Lewin defends Marriott deal

Md. business secretary testifies in favor of incentives for hotelier

January 27, 1999|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

Acknowledging that some might call it "corporate welfare," the Glendening administration's top business official yesterday defended the state's plan to offer Marriott International Inc. a multi-million dollar package of tax breaks, grants and transportation improvements to stay in Maryland.

Appearing before a House committee in Annapolis, Richard C. Mike Lewin, secretary of business and economic development, said state and Montgomery County officials are "very close" to making an offer of financial incentives to keep the hotel giant from moving its Bethesda corporate headquarters to Northern Virginia.

"This will be a very large and aggressive offer, but I hope the legislature will approve it," Lewin told the House Economic Matters Committee. "It's imperative we keep them here."

Lewin did not disclose details of the offer, but lawmakers have been told that the company is seeking $51 million from the state. Marriott says it plans to decide by the end of March between competing sites in Maryland and Virginia.

As part of the state's offer, Montgomery County officials plan to introduce legislation intended to benefit Marriott that would expand and increase property and income tax credits available to certain Maryland-based businesses.

The bidding for Marriott by Maryland and Virginia drew criticism from one conservative Montgomery lawmaker, Republican Del. Richard LaVay, who likened it to bribery and extortion.

"We shouldn't have to be choosing winners and losers," he said. "We need to level the playing field."

LaVay said Maryland can do more to stem the loss of businesses by reducing taxes and regulations for all, not just cooking up deals for the few big companies that threaten to leave.

Lewin said he, too, has qualms about "corporate welfare." He said he is being approached by other Montgomery businesses that want to know what the state will offer them not to move across the Potomac River.

But Maryland cannot afford to sit out the competition among states for businesses, Lewin said. Marriott's 3,700 headquarters employees are "important to the fabric" of the county and state.

Lewin, former managing director of BT Alex. Brown Inc., delivered a spirited defense of the state's overall business climate. He contended that Maryland has been tagged with an undeserved reputation as anti-business. He noted that Maryland has the third-highest family income of all states, a highly educated and technically skilled work force, and top research facilities.

"In four years, this state has gone from No. 42 among states in job creation to 16th," Lewin said. "Last year, we were No. 5 in America in new business starts."

The economic development secretary said Maryland is lagging behind other states in the region in advertising itself to businesses. It spent less than $900,000 last year, compared with $4.5 million spent by Virginia.

Lewin said his department also would help businesses deal with environmental laws and would scrutinize all the state's regulations to seek elimination of any that aren't warranted.

Pub Date: 1/27/99

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