Governor optimistic about Boeing proposal

Saturday, June 21st 2003, 12:00 am
By: News On 6

Gov. Brad Henry announced Tulsa's entry Friday into the crowded contest to build Boeing's new 7E7 ``Dreamliner'' and win 1,200 jobs, but he didn't detail the state's offer.

At least 14 states are vying for the new Boeing plant, although it will be months before the company decides whether to go ahead with the all-new mid-size jet. The bids were due Friday.

``I'm very optimistic about our proposal and the impact it will have on Boeing,'' Henry said.

A package of incentives, put together by the state Commerce Department, Tulsa Mayor Bill LaFortune and other community leaders, took weeks to assemble, the governor's news release said.

``Secretary (Kathy) Taylor and Commerce employees along with the city of Tulsa designed a dynamic presentation that not only highlights Oklahoma's key strengths to the aerospace industry, it also polishes our state's image to a high sheen,'' Henry said.

But the state faces stiff competition.

Legislators in Washington state, where Boeing has deep roots, have approved a $3.2 billion, 20-year tax break for Boeing and the aerospace industry.

Mayor Bill LaFortune confirmed Friday that part of a bid package submitted to Boeing this week includes $350 million in local incentives, the Tulsa World reported.

The money would come from a voter-approved increase in the county sales tax, the details of which are still being negotiated.

``This is the kind of opportunity that can turn this economy around in one fell swoop,'' LaFortune told the Tulsa World.

Should Boeing choose Tulsa and voters approve a tax measure, the company will get $100 million for research, development, planning, design and engineering activities associated with the 7E7 project, he said.

Boeing would also receive a $250 million, no-interest loan earmarked for start-up expenses associated with the plant construction. The company would have 11 years before it has to begin making payments on the loan and 30 years after it located here to pay off the loan, LaFortune said.

The $100 million research and development component hinges on Boeing choosing Tulsa for the assembly plant site.

The mayor said the cash incentives are just part of the overall Boeing package submitted by Oklahoma officials. The state has included incentives of its own, which LaFortune and state officials won't disclose.

Henry noted Boeing's already significant presence in Oklahoma, including 2,600 employees and the nearly $150 million paid to more than 600 vendors last year.

City leaders emphasized a Tulsa work force already highly skilled in the aerospace industry through the presence of American Airlines' maintenance base, Nordam and Lufthansa Technik.

``What we have,'' said Deputy Mayor Steve Sewell, ``other cities cannot duplicate.''

The highway system, the city's fiber optics capabilities and access to the inland Tulsa Port of Catoosa should make Tulsa an attractive candidate, he said. One of Boeing's requirements is proximity to a port capable of around-the-clock operations.

The governor, as well as city leaders, linked the effort to win Boeing with another to retain American Airlines' maintenance base in Tulsa.

Local officials have discussed calling a fall election to consider funding for both Boeing and American Airlines proposals as part of a region-wide improvement package.

The struggling airline is believed to be considering consolidation of its maintenance operations currently based in three cities including Tulsa, where it employs 8,331.

A delegation that includes Henry, LaFortune, Congressman John Sullivan, R-Okla., and University of Oklahoma President David Boren plans to visit Monday with Gerard Arpey, American's chief executive officer. Boren is a member of the airline parent's board.

They plan to discuss the future of the Tulsa base and what state, federal and local officials can do to ensure it stays, the governor's news release said.

Sewell said the city not only wants to keep American in Tulsa but would like to bring work on its flagship plane, the Boeing 737, to the local maintenance base.

Currently, the Tulsa base focuses on work on the MD-80, he said.

``We want to make sure American Airlines has every opportunity to have a significant presence here as they possibly can,'' Sewell said. ``They are a driving force behind us having aerospace as a sector.''