BGE-Pepco merger welcomed New headquarters promises money, jobs

September 28, 1995|By Ellen Gamerman | Ellen Gamerman,SUN STAFF

Sorry, Baltimore, but Annapolis couldn't be happier at your bad news. This week's announcement that the city will be home to a new mega-utility created by a merger of Baltimore Gas and Electric Co. and Potomac Electriccer of the Anne Arundel Economic Development Corp. "It's quite a prize."

In Baltimore, BGE's departure is being viewed as another example of the exodus of businesses from downtown. Just the opposite is true for Annapolis, where local business leaders say the move will bring more jobs, money and prestige to the city.

"Annapolis is really known as a place for tourism and government, and that's one reason why this is such a great opportunity for the city," said Richard P. Clinch, a program manager at the Maryland Business Research Partnership.

Mr. Clinch said he was surprised that Annapolis won out over communities such as Columbia that are well-known for sparkling business parks and policies friendly to corporations.

Of all the kinds of new ventures to attract, a major utility company's central office is one of the best, business analysts say.

First, it is a headquarters, a nonpolluting enterprise to be staffed by 100 to 200 white-collar workers with expertise and influence. Second, it is a utility, the kind of business that traditionally supports cultural activities and local outreach programs.

Meanwhile, Mr. Clinch said, Annapolis can count on two to three support jobs locally for every position filled at the new headquarters.

"Every job has a multiplier effect," he said. "You'll bring jobs to the restaurants, the gas stations, the sushi bars, the oyster houses. These utility workers will have high incomes, and they will all have expense accounts."

The city didn't have to lobby for the new business. The chairmen of Baltimore-based BGE and Washington-based Pepco said they picked Annapolis because they needed a centrally located site with no ties to either company.

Now that the decision has been made, Annapolis business and political leaders are eager to make sure the companies don't change their minds. The day after the merger was announced, Mayor Alfred A. Hopkins called BGE Chairman Christian H. Poindexter, who will be chief executive officer of the new entity, and asked what the city could do to make BGE and Pepco happy.

"I told him to let me know if there's anything I can do to assist and [that] I would do anything, render any service that is needed to aid them and offer any help," Mr. Hopkins said. He said he even told Mr. Poindexter, a Naval Academy graduate, that he was a "first-class person, like all the academy graduates."

The new utility is not expected to move to Annapolis until 1997. BGE and Pepco will be forming a transition team in the coming weeks to look for a specific location.

The utilities have not publicly committed to any site. But BGE's real estate subsidiary, Constellation Real Estate Inc., is developing a proposal to build an office, hotel and retail complex on 28 acres owned by Anne Arundel Health Systems on Jennifer Road in Parole, just outside town.

The merger's announcement comes as the county makes fast gains in economic development.

In fiscal 1995, 90 companies moved into the county or expanded enterprises already here. That was up from 79 businesses in fiscal 1994, according to county figures. Big businesses such as UNC Inc., an Annapolis-based company that makes parts for a wide variety of commercial jetliners, give the city greater name recognition in corporate circles.

Penny Chandler, executive director of the Greater Annapolis Chamber of Commerce, said the news is well-timed. A new round of staff cuts at Westinghouse Electric Corp. and the impending closure of the Naval Surface Warfare Center in Annapolis threaten local jobs and make the pursuit of new business an even greater priority, she said.

"Our board of directors is simply thrilled," she said.

Still, it is hard for some Maryland business experts to view the choice of Annapolis as entirely good news.

"It's not going to be a needed boost for Annapolis as much as it's going to set back the city of Baltimore," said Michael Conte, director of the Regional Economic Studies program at the University of Baltimore. "It's a bittersweet blessing."

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