State, county package lured GM factory

$10 million in loans, tax aid, grants snared plant for White Marsh

`Minimal investment'

Transmission facility will also receive power bill discount


May 21, 1999|By Jay Apperson and Ted Shelsby | Jay Apperson and Ted Shelsby,SUN STAFF

Maryland and Baltimore County lured a General Motors Corp. transmission manufacturing plant to White Marsh by arranging a multimillion-dollar package of grants, loans, tax breaks, road improvements -- and even a discount on the company's power bill, officials said yesterday.

Gov. Parris N. Glendening, Baltimore County Executive C. A. Dutch Ruppersberger and a contingent of state and county officials gathered in the dust of a depleted sand and gravel quarry yesterday to bask in news of the state's first new heavy manufacturing plant in nearly three decades.

As they did, the costs to taxpayers began to emerge: At least $10 million in inducements, not including undisclosed loans that are to be offered to GM's Allison Transmission Division through the state's Sunny Day Fund.

The plant could enjoy about $500,000 in property tax breaks in each of the next five years, along with up to $800,000 in savings on reduced electrical bills through the next three years, according to estimates derived from figures provided by government and BGE officials.

Glendening insisted that the arrangement is a good deal for taxpayers.

"It's an excellent, excellent, minimal investment," Glendening said. "It's a great win for Maryland. It's a great win for the county."

The new plant would employ 420, with an annual payroll of more than $20 million, after its scheduling opening in 2001. Officials yesterday estimated the construction cost of the plant at $216 million, down from earlier estimates of $250 million.

Officials hailed Allison Transmission's decision to build a plant at the former Redland Genstar quarry as the product of a coordinated effort to attract business and find a site in keeping with Maryland's Smart Growth program.

After an international search earlier this year that focused on a handful of sites in Maryland, Allison Transmission is to break ground this summer on its 400,000-square-foot plant in White Marsh, one of Baltimore County's two designated growth areas.

The project would take advantage of easy access to Interstate 95 and other highways. With grading permits in place from the site's earlier mining use, work could begin almost immediately.

Allison Transmission is an Indianapolis-based subsidiary of General Motors. Company President Daniel M. Hancock said yesterday that Allison controls 80 percent of the world's market on automatic transmissions for buses, fire trucks, step vans and other commercial vehicles.

Allison Transmission sought a site that would allow its plant to double in size, and it likely will employ workers from GM's Broening Highway plant.

Still, that does not necessarily mean that the GM facility in Southeast Baltimore -- the city's largest manufacturing plant, with 2,800 workers -- will be closed, according to Brian Goebel, a spokesman for the assembly plant.

GM has said that its Baltimore plant, which manufactures minivans, will remain open until the end of 2000. Beyond that its future is uncertain.

Glendening said he had a telephone conversation last week with Thomas J. Davis, a GM vice president and head of the Truck Group, and was told the company has not decided what it will do with the van plant.

Search narrowed

Robert L. Hannon, Baltimore County's director of economic development, said his staff began working to recruit Allison Transmission six months ago. He said the company looked at sites in Alabama and Mexico before focusing its search on nine sites in Maryland.

The company later narrowed its search to three sites, with White Marsh eventually winning out over a site near Jessup in Howard County, Hannon said.

To cement the deal, government officials have agreed to provide: Between $8 million and $10 million to widen Philadelphia Road to five lanes from Campbell Boulevard, which leads to White Marsh Mall, to Philadelphia Road's interchange with White Marsh Boulevard.

Grants to be used for job training. Hannon said the grants total about $2 million, with $200,000 coming from the county and the rest coming from the state.

An undisclosed amount from the state's Sunny Day Fund, which is used to attract industry to Maryland. Most Sunny Day financing ranges from about $500,000 to $5 million in "direct" loans, which must be repaid, and "conditional" loans, which are forgiven if the company meets hiring goals and other incentives.

Government officials refused yesterday to say how much they plan to offer Allison Transmission from the fund. They said they will take their request to a legislative panel in late June or early July.

`Small fraction'

Richard C. Mike Lewin, secretary of the state Department of Business and Economic Development, said only that the loans "would be a very small fraction of the $14.25 million to $15.25 million" in Sunny Day Fund money the state offered earlier this year to Marriott International Inc. to keep its headquarters in Maryland.

Hannon said Allison Transmission also is eligible for a 50 percent break on Baltimore County property taxes for five years because of its participation in the state's brownfields program, which is designed to encourage rehabilitation of industrial sites no longer in use.

Genstar applied last year for participation in the Maryland Department of the Environment's voluntary cleanup program. Tests in 1997 showed parts of the property were contaminated with trichloroethylene and other chemicals, MDE documents show. Officials said yesterday that Lafarge Corp., formerly Genstar, has completed the environmental cleanup.

BGE also has offered to reduce electrical rates at the plant site by 10 percent the first year and 5 percent in the second and third years. A BGE official estimated that the plant's power bill could be anywhere from $800,000 to $4 million a year.

Pub Date: 5/21/99

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