State funds OK'd to woo corporation Md. wants to attract General Dynamics


Maryland legislative leaders gave their approval yesterday for the transfer of up to $2.5 million from one state fund to another so that the money can be used by Gov. William Donald Schaefer and economic development officials in their efforts to attract General Dynamics Corp.'s new corporate headquarters.

In asking the General Assembly to transfer the monies from the Maryland Industrial Land Act to the state's so-called "Sunny Day Fund," J. Randall Evans, secretary of economic and employment development (DEED), told lawmakers that the funds could be helpful in persuading the nation's second-largest defense contractor to move to the Maryland suburbs of Washington.

General Dynamics, with sales of more than $10 billion last year, said late week that it would relocate it headquarters to the Washington area from St. Louis.

Although DEED officials were reluctant to say that the funds would be used in the state's very competitive battle with Virginia to woo General Dynamics, Deputy DEED Secretary Michael Lofton said yesterday that "certainly General Dynamics is a potential" beneficiary.

Mr. Lofton said that no deal has been cut with General Dynamics, but the department wants the money so that will have the flexibility to negotiate with the defense contractor from a position of strength.

Under provisions of the Sunny Day Fund, Mr. Lofton said, the state would have "virtually unlimited flexibility to respond to whatever a company requires."

For example, the funds could be used to build roads, to buy land or to help finance a move.

He said that under the Maryland Industrial Land Act, funds could only be transferred to local governments and used for land and building development.

"If we can provide some small benefit or token of our esteem to make the people from General Dynamics relocate within our borders, these will be monies well spent," the president of the Senate, Thomas V. Mike Miller Jr., D-Prince George's, said.

Mr. Miller said that it was his understanding that Mr. Evans and the governor "would like to have the money and to hold it like a trump card to be played at the appropriate time."

Delegate Charles J. Ryan, D-Prince George's and chairman of the House Appropriations Committee, said that the legislature wants the governor to have the "ability to negotiate and aggressively pursue General Dynamics."

"We want to let them know that we want them here," he said.

The transfer of the funds is being addressed as part of budget- balancing legislation that is being considered by a special session of the General Assembly.

The appropriate House and Senate committees approved the fund transfer yesterday. The panel votes were unanimous.

Mr. Miller predicted that the measure would have full legislative approval today.

The Sunny Day Fund was established by the legislature five years ago to give state officials a tool in competing for economic development projects.

Pennsylvania used a similar fund to lure a new Eastman Kodak Co. pharmaceutical division to the Philadelphia area. The

company also considered locating in


Governor Schaefer was scheduled to host a dinner at the State House last night for top executives of General Dynamics.

"We're in real competition with Virginia," Mr. Lofton said. "I' surprised that we are getting as close a look as we are getting.

"At one time we thought they wanted to be nestled in close to the Pentagon [in Arlington], but now I think we have a real shot at them."

State officials feel that if they are successful in landing General Dynamics it will send a clear message around the world that Maryland is a good site for corporate headquarters and could lure other companies to the region.

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