Who Pays Taxes In County Business

COMMENT

January 30, 1994|By MIKE BURNS

With Harford County's attention focused on the financial difficulties of Merry-Go-Round Enterprises, the national youth clothing chain headquartered in Joppa, you might be surprised to learn that it was not even the top Harford taxpayer among clothing retailers last year.

That distinction went to The Gap, the San Francisco-based TC chain, which has a major distribution center in Edgewood. It paid $1.2 million in personal property and real estate taxes in 1992-93.

But its employment impact, about 100 workers, is much less than Merry-Go-Round, which has 1,100 employees in its distribution center and corporate headquarters. So '* Merry-Go-Round makes its presence much more strongly felt in the economic ripple effect throughout the local economy.

The other major reason for Merry-Go-Round's local impact is that Harford officials have bet on the future success of that enterprise, which is now in bankruptcy court.

The county gave it a very large real estate tax break for five years to relocate from Towson to Joppa.

How big a tax break? Well, county treasurer James Jewell says it will be worth $750,000 this year, as the economic development incentive expired last month.

That's more than double the $500,000 that Merry-Go-Round paid on equipment and such at the complex last year.

Utilities were the top taxpayers in Harford in the 1992-93 fiscal year, as usual.

Baltimore Gas & Electric Co. paid more than $3.25 million, followed by Chesapeake & Potomac Telephone Co. with $1.4 million in corporate taxes and Susquehanna Power Co. with a $1.4 million tax bill.

After The Gap was another utility, MCI Communications, which paid out $937,000 on its regional long-distance telephone switching station in Creswell.

There's another delayed reaction, a financial aftershock, that will bolster the county coffers. The $100 million data storage center there opened a year ago, but the equipment is not taxable until the fiscal year that begins this July, according to the normal rules for assessing corporate taxes.

Harford has been fortunate in winning the attentions of Fortune 500 companies with major distribution needs.

The attractions of affordable large tracts of land and convenient access to major interstates, railroads and the Port of Baltimore has made this a haven for regional warehouses.

And from what we hear, there's an even bigger name on Harford's horizon.

Merry-Go-Round's pony-tailed leader, Boogie Weinglass, the would-be pro sports magnate and "Diner" crowd celebrity, could soon be upstaged in Harford by a wascally wittle gway wabbit.

Bugs Bunny and his Looney Tunes pals are seriously looking at three Harford sites for a merchandise distribution center featuring clothing and memorabilia from the Warner Brothers movie repertoire.

It would be the first East Coast center for the moviemaker's retail operations, which now include more than 60 outlets in the United States and Europe; 50 more are planned to open this year.

Potential sites for the $23 million center include properties in Belcamp, Perryman and Aberdeen.

Not coincidentally, those sites are close to other large corporations that make Harford County home for the same reason, such as Frito-Lay, Clorox and Mercedes-Benz.

"The fact that other major distributors are here provides a certain comfort level," admitted J. Richard Latini, an executive with the Baltimore real estate firm representing Warner Brothers.

Harford's relatively lower costs of commercial real estate are also a consideration, he suggested.

Warner Brothers Worldwide Retail, a 2-year-old effort to challenge rival movie-merchandiser Walt Disney Co., ships all its merchandise from a single Los Angeles center to the East Coast and overseas.

The nearest Warner Brothers retail store is in Rockville.

Harford's success with distribution centers and the like has been tempered by the limited attraction of job-intensive manufacturing processing firms to the county.

Some grumble that the county is promoting less-intensive use for its supply of prime commercial/industrial land that may soon be depleted. But in the current economy, you have to sell what you have and hope for the best.

Harford made a serious, concerted pitch for the Coca-Cola syrup-making plant that finally landed in Howard County, next to the bottling plant there. So the county is prepared to go after production plants when it has the chance.

That's why there was angst over developments at the new Clorox facility, when the production end was delayed while the building was used for distribution only.

That concern was compounded with Frito-Lay's postponed plans for using its new Aberdeen facility: Harford wanted snack production jobs, not just automated warehousing space.

So the million-square-foot headquarters and distribution center of Merry-Go-Round in Joppa represents more than just a real estate tax source.

It represents nearly 1,100 jobs as Harford's second largest private employer.

No, The Gap's not first.

That honor belongs to the Upper Chesapeake Health System, operator of the county's two hospitals.

Mike Burns is The Baltimore Sun's editorial writer in Harford County.

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