s on pace to start production in early 2022.
The plant is seen as key in the transformation of the Mahoning Valley from the Rust Belt moniker, given to produce images of decaying factories and long-gone days of the area’s thriving steel industry, into a vision of hope and prosperity with a high-tech twist — Voltage Valley — on the back of electric vehicle and component part manufacturing.
2. LMC gaining traction
Lordstown Motors Corp. and its battery-powered full-size pickup truck, the Endurance, are another spoke in the next-gen manufacturing wheel. The little company — for now — made big news in 2020.
Occupying GM’s former 6.2 million-square-foot facility in Lordstown, the startup publicly debuted the Endurance in mid-June with special guest Vice President Mike Pence.
In October, Lordstown Motors completed its merger with New York-based DiamondPeak Holdings Corp. and began trading publicly on the Nasdaq exchange. That merger was expected to inject $675 million into the company.
And earlier this month, it was given a tax credit that will save it an estimated $20 million in payroll taxes. in exchange for the promise to create 1,570 full-time jobs. It hopes to fulfill that pledge by the end of December 2025.
Production is expected to begin in late 2021.
The company, however, found itself fending off lawsuits.
Ann Arbor, Mich.-based DTE Lordstown claims it is owed more than $2.5 million in unpaid bills for utility-related work at the plant. Karma Automotive LLC in Southern California, meanwhile, claims Lordstown Motors stole trade secrets about Karma’s infotainment system and plundered a specialized team of Karma employees who were designing it.
Lordstown Motors in court papers called Karma’s claims a “fictional tale” and “fantasy.” Lordstown Motors has said it paid DTE Lordstown “in full for all of the operational costs due through the date DTE terminated the agreement.”
Trumbull and Mahoning counties, and Warren and Youngstown, routinely over the year were near or at the top of Ohio’s jobless index, produced by the Ohio Department of Job and Family Services.
In an area already struggling with high joblessness, the viral outbreak worsened matters when businesses shed workers or even closed. The rates have come down, but in November the area still faired poorly.
The latest numbers show Trumbull and Mahoning counties were in a three-way tie for fourth-worst rate in the state at 6.8 percent. Youngstown was tied with Maple Heights at the top with a 9.9 percent jobless rate and Warren’s 8.9 percent ranked it No. 6.
In October, Trumbull and Mahoning counties had a four-way tie for with Cuyahoga and Jefferson counties for the highest rate, 6.6 percent. Warren’s rate of 9.1 percent placed it No. 5 and Youngstown’s 9.7 rate was No. 3 for the highest rates among cities in Ohio.
Unemployment numbers for December will be released by the state in January.
The year started with calls on President Donald Trump to intervene on behalf of a group of Delphi salaried retirees fighting to have the full pensions restored ahead of a hearing before the U.S. Sixth Circuit Court of Appeals.
The group had sued the Pension Benefit Guaranty Corporation over the lost benefits as a result of Delphi’s bankruptcy more than 10 years ago. The hearing in January was an appeal of a lower Michigan court’s ruling to dismiss the lawsuit.
The U.S. court sided with the lower court, prompting more legal wrangling when the Delphi Salaried Retirees Association in October asked the Sixth Court to review its previous decision.
A few days later, President Donald Trump took executive action by directiing members of his Cabinet to report within 90 days recommendations to remedy the reduced retirement benefits that happened when the PBGC took responsibility for the pensions.
The review was to include whether the pension plan can be restored to pretermination status and bring additional transparency to the decision to terminate the plan.
A spokesman for U.S. Rep. Tim Ryan, D-Howland, a long-time advocate for the group, said the congressman would continue to push the new administration on the matter. As will Republican Mike Turner of Dayton, who also has supported the efforts of the retirees.
5. Development at the Eastwood Mall Complex
Speculation swirled in the early days of 2020 regarding which retailer would occupy the massive former Sears store at the Cafaro Company-owned Eastwood Mall. That answer was Reading, Pa.-based Boscov’s department store.
A large celebration was held to welcome the retailer that will occupy more than 180,000-square-feet and provide 300 full- and part-time jobs. Then the pandemic struck, causing construction of the new store to take a back seat. Yet, Boscov’s officials remained committed to the Eastwood Mall.
In September, the company announced it delayed the opening until October 2021, about one year off schedule, due to challenges in the consumer goods pipeline caused by the viral outbreak. Also, the retailer, known for its lavish grand opening ceremonies, wanted to put its best foot forward when it does open.
“You only get one chance to introduce a new store the right way,” said Jim Boscov, chairman and CEO of Boscov’s.
In October, the much-anticipated Eastwood Event Centre opened with just less than 16,000 square feet of meeting space for trade and corporate conferences, parties of all sorts, wedding receptions, social galas, and cocktail and fundraising events.
It was built with all the bells and whistles with the latest high-tech internet, audio and visual equipment, including drop down screens and projectors. The interior is crisp and clean, designed with functionality in mind — pretty much a blank canvas for users to decorate, if needed, as they wish.
