Government officials have promised the Boeing Co. that they’ll expedite construction of new carpool lanes on I-5 through Everett while also pushing ahead with widening a section of the Bothell-Everett Highway.
Those are two of the conditions state and local officials agreed to as part of the deal that convinced the Boeing Co. to assemble the 7E7 Dreamliner in Everett.
The broad outline of the deal was released in December after it was signed by Gov. Gary Locke, Boeing 7E7 program chief Mike Bair and representatives of various local governments and utilities.
But many of the details were not released until Tuesday, as lawyers for Boeing and the state negotiated over whether portions of the agreement could be "redacted" — or withheld from the public to prevent Boeing trade secrets from leaking out.
Those secrets "would be valuable to Boeing’s competitors," Boeing lawyers asserted in a letter included in the papers released Tuesday.
Kept secret was almost all information on the new school the state must build to train workers for Boeing and the companies that will help it build the new airplane.
However, the big-ticket items — including a 20-year tax break worth up to $3.2 billion and hundreds of millions in highway projects — are spelled out.
The deal notes that the Legislature already has approved $238 million for the improvements on I-5.
The deal will require the state to "expedite … to the maximum state feasible" the construction of new carpool lanes on I-5 north from where they now end, at Highway 526 — the Boeing freeway.
The state also will add auxiliary lanes — merge lanes for vehicles entering or exiting the freeway — between 41st Street and U.S. 2 on I-5 through Everett. The goal, the agreement says, is to eliminate the chokepoint at that spot, which now causes traffic to back up onto 526.
While that’s under way, the state also will continue widening Highway 527 — the Bothell-Everett Highway — to five lanes.
Workers have been adding a center turn lane to the highway where it passes Mill Creek. Under the 7E7 agreement, that will be extended from 132nd Street SE, where it now ends, north past Silver Lake to 112th Street SE. That work must be done by early 2006.
The agreement also allows Boeing to designate key intersections for new traffic signals. The streets and highways in southwest Everett should be capable of handling 35,000 Boeing workers — almost twice the number working there now, the deal says.
The documents are largely silent on the details of the new worker training center.
The previously released documents show that the state has six months to set up an Aerospace Futures Board to oversee the creation of a program to train workers specifically for 7E7 jobs.
The new documents show that the state will spend at least $10 million to buy or construct a building for the new training center.
They also identify up to $14.3 million that would be available to operate workforce development programs through June 2007, and specify that state and local governments will be responsible for operating and maintaining the center.
But all other information about the program was blacked out at Boeing’s request.
Boeing’s tax breaks are spelled out, however.
Boeing and other aerospace companies will see their state business and occupations tax rates drop from 0.484 percent to 0.4235 percent in October 2005. The rate will fall again, to 0.2904 percent in July 2007 or when final assembly of the 7E7 begins.
Boeing will be able to write off 1.5 percent of the amount it spends on research and development for the new airplane against its B&O taxes after 2005. It also will be able to write off up to $20 million in spending for new computer software and hardware.
Any computer software or equipment it buys primarily for use on the new airplane will be exempt from sales taxes. Boeing also won’t have to pay sales tax on the labor involved in construction any new buildings for the program, or for the installation of major equipment.
The agreement offers Boeing additional tax breaks if it ends up selling any of its property to the Port of Everett, then leasing it back.
If it did that, any new 7E7 buildings, machinery or equipment would be exempt from property taxes under the agreement.
If Boeing’s property taxes go up because of 7E7-releated improvements, the company will be able to claim the increase as a credit against its B&O tax bill, the agreement says.
Under the terms of the deal, Boeing must file annual reports detailing its employment, payroll and benefits with the state.
Analysts will use that information to assess whether the tax incentives are paying off by creating new jobs in Washington and new business for Boeing, and will recommend in 2010 and 2023 whether the tax breaks should be extended.
Reporter Bryan Corliss:
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