Gov. Parris N. Glendening scored his first economic development win yesterday, putting up $20 million in incentives and getting spice giant McCormick & Co. to choose Maryland over Pennsylvania for a 150-employee distribution center.
Mr. Glendening sought to parlay the early victory into the first step in making good on two of his key economic promises -- to reverse Maryland's reputation as an anti-business state and to use the governor's personal involvement as a weapon in economic-development struggles with aggressive neighboring states.
He also used it to underscore his intention of giving as much priority to retaining and promoting existing businesses in Maryland, which development experts say is the most certain way of creating jobs.
"The tide has changed, and Maryland is now pro-business," Mr. Glendening said in announcing the decision at a news conference in the company cafeteria at McCormick's headquarters in Sparks, Baltimore County.
The 370,000-square-foot facility will be built on a 40-acre site at Riverside Business Park in Harford County. The site has room for expansion to 600,000 square feet, and McCormick may eventually add manufacturing or processing facilities there, said Alan D. Wilson, the company's director of procurement and the coordinator of the project.
The state's incentive package consists of a $1 million grant, a $4 million interest-free loan and a $15 million taxable bond issue. The total is roughly equal to the $20 million or $21 million McCormick expects the new center to cost.
"We believe this is the biggest package Maryland has ever put together," said Marilyn Corbett, a spokeswoman for the state Department of Economic and Employment Development.
In addition, Harford County will grant a tax credit equal to 80 percent of the company's real estate taxes for the first three years after the new facility goes into operation, expected in December of this year.
The county also promised to "fast-track" its permit procedures to help McCormick meet a tight schedule for moving operations out of several Hunt Valley sites to the Riverside location, County Executive Eileen Rehrmann said.
Officials at McCormick, whose senior executives ranked among the severest critics of Maryland's business climate as recently as last summer, gave the 5-week-old Glendening administration the lion's share of the credit for their decision.
"Were it not for the governor's active role, in all likelihood our new warehouse distribution center would have been located in Pennsylvania," said H. Eugene Blattman, the company's president and chief executive officer.
Since late December, the Glendening administration has made the McCormick warehouse a priority far beyond even the immediate potential for another loss of Maryland jobs to a neighboring state.
The administration seized upon both the symbolism of one of the state's four remaining Fortune 500 industrial companies, a household name based in Maryland since 1889, and the fear that Pennsylvania's cash-rich economic development agencies would go all-out to build today's warehouse into manufacturing and other McCormick facilities later.
"This was definitely the full-court press. It was more aggressive than anything I have seen Maryland do in economic development at any time," said Andrew Georgelakos of KLNB Inc., who was McCormick's agent in the site search. He has been a commercial real estate broker for about 10 years.
The administration saw the McCormick decision as a way to announce that Maryland is just as determined to keep and develop its existing employers as it is to court new ones from outside the state.
"The most important part of economic development work is retaining the businesses you have and making them feel good about being here, because if they are happy they will be absolutely the best ambassadors you can have," said James T. Brady, Mr. Glendening's secretary-designate of economic development.
Mr. Glendening also made a point of stressing "regional cooperation," putting Ms. Rehrmann on the dais alongside Baltimore County Executive C. A. Dutch Ruppersberger.
When sites in both counties turned up on McCormick's short list, they worked together to keep the McCormick jobs in Maryland rather than against each other as Maryland localities too often have in the past, Mr. Brady said.
McCormick initially sought to consolidate its distribution operations at the former B. Green & Co. Inc., warehouse in Harford County.
But in September, Supervalu Inc., a Minnesota-based food wholesaler, won that site in a state-assisted relocation.
Soon afterward, McCormick started looking for a place to have a developer build a new facility.
It quickly became clear that Pennsylvania would have sites well within a 50-mile radius of Hunt Valley, the distance the company set as a limit on trucking between its plants and the warehouse, said Alan D. Wilson, the McCormick vice president for procurement, who heads the project.
By late fall, at least two Pennsylvania towns were working on incentive packages with state officials.
"While we were still in the transition process, Dutch Ruppersberger called me up and said, in effect, 'Help, Pennsylvania is out to get this McCormick facility,' " the governor said.
"That same afternoon, I called up Mr. Blattman and asked him to hang on until Jan. 18, the inauguration, until we could get our team to work on it," he said.
Mr. Blattman, impressed that the governor-elect had taken the initiative without waiting for the change of administrations, said yesterday that he agreed right away.
When the Glendening administration put its package before McCormick's Mr. Wilson, state officials began to hope they could succeed.
"You can get a sense of how seriously your proposal is regarded by the questions they ask, and Alan wanted to know things like how the financing would work, how long the application process would take -- all the things that suggest they are interested in your offer," said James Fielder, the state's deputy secretary of economic development.
By Thursday night, when Mr. Wilson set two Maryland sites and one in Pennsylvania before McCormick's executive committee, the choice was between the two Maryland contenders -- Riverside in Harford County and White Marsh in Baltimore County, Mr. Blattman said.
In the end, the tipping factor was that the land in Harford County would be "substantially cheaper" than the land in Baltimore County, Mr. Blattman said.