YOUNGSTOWN — Transformation of the former Youngstown Thermal plant into a high-tech, energy-efficient producer of heating and cooling is underway, as is a complete shift in the business model behind the process.

Demolition has already begun at the site on North Avenue on the city’s North Side, the first step in what’s anticipated to be an eight- to 10-month process to rebuild, restore and equip the plant owned by Dublin, Ohio-based SOBE Thermal Energy Systems LLC.

The company, which bought the assets of the former Youngstown Thermal LLC out of receivership in December 2021, but had operated the plant for about two years before that, plans to invest at least $200 million downtown and in Lowellville, where SOBE plans a hub to collect and shred plastic and rubber tire feedstock for fuel for a new state-of-the art gasification system to produce steam in Youngstown.

“I made a commitment to be here and I demonstrated that commitment by taking a management role of the Youngstown Thermal company, and I invested money into that company before I owned it,” said Dave Ferro, CEO of SOBE.

SOBE took on the management role in June 2019, which is the same year it agreed to purchase the assets for $250,000, but it took several years to get the deal done.

The Vindicator reported in 2019 that Youngstown Thermal was placed into receivership in 2017 after the Public Utilities Commission of Ohio was informed by the company’s former CEO the business was in a financial struggle that could have caused an energy crisis in downtown. The company couldn’t ensure adequate service to its customers and was in danger of insolvency when the PUCO stepped in.

The large blow came when Youngstown Thermal lost Youngstown State University as a customer when YSU built its own steam plant. The loss of YSU as a customer exposed underlying financial problems at Youngstown Thermal.

When SOBE came on board, Ferro said there were matters that needed immediate attention — leaks in the distribution system and bypassing the existing plant.

“There were two fundamental problems with the system. The first was on the consumer side, the end user side, because the quality of the steam they were receiving was very poor in terms of pressure, in terms of temperature,” Ferro said. “It was poor because there were leaks all over the city.”

Ferro estimates the system was 30 percent efficient then. Now, its in the range of 75 percent to 80 percent efficient with the goal to reach 90 percent to 95 percent.

Once the leaks were sealed, the improvements shifted to the boiler house.

“Every valve, every instrument that works in that system was steam-related, so I had to make steam to run the plant, which is never a good thing,” Ferro said. “It’s inefficient.”

The system was disconnected and a new infrastructure was built nearby on the property with one boiler to replace three. That work included a direct connection to neighboring Domestic Uniform Rental with a return to the boiler to use the condensate made as feedwater.

The old plant, in a building built in 1947, is being torn down. The well-known stacks are expected to be demolished sometime this month.

“We’ve built the building blocks for the next phase, and that next phase is now to rebuild the facility,” Ferro said.

Two other buildings at the site will remain. One that was built in 1911 will be converted into the new boiler house with plans to have three new boilers that will operate on a synthetic gas SOBE will produce with natural gas as the secondary source.

“With our technology, instead of buying energy, I am going to make my own energy and I want to get paid to do it,” Ferro said.

That’s where the facility Lowellville comes in.

There, the plan is to collect and shred plastics and tires to feed the plant. The material will be shipped by rail to Lowellville and trucked to Youngstown, where it will be converted to gas at the plant using indirect heat — a process that is more friendly to the environment because it doesn’t produce hazardous waste and one that allows the byproducts to be collected and reused.

Ferro is quick to say the material is not burned.

“We don’t want to use the b word because we are not doing that,” he said. “We are not burning, we are converting.”

The byproducts of that process include coke, which is used in making steel, and carbon black, which can be used in tires and multiple other applications. In total, Ferro said, the technology allows for seven renewable energy revenue streams for SOBE.

SOBE has 35 customers in Youngstown, including the city-owned buildings. YSU came back to the system and the DoubleTree by Hilton downtown has a contract, Ferro said.

It’s expected SOBE will employ about 30 workers downtown and 20 to 30 in Lowellville.

“We can’t say that we have been perfect, nobody is,” Ferro said. “This transition from yesterday to today has been long, it’s not been without issues or concerns, but we have addressed every single one and have come out of it.”

The facility, having begun operations in 1895, is the oldest district heating and cooling facility in the U.S. It was designed to generate and distribute steam to heat all the businesses in downtown Youngstown using coal as its main source of fuel.

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