Bally's Health & Tennis Corp. served up an economic development victory for the Glendening administration yesterday, announcing plans to remain in Towson and add 130 jobs to its regional operations center there.
The Chicago-based fitness club operator's pledge to remain here rather than move several hundred jobs to Michigan came in exchange for a $1.7 million incentive package from the state and Baltimore County.
Bally's had threatened earlier this year to relocate 450 jobs to Michigan -- where it maintains the second of three operations centers nationwide -- as part of a corporate consolidation unless state economic development officials provided financial incentives to lower the company's costs.
"We didn't think it was a threat that could be ignored," said James T. Brady, secretary of the state's Department of Economic and Employment Development. "There was a case to be made that Michigan could meet their needs, and we felt we really needed to win this one."
As a result, the nation's largest health club chain is expected to close its Michigan operation and keep its offices in the 11-story Hampton Plaza office building, near the Towson Town Center.
Although jobs will be offered to its Michigan employees, the company expects most of the additional Towson workers to be hired locally.
Bally's is one of Towson's largest white-collar employers and has an annual payroll there of $13 million. With the addition of the new jobs, Bally's payroll will jump by $2 million a year, and the state and county income taxes paid by its workers will grow by more than $150,000 a year.
The company plans to use the state and county financial incentives to help purchase $3 million worth of new computer and telecommunications equipment and train both new and existing workers.
The bulk of the incentive package is in the form of a $1.5 million, low-interest loan from the state, which must be approved by the state General Assembly's legislative policy committee.
"Our decision was based on a combination of studying our current occupancy costs and costs of operating going forward," said David M. Tolmie, the company's vice president of planning and development. "It was very much an economic decision. They didn't give us all we asked for, but we think we worked out a fair proposal."
Both Mr. Brady and Baltimore County officials cited cooperation between the state and county, as well as the private sector's involvement, in keeping Bally's.
"Business and government must work together, and this is a case where the private sector really came through," said Baltimore County Executive C. A. Dutch Ruppersberger. "We couldn't have done this without [Hampton Plaza owner] Willard Hackerman. He really helped move the deal along."
Mr. Hackerman, who also is president of Whiting-Turner Contracting Co., could not be reached for comment.
Bally's, a $600 million unit of casino and hotel owner Bally Entertainment Corp., operates 340 health clubs nationwide in 27 states and employs more than 17,400.
Its Towson operation, which includes data entry, collections and information services, dates to 1989, when the company bought an interest in the former U. S. Health Corp. for $55 million.
Bally's represents the second major business retention by the Glendening administration since taking office earlier this year. In February, the state beat Pennsylvania in a contest for a McCormick & Co. distribution center employing 150, by providing a package valued at $20 million. By comparison, McCormick's package contained $5 million in grants and similar aid and $15 million through a low-interest loan.
The state's financial muscle hasn't always meant the difference in keeping companies in Maryland, however.
Last week, Campbell Soup Co. announced that it would shutter a Chestertown plant and eliminate 240 workers as part of a corporate consolidation.
And Campbell's plans came on the heels of an economic development defeat for Mr. Glendening in the General Assembly, when lawmakers refused to repeal a tax on snack foods.
But even as they celebrated the Bally's victory, state economic development leaders warned that there were limits to the state's generosity in doling out financial incentives.
"We're fully prepared to tell some companies that we simply can't do what they're asking," Mr. Brady said.