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Martha Choe to help navigate 7E7 project

By Luke Timmerman
Seattle Times business reporter

	GREG GILBERT / THE SEATTLE TIMES Martha Choe, who helped develop the state's proposal for Boeing's 7E7 project, was named the new state coordinator for the project yesterday by Gov. Gary Locke.
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State economic-development director Martha Choe and her deputy, Robin Pollard, two members of the team that developed the proposal to attract Boeing's 7E7 next generation jet to Washington, were given a new assignment yesterday by Gov. Gary Locke: They're going to work full time to implement the contract for the project through the permitting, construction and worker-training phases.

Choe said her 7E7 post is temporary until May, and she will work at her current salary rate, which is $106,000 a year. Locke named Juli Wilkerson as Choe's replacement as state economic-development director. Pollard is staying on the 7E7 job permanently, and is working at her salary of $75,000 for now.

The arrangement was one of many items in the contract between the company and the state that have raised some eyebrows in Olympia.

Locke said a portion of the document was publicly disclosed when it was signed last month. Many of the details in the lengthy contract, however, were blacked out to protect the company's proprietary interests, he said. But, Locke said, many assertions about the contract were "absolutely wrong" and that he and his staff operated "to protect the best interests of the state of Washington."

Choe defended the contract from criticism ignited by the Evergreen Freedom Foundation, a conservative budget-watchdog group that requested details of the contract, characterized them as special giveaways, and released them to the media.

"We are not making concessions to Boeing or bending any regulations. Boeing has to pass muster on all requirements and laws," she said.

Most of the Boeing incentive package passed the Legislature and received Locke's signature last year. The most significant item left for the Legislature to approve is the construction and operation of an aerospace-worker training center — at a combined cost of as much as $24 million in state and federal money over the next several years. That is in addition to the $3.2 billion, 20-year tax break, transportation improvements and cost-savings to the company on unemployment and workers' compensation the Legislature and Locke approved last year.

Some 7E7 sweeteners Construction of an aerospace-employee training center $10 million. The money would come in $6 million in federal grants that the state Legislature has control over in 2004, a $3 million federal grant the state is pursuing and a $1 million grant the state will seek from an existing economic-revitalization fund. Operation of the training center $12 million to $14 million. About $8.3 million of it paid for from three federally originated pots of money the governor has discretionary control over, plus $4 million to $6 million the governor will seek from the state Legislature in the 2005 to 2007 budget. Reimbursement to the Department of Community Trade and Economic Development for an economic-impact study it paid for last year, the department's formation of the state's 7E7 proposal and ongoing salaries of two top officials to implement the plan this year: $615,000. The full amount is being sought from the state Legislature in 2004. Source, Department of Community Trade and Economic Development

But other details of the contract include:

• The state's hiring of two new coordinators, Choe and Pollard, and its designation of five other state employees to navigate its ongoing needs to handle environmental permitting, taxes and incentives, work-force development, transportation and Everett facilities.

• Another coordinator specified to respond to the company's need for 747 cargo freighters to fly parts to the factory. But Choe said the company recently decided it should handle that in-house. Choe maintained that the state will not finance or operate the freighters for Boeing, and that a contract section calling for $5 million in state money to facilitate the freighter project is no longer valid.

• The company receiving expedited permits and assistance from the city of Everett. The 7E7 project permits will also get priority status over all other project permits received after "to the extent not prohibited by law."

• The Port of Everett, at Boeing's request, expediting and paying for an estimated $34 million in improvements, including dredging.

• Boeing having the right to operate 7E7 tests 24 hours a day, seven days a week as long as it obeys existing noise-abatement laws.

Jim Bruce, president of Business Facility Planning Consultants, a national site-selection consultant in Atlanta, said many states regularly use ombudsmen to help businesses navigate regulations. For example, Nissan has had some consultation with Mississippi on choosing the ombudsmen for its manufacturing plants there. He said companies want to be sure they're getting a "qualified professional" to handle their permits, because once a decision to build a plant has been made, speed is usually of the essence.

Carolyn Logue, a lobbyist for the National Federation of Independent Business, a small-business group, balked at some of the contract's provisions. She said other large firms are bound to ask for similar deals. "If you want Boeing to stay in the state, and I do, you want to know they stayed because of the business climate, not because of special favors."

Paul Roberts, former planning director for Everett and now executive director for Snohomish County, said the 60-day permit times are nothing different from what the city does for other businesses.

"Based on our southwest Everett work, we already do that," he said. "We're committing to do the stuff we've already done."

However, one new item that is still being worked out between Everett and Boeing is a recalculation of the way the city administers its business-and-occupation tax. Originally, the tax was calculated using a three-tier system that factored in the number of employees, production levels and manufacturing materials. Under a proposal still pending before the City Council, the B&O tax for Boeing's 7E7 production would be calculated using a flat formula — 1 percent for every $6 billion in sales, with 0.25 percent for sales thereafter.

Mary Hanson, a Boeing spokeswoman, confirmed that the company, on its own, will handle the cargo freighters to supply the 7E7. She would not comment on how much weight was placed on any specific element of the contract in influencing Boeing's decision to build the 7E7 in Everett.

"This was not about states writing a big check, it was based on the state's proposal, the infrastructure that's here and the quality work force," she said.

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com. Reporter Jane Hodges contributed to this report.

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