Bid to land Boeing deal includes juicy incentives

OLYMPIA, Wash. -- Washington's successful bid to land the new Boeing 7E7 assembly line included an array of deal-sweeteners from state and local government, including state-paid project coordinators, a new training center and help getting jumbo jets to haul in freight. The cost is up to $17 million in state and federal money, plus millions already committed for road and dock construction. The new spending requests, which go to the legislature for approval this year and next, are in addition to the $3.2 billion in tax breaks for the aerospace industry, a $4.2 billion statewide transportation program that Boeing backed, and major changes in the state-run unemployment insurance program, all approved by the legislature last year to persuade Boeing to stay.

Evergreen Freedom Foundation, a free-market public policy research organization, obtained the list of perks through public records requests. The Seattle Times published details on Wednesday.

EFF President Bob Williams, a former state lawmaker and Republican nominee for governor in 1988, said Democratic Gov. Gary Locke's administration had negotiated the deal-sweeteners in secret. The state giveaways probably violated the state constitution's bar on lending the state's credit, Williams said in an interview.

"We've always been against corporate welfare," Williams said.

Other equally deserving businesses have been left out in the cold while Locke threw goodies at Boeing, he said.

But the governor heatedly rejected that EFF had uncovered anything new. The general outline of the state's bid was released on Dec. 16, the day Boeing executives announced the state had won the national competition for the new jetliner assembly, Locke said. Copies of the actual contract were made public on Dec. 19 when the state and Boeing signed papers, he said.

"We never kept anything secret, never kept anything secret," the governor told a news conference.

The training center to prepare Boeing workers is exactly the same kind of deal that other businesses get at community colleges around the state, Locke insisted.

"Our state's business climate is so bad the governor had to cut a special, secret deal to convince Boeing to stick around," Williams said in a statement.

"The company got far more incentive than what we've heard about publicly," he said. "In the meantime, many other businesses in our state are still suffering.

"We do not fault Boeing officials for cutting the best deal they could for their company," Williams said. "But we do think the governor, and now the Legislature, should make a contract with all businesses in our state to give them a competitive business environment."

The foundation said the agreement includes:

-- The state spending a minimum of $10 million to design and build an Employment Resource Center dedicated exclusively to 7E7 work force development.

-- The state hiring a "work force development coordinator," in consultation with Boeing, who will develop a recruitment, screening and training program to help Boeing and its suppliers hire workers.

-- The Department of Transportation and the city of Everett improving roads to support employment levels of 35,000 at the Everett factory and up to 83,000 in the surrounding area through 2030, including extending HOV lanes on Interstate 5 in Everett and widening Highway 527 to five lanes for 20 blocks.

-- The Port of Everett spending $34 million to build a 27-acre facility at its south terminal capable of handling cargo transported by ship directly from Japan; such cargo now offloads in Seattle or Tacoma and then makes its way to Everett by barge.

-- Snohomish County improving runways and facilities at Paine Field to support modified 747s that will transport 7E7 parts, and building a road at least 30 feet wide between the cargo pad, Boeing's factory and its suppliers' facilities.

-- The state designating a "747 large cargo freighter coordinator" to help Boeing acquire and modify a small fleet of 747s to deliver 7E7 parts.

The widebody 7E7 will carry 200 to 250 passengers in three classes on nonstop routes of up to 9,500 miles. Boeing says the plane will travel as fast as today's planes, but use 20 percent less fuel.

Boeing has yet to announce any orders for the plane. If it decides to go ahead, production will begin in 2006, with the first flight in 2007 and entry into service in 2008.

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On the Net:

Boeing Co.: http://www.boeing.com

Evergreen Freedom Foundation: http://www.effwa.org/

Gov. Locke: http://www.governor.wa.gov/