States expected to flood Boeing with 7E7 bids Thursday, June 19, 2003 By PAUL NYHAN AND CHARLES POPE SEATTLE POST-INTELLIGENCER REPORTERS
States will blanket The Boeing Co. with proposals tomorrow -- everything from $100 million in tax breaks in Palmdale, Calif., to decades of tax abatements in Michigan -- in the battle for the next U.S. manufacturing prize: the 7E7 jet. Tomorrow is the deadline for any town, city or state to file proposals for Boeing's proposed 7E7 final assembly plant. While the process is clouded in secrecy, lawmakers are compiling perks to win the prestige and thousands of jobs that will accompany the project. "It's very difficult for governors and mayors to resist playing the game," said William Schweke, research director at the Corp. for Enterprise Development. Washington wasn't shy about playing, publicizing much of its offer last week when state lawmakers approved billions of dollars in Boeing-related tax breaks, unemployment system reforms and other perks. "We're trying to anticipate what the other states might offer -- what they (other states) have typically offered, whether it's a Mercedes-Benz plant or a Toyota plant," Gov. Gary Locke said yesterday after signing into a law a package that could save Boeing and its Washington contractors a projected $3.2 billion over 20 years. Now, the rest of the nation gets a crack at the nation's largest commercial aircraft maker. Michigan, for example, will try to boost its chances by proposing three sites and enticing Boeing with its existing menu of tax breaks. The state can abate state business taxes for 20 years, while local communities can roll back taxes for 12 years, according Jennifer Owens, a spokeswoman for the Michigan Economic Development Corp. Two thousand miles away in Palmdale, Calif., the region highlighted its tax breaks -- enterprise zones and foreign trade assistance -- a former Boeing facility and a near-perfect flying weather. In fact, California is investigating a range of incentives that could alleviate utility costs and help employee training, according to Jason Kimbrough, a spokesman for California Technology, Trade and Commerce Agency. Tomorrow, California may offer Boeing at least the widest range of options, with as many as 10 communities, including Long Beach and Palmdale, interested in assembling the 7E7. But California and Michigan offered only a sample of what will be roughly 35 proposals. Most states declined to discuss anything they might use to lure Boeing. The entire process is designed to be confidential, with some of Washington's biggest potential rivals, Georgia, Alabama and South Carolina saying little or nothing about the competition. Regions will file their proposals with Boeing's consultant, South Carolina-based McCallum Sweeney, which is expected to quickly narrow the list down to several serious contenders. Boeing's 7E7 site-selection team will perform a thorough analysis of each. A decision will be made before the end of the year. What local officials are not discussing may be the most interesting. They could decide to tuck juicy incentives into their offers. Or the sweetest offers may not come until well after tomorrow's deadline. In Fort Worth, Texas, officials are discussing incentives, but the debate will intensify if Boeing selects the city as a finalist, according to Bob Farley, one of the authors of Fort Worth's proposal and executive vice president at the Fort Worth Chamber Commerce. Current and future incentives, however, are only so useful as bait. "Our priority is to make sure the process is fair and rigorous, " said Boeing spokeswoman Mary Hanson. "The proposals are going to be weighed against all criteria," In May, the company outlined that criteria, such as a 24-hour port, which appeared to place Fort Worth and other candidates at a disadvantage. The absence of deep water, though, didn't discourage Fort Worth lawmakers. Members of Congress from the area sent a letter to Boeing last month all but begging the company to build the plane there. The city is considered a serious candidate because it was one of the finalists for Boeing's corporate headquarters. In the letter, Texas lawmakers highlighted the area's central location and its existing network of aviation companies. Despite expressing confidence in their offer, Texas officials remain concerned. The biggest concern, they say, is Fort Worth's distance from a seaport. Houston is the closest at 270 miles and Corpus Christi is 400 miles. Texas lawmakers and economic development officials have been struggling in the final days to find a way to minimize that deficiency, said two officials who asked not to be identified. They are not alone. One California official wondered how the state could match Washington's billions of dollars in promised aid. "Clearly it's impressive what Washington has been able to come up with. Given California's fiscal crisis it is going to be a challenge to come up with something like" what its offered the official, who requested anonymity said. The stakes -- the factory will employ 800 to 1,200 workers and support far more workers at suppliers -- has attracted the rapt attention of those with access to the most cash, state delegations in Congress. Lawmakers from Washington, Texas and California have been helping to craft proposals. They have worked the phones with federal officials, searching for anything that can be pried loose from the government that will make their state more appealing to Boeing. Lobbyists say that lawmakers from Alabama, Georgia and North Carolina are also at work, albeit more quietly. Yesterday, nearly the entire Washington delegation took part in a conference call with Gov. Locke to review the state's package one last time. If the state was to have any chance at landing the 7E7, "I told them we have to give a major (state) tax incentive package to Boeing," Locke said, recounting his discussion with local lawmakers. "We're afraid that if the 7E7 goes to another state the successor of the 747 or the 737 could go to other states too." Lawmakers have other concerns. An aide to Locke said that one nagging worry is the ability of citizens to launch voter initiatives to reverse legislative decisions. "We're not privy to their proposals but we do know that some states can actually build the factory for them. Some states can give them free land," Locke said at the signing ceremony earlier in the day. Boeing commercial aircraft chief Alan Mulally praised the state's recent actions. "I have been very encouraged and supportive of our state's action and leadership to move forward on making the state of Washington more competitive," Mulally said. Mulally also confirmed for the first time that Boeing is interested in Moses Lake as a final assembly site. But he did make it clear that factors not in the site-selection criteria have to be considered. And that could hurt Washington's chances. "In this kind of business, you want flexibility," Mulally said in an interview on his last day at the Paris Air Show. "You don't want one thing to stop your whole business." He was also asked about something that is in the criteria -- natural disasters such as earthquakes -- and how that might play in deciding whether to spread out Boeing's airplane production. "The entire time I've been at Boeing, that has always been a concern," Whatever state wins Boeing's 7E7 factory, the competition has already made clear plenty of regions outside Seattle lay claim to the multinational corporation. "This is a Boeing city just the same as Seattle is," said Beverly O'Neill, mayor of Long Beach. MAKING A PITCH Plenty of states are interested in the final assembly 7E7 jet plant, including: California: The state plans to submit a collection of bids, including offers from Long Beach and Palmdale. Fresno is another candidate, according to The Fresno Bee, and Victorville is also interested, the city's local paper, the Daily Press reported. Texas: The state is also expected to file a group of bids, including proposals from Fort Worth and Brownsville. Other sites include El Paso, Houston, Harlingen and San Antonio, The Associated Press reported earlier this month. Michigan: The state will offer three sites. Sawyer International Airport and Willow Run Airport are both candidates, according to AP. Georgia: Gov. Sonny Perdue announced the state will make a bid for the factory, The Augusta Chronicle said. Ohio: Dayton, Toledo, Columbus and Youngstown-Warren are all potential sites, AP says. Arkansas: The state will propose four sites in three regions. Little Rock, Fort Smith, Blytheville and another site in northwest Arkansas are reportedly seeking the work, AP reported. Alabama is also developing a bid, AP reported. Illinois is preparing a proposal, according to the Chicago-Sun Times New Jersey: The southern New Jersey city of Millville is also making a bid for the plant, AP reported. Oklahoma North Carolina South Carolina Arizona