The rooms — Ritz 1 and 2, Packard, Idora, Warner and Buhl — all pay homage to the rich history of the Mahoning and Shenango valleys.
Other business development, meanwhile, remain in the works.
A Meijer store planned for the former Super Kmart at Howland Commons remains “very much alive,” said Joe Bell, spokesman for complex owner, the Cafaro Company. Particulars of the deal are being negotiated, but details can’t be made public, he said.
Bell said he’s confident Meijer will build the planned 160,000-square-foot store.
“We are very hopeful it will come to fruition the way we would like it to,” said Bell.
Earlier this year Bell said Meijer decided to “slow walk” the project after the closing of the General Motors plant in Lordstown, but Cafaro Company officials stayed in close contact to allay the companies fears that the area was not a good consumer market.
Enterprise Park, a medical, educational and residential campus north of the mall has all the permits needed to move forward. Bell said he expects to see more concrete engineering and ground work happen in the first half of 2021.
6. Good things in Lordstown
GM with it’s South Korean partner LG Chem is building a $2.3 billion electric vehicle battery-cell manufacturing plant that will employ upward of 1,100 people. It’s called Ultium Cells LLC.
The site adjacent to GM’s former assembly plant was announced in January with plans to start production in 2022.
Off-priced home fashion and decor retailer HomeGoods has been building a regional distribution center near Ellsworth Bailey and Hallock Young roads. Construction started in 2019, but the facility took shape in 2020.
Old Dominion Freight Line Inc. may have bought the land for a new distribution hub in 2019, but construction started this year on the multimillion dollar facility on Tod Avenue near the GM / LG Chem facility.
The trucking company’s more than 30,4000-square-foot facility has about 60 docks, fuel islands and other equipment it needs to operate. Old Dominion already has a facility on North State Street in Girard, but the property is landlocked, eliminating the possibility for expansion.
Meanwhile, Chattanooga, Tenn.-based M&M Industries Inc., which makes plastic pails and packaging, acquired the former Magna Seating Systems, an 81,000-square-foot facility at 1702 Henn Parkway with plans to start production at a facility sometime in mid-2021.
7. GM clawback
Way back in 2008, the state awarded GM job creation and retention tax credits worth millions to help the automaker retool its Lordstown assembly plant to start manufacturing the second-generation Chevrolet Cruze.
The job retention credit agreement required GM to stay operating there through 2028. The job creation credit required it to stay through 2037.
It didn’t happen. The automaker shut down the plant in March 2019. In doing so, it broke the agreements, so in March of this year, the state put GM on notice — we want the $60.3 million back.
Several months later in September, the Ohio Tax Credit Authority finally voted to order GM to refund the state $28 million and invest $12 million in the Mahoning Valley in education and training, community programs and / or infrastructure.
Some, including Ohio Attorney General Dave Yost, wanted GM to repay every penny. Other talks involving GM, Gov. Mike DeWine and Lt. Gov. Jon Husted happened, but were less about recouping the money and more about GM making further investments in Ohio.
Lydia Mihalik, Ohio’s director of development and chair of the tax credit authority, said in September the tax credit authority’s decision “protects taxpayer dollars, while also allowing for continued investment in the local community.”
GM has till Dec. 31, 2022, to make the payments.
8. St. Joes on the go?
Mercy Health-Youngstown announced in October plans to develop nearly 63 acres adjacent to Kent State University at Trumbull into a health care campus that may include relocating St. Joseph Warren Hospital.
The KSU board of trustees OK’d the purchase in September. The sale has not been finalized, but it’s safe to assume, according to the health care provider, that Mercy Health has a strong intention to develop the site immediately east of KSU’s regional campus.
Ohio lawmakers must approve the sale.
As part of the sale, the partnership with Mercy Health and KSU will expand a new practicum, and clinical and internship opportunities for KSU students.
9. So long stork
Trumbull Regional Medical Center announced earlier this month it will close its maternity ward Dec. 31. The decision, according to the health care provider, was based on demand.
“Despite our best efforts, patient demand has remained low, and Trumbull’s maternity ward remains significantly underutilized — a trend that began even prior to Steward taking ownership of the hospital. Trumbull’s maternity ward covers less than 15 percent of the babies delivered in the region annually,” a hospital spokesman said in a statement.
10. Out with the old, in with the new
Two buildings with ties to the Mahoning Valley’s rich histories of auto and steel industries were sold.
In April, Harvest Point Church in Lordstown purchased the former United Auto Workers Local 1714 union hall on Salt Springs Road from UAW Local 1112, which had assumed control of the property when the two locals merged in 2017.
The deal was $400,000 and included about 6 acres of land of the 42 owned by Local 1112 at the site.
In October, the former northern California-based New 999 Pine LLC bought the office building for the former Republic Steel on Pine Avenue SE for $750,000. The company has ties to a company that manufactures equipment and material for the flexible packaging industry.