$21 million in aid to businesses OK'd Legislators approve use of 'Sunny Day' funds for 9 projects

September 05, 1996|By Michael Dresser | Michael Dresser,SUN STAFF

On a cloudy day in Annapolis, the sun shone brightly on the Glendening administration's economic development strategy yesterday as lawmakers gave their blessing to nine projects worth a combined $21 million.

The projects approved by the General Assembly's Legislative Policy Committee include an $11.5 million "welcome mat" for Northrop Grumman Corp., which acquired Westinghouse Corp.'s Linthicum-based electronic systems division in January.

The committee, which reviews grants and loans from the state's "Sunny Day" fund, gave its OK to the Northrop Grumman project after the Assembly's chief legislative auditor called it "a classic illustration" of how the fund was intended to be used.

William S. Ratchford II, director of the Assembly's Department of Fiscal Services, said the package of loans and grants would leverage about $12 in private investment for each dollar in private funds.

The Northrop Grumman project is the largest ever funded under the state's Sunny Day fund, which was set up under the Schaefer administration to let the state offer incentives to companies to do business here.

The Fiscal Services Department estimated that if all the goals under the project are reached, the investment would help stem the hemorrhage of jobs at the former Westinghouse facilities and create 1,500 jobs in addition to Northrop Grumman's current work force of 7,282 in Maryland.

"This is no potato chip factory," Republican Sen. John A. Cade of Anne Arundel County said in a good-natured gibe at Sen. Walter M. Baker, a Cecil County Democrat. The Senate Republican leader was referring to a $15 million tax break adopted in order to keep Frito-Lay doing business in Baker's corner of the state.

Ratchford urged legislators to approve the financing with the condition that Northrop Grumman retain a "meaningful" presence in Maryland. But Cade successfully moved that the package be approved without strings as "a gesture of good faith and goodwill" toward Northrop Grumman.

Legislators granted $1 million in financing for STX-William T. Burnett Inc. over Ratchford's recommendation that it be TTC rejected. The manufacturer of foam products and lacrosse equipment was seeking assistance to renovate its facility at 1500 Bush Street in a Baltimore empowerment zone.

Ratchford said the investment is expected to create only 15 new jobs and that the company would match the state's investment with only about $1.2 million of its own money -- far short of the 5-1 private-to-public money ratio in the Assembly's own guidelines.

But legislators accepted arguments from James T. Brady, secretary of business and economic development, that STX was the "anchor company" of the economically distressed area. Brady also cited the company's "long and storied history" in the lacrosse equipment industry and noted that the Assembly's guidelines don't officially take effect until Oct. 1.

Other financing approved by the committee included $2.7 million for Staples Office Supply for a Hagerstown distribution center; $1.5 million for Canam Steel to expand its steel products plant in Point of Rocks; and $600,000 to Johns Hopkins Health Systems' Dome Corp. for a genetic therapy research center in East Baltimore.

Other payouts approved were $1 million for Filtronic Comtek to expand its cellular telephone component plant near Salisbury; $1.5 million to Metro Center Inc. to help renovate a building in Hyattsville to house the Federal Emergency Management Administration; $750,000 to help Principal Health Care Inc. consolidate its operations in Montgomery County; and a $500,000 contribution to a revolving loan fund to encourage economic growth in the Lower Eastern Shore.

Pub Date: 9/05/96

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