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Past is prologue as Md. woos Northrop Grumman

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Valentine’s Day has come and gone, but Maryland sure seems intent on making a love connection of an economic development sort.

And its courtship strategy looks like it hasn’t changed much in 10 years. (I know what you’re thinking: We’re really exploring the romance theme a lot here at the blog lately, huh?)

News of state efforts to woo Northrop Grumman Corp. trickled out last week. Gov. Martin O’Malley, General Assembly leaders and state economic development Secretary Christian Johansson have put the Free State’s best foot forward in hopes of landing the California defense contracting giant’s corporate headquarters.

The promise of 300 or so high-paying jobs — and the knowledge that Northern Virginia and Washington, D.C., are furiously vying for a spot atop Northrop’s corporate letterhead — have Maryland pitching four sites, according to The Daily Record’s man in Annapolis, Nick Sohr.

It all reminds me of another May-December romance, way back in 1999. That was the year Maryland pulled together an incentives package worth up to $44 million to keep Marriott International in Bethesda.

The hotel giant was threatening to pull up stakes and move to Tyson’s Corner. CEO J.W. “Bill” Marriott Jr. was so unhappy with Maryland’s business climate, in fact, that he’d thrown his support in the 1998 governor’s race behind Republican challenger Ellen Sauerbrey.

With that as the backdrop, Marriott International’s executive team and then Gov. Parris Glendening and his top advisers — economic development secretary Richard C. Mike Lewin and David Edgerley, director of the Montgomery County Department of Economic Development among them — hammered out the deal during the legislative session.

General Assembly leaders said the combination of grants and tax breaks — at the time the most ever offered a company to stay in Maryland or relocate here — was critical to keeping a Fortune 500 firm, a generous corporate citizen and about 3,500 jobs in Montgomery County.

And at a State House press conference to unveil the deal in March 1999, a smiling Marriott declared that all was forgiven.

“As far as we’re concerned, the playing field has been leveled,” he said while pledging to “personally commit my time to endorse Maryland as a great place to work, to live and to put your business.”

Marriott, sitting in his office, told me the same thing for a story I wrote for the Montgomery Business Gazette. He insisted the company was ready to pull up stakes, but “leveling the playing field” — and doing everything possible to protect shareholder interests — was what kept the Marriott name in Maryland.

Grumblings about corporate welfare, however, persisted throughout the negotiations. Legislative leaders expressed their distaste for the process — off the record, of course. And Marriott’s standing with lawmakers wasn’t helped later that month when The Sun reported on company memos that suggested Marriott intended to stay in Maryland all along. Company executives vehemently denied the charge that they didn’t bargain in good faith.

There are some distinct differences between the Marriott deal and the Northrop pitch, of course. The tech bubble was still inflating in 1999, and state coffers were flush with capital gains taxes and other healthy revenue streams. Today, not so much. There was decidedly more pressure on Maryland to keep from losing a corporate darling to a neighboring state than there is on landing Northrop. And there’s a wide disparity in the number of total jobs at stake.

It’s interesting to note the identity of the company that had received the largest package of state and local economic incentives from Maryland’s Sunny Day Fund prior to Marriott in 1999: Northrop Grumman, which The Sun reported received more than $14 million in 1997.

So tell us, and tell state lawmakers, what you think: Can a whiff of corporate welfare take the romance out of a courtship?

Category: Economy, government, marketing, Martin O'Malley, maryland

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