The Delaware Planning Commission unanimously voted on Wednesday to recommend approval of a preliminary development plan for Ohio Steel Industries, Inc. to expand its footprint to Delaware while also repurposing a building that was vacated by its previous owner.

Located at 100 Colomet Drive, the existing 36,222-square-foot industrial building sits on 11.32 acres and was previously occupied by Chroma Color before the company moved its operation out of state in October and listed the building for sale. Ohio Steel Industries has since entered into an option-to-purchase agreement and is proposing a two-phase expansion project for the site to house its plastic pipe and custom plastics extrusion products manufacturing division.

Phase one would include a new rail spur to access the existing railroad track on the northern boundary of the site, as well as a new gravel area for outdoor storage, new silos, and site work for future expansion. Phase two would include an addition to the existing building and/or the construction of a new building.

During Wednesday’s meeting, Economic Development Director Sean Hughes said the project is “a huge net positive win for the city” with regard to its potential economic development impact. In a memo to Planning and Community Development Director Dave Efland, Hughes noted the older building, which was constructed in 1992, had not garnered much interest prior to Ohio Steel’s inquiries.

“It was a surprise to us that Chroma Color was leaving,” Hughes told the commission. “We were notified last summer that they were leaving the city. We kind of had an idea it was going to happen eventually. They started scaling their workforce back. But they told us that, by the end of the year, they would be gone. … That left my team scratching their heads about this building. This is a classic case of reutilization of a very old building, specialized industrial building, something an economic officer never wants to deal with.”

Hughes added, “To have (Ohio Steel President) Mr. (Doug) Hill come along … (the building) does have a lot of challenges. He’s going to be spending $8.25 million on this project, and that’s not including future phases. That’s just to occupy the building as it is now. You could, at least maybe prepandemic, build a building of that size for that amount. So it’s a significant investment in an aging, historical industrial building. I’m thankful that we actually found a company so quickly to occupy something that could have been a much larger headache for the city.”

Ohio Steel has already started hiring some of the Chroma Color employees left jobless by the company’s move, according to Hughes, and if the Delaware expansion is ultimately approved, the company has committed to hiring 52 full-time-equivalent employees, including many of the former Chroma Color employees in Delaware.

Ohio Steel has also committed to creating $2.6 million in payroll that would generate $48,100 in new income taxes for the city, Hughes said in the memo to Efland.

To add to the allure of the site for Ohio Steel and to assist with the cost of updating the building, Hughes and his department would present the company with a Performance-Based Economic Incentive Grant, which would pay them the equivalent of 20% of their city of Delaware payroll taxes for five years.

The city would also need to grant Ohio Steel with some flexibility regarding its tree removal and replacement policy. A large stand of trees currently exists on the site, south of the existing building. Hill said utilizing at least part of that portion of the site for additional storage is the only way to make the site and proposed project feasible for his company.

A strict application of the city’s tree preservation regulations, as defined in chapter 1168 of its code of ordinances, would result in a required payment of $811,438 by Ohio Steel to the city’s Tree Fund for the removed trees. However, Ohio Steel has indicated it cannot absorb that cost and still justify investing in the site.

As a result, the city is considering granting flexibility to the company which would ultimately result in a payment of $294,321. As part of the economic incentive package, the Economic Development Department would make half of that payment with the other half being paid by Ohio Steel over a set period of time.

Hill indicated the company is not looking to remove the entire cluster of trees on the southern portion of the site, and he also intends to plant trees elsewhere, he said.

“Our goal is to take down as few trees as possible,” Hill said during the meeting. “We’re probably going to plant some along the front, and we have PPG to the south that is manufacturing paint products, so we would love a buffer between us as much as possible. But I need to have the flexibility to get into that area.”

The proposal will be given a first reading by the Delaware City Council at its next meeting, which is scheduled for Monday, March 6.

Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.