Monday, May 7, 2012

TOMORROW: Montgomery County Council Debates Leggett's Controversial Corporate Welfare Plans for Lockheed & COSTCO

PLUS: Del. Ana Sol Gutierrez & Kensington Residents Sound Off

CORPORATE WELFARE ON THE COUNCIL AGENDA: Tomorrow, the Montgomery County Council is taking up a package of budget items requested by County Executive Ike Leggett. Two readers flagged that at 10:20 am TOMORROW, the Councilmembers will be taking up items #62-63, labeled simply Economic Development and Economic Development Fund:

Notably, the two legislative items (#62-63) will include highly controversial uses of taxpayer funds:

1. LOCKHEED MARTIN: County Executive Ike Leggett and Economic Development Director Steve Silverman want to give the profitable multinational defense contractor a $900,000 tax refund -- in exchange for nothing at all. We previously chronicled the heated controversy over this corporate welfare plan. Below we also reveal new testimony from Delegate Ana Sol Gutierrez (D18) to the Councilmembers regarding the Lockheed welfare plan.

2. WHEATON COSTCO: County Executive Ike Leggett and Economic Development Director Steve Silverman want to give the worldwide shopping mall giant Westfield $4 million to build a COSTCO store at Wheaton Plaza (aka Westfield Wheaton). There have been numerous controversies surrounding this project. For starters, there are a number of people (myself included) who have no problem with COSTCO or Westfield per se, but are skeptical that MoCo needs to give either company millions of dollars to open a store. Maryland Politics Watch's Adam Pagnucco previously reported that Wheaton Plaza is among Westfield's most profitable malls in the nation:
MARYLAND POLITICS WATCH: Westfield Group is a giant retail owner and developer based in Australia. It owns properties in its home country, New Zealand, the U.K. and the U.S. In the first half of 2009, Westfield reported operational earnings before interest and tax of $1.446 billion, an increase of 18.1% from the prior year. Comparable shopping center net operating income actually grew by 3.0% despite the worldwide recession.
The conventional wisdom that Westfield Wheaton is an underperforming mall is untrue. In fact, Wheaton is one of Westfield’s most profitable malls in the U.S....  Westfield has successfully persuaded the Executive Branch to subsidize one of its most profitable assets....
How many small businesses in the Wheaton Central Business District (CBD) have a positive eight percent net profit rate or greater right now? Maybe zero. How many of them are getting four million dollars from the county? Definitely zero.

This would not be Westfield’s first subsidy. Westfield obtained a $6 million parking garage expenditure from Montgomery County for its Macy’s project in 2003, which was completed in 2005. The property also earned a $2.6 million property tax credit over ten years....
Silverman is now the county’s Director of Economic Development who is in charge of negotiating Westfield’s newest subsidy. If the last subsidy worked out so well five years ago, then why are we doing it again?

ENVIRONMENTAL IMPACT & PUBLIC HEALTH: In addition to the dubious corporate welfare payment to Westfield, many residents in the neighborhoods bordering Wheaton Plaza are adamantly opposed to a 16-bay gas station that COSTCO insists must come with its new Wheaton location. The gas station would apparently be the largest in Montgomery County, and would border homes and a neighborhood swimming pool. Residents of the nearby Kensington Heights Civic Association emailed Maryland Juice about this budget line-item:

Please see attached KHCA's response to Steve Silverman's April 19th memo to Leggett recommending an appropriation of millions to Westfield Group for the Costco Mall Addition development project in Wheaton.

The money is getting handed over tomorrow, Tuesday, please see details below.  The grant to Westfield is not mentioned by name anywhere in the analyst report, but Steve Silverman's memo is on page 23.


Danila, KHCA

After Del. Ana Sol Gutierrez's letter about Lockheed Martin below, Maryland Juice prints Economic Development Director Steve Silverman's letter to Ike Leggett recommending corporate welfare for Westfield. We also print the response of the Kensington Heights Civic Association to Mr. Silverman's letter.

NOTE: This may be your last chance to the contact the County Councilmembers about either issue:

Email All 9 Councilmembers & Steve Silverman using the address below:

Delegate Ana Sol Gutierrez Testimony to Montgomery County Council re: Lockheed Welfare Plan  
Steve Silverman Letter to County Council Re: Wheaton COSTCO  
KHCA Response to Steve Silverman Letter on Wheaton COSTCO

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