With $9.5M Loan, Bechtel Stays In Frederick

By Washington Business Journal

Bechtel Power Corp. will maintain the companyâ¿¿s operations and 1,250 jobs in Frederick, Md., through at least 2018, the result of a $9.5 million conditional loan from Marylandâ¿¿s Sunny Day economic development fund, state officials have announced.

The deal, approved by Marylandâ¿¿s Legislative Policy Committee, may mean that Bechtelâ¿¿s scouring of Northern Virginiaâ¿¿s office space is over. It also may not, as Bechtel has 2,000 workers in Frederick and has promised to keep only 1,250 there.

⿿Our most important priority continues to be creating and retaining jobs ⿿ the kinds of high-wage, highly-skilled jobs that will sustain Maryland⿿s economy for today and for decades to come,⿝ Gov. Martin O⿿Malley, a Democrat, said in a news release. ⿿Working with Bechtel⿿s leadership to retain their operations here, we are preserving 1,250 jobs and ensuring that this innovative company continues to call Maryland home.⿝

Calls to O'Malley's office were referred to the state's Department of Business and Economic Development. According to a DBED memo, Bechtel has agreed to pay their 1,250 full-time employees at least 150 percent the federal minimum wage. The average salary for the power division is $125,000.

The conditional loan is in two parts. The first $2 million will mature on March 31, 2019. If Bechtel fails to meet the 1,250 employment mark, it will owe the state $1,600 plus accrued interest for each position it falls shy.

The remaining $7.5 million will be disbursed over the next seven years, at roughly $1.1 million annually. That loan will be reduced by $857 for each employee short of the 1,250 employment target. Bechtel also will have to repay the state, during the retention period, $857 plus interest for each employee short of 1,250.

Bechtel spokeswoman Michelle Michael said the company is still studying its options for the rest of the employees and company functions now based in Frederick, including its government services and operations divisions. Michael said Bechtel Corp. separated those functions from its decision to keep its Power Corp. division in Frederick. She declined to discuss the alternatives for the rest of its operations there.

"The company is still trying to determine the location for those operations," she said.

Leases for a portion of Bechtel⿿s 450,000-square-foot Frederick campus were coming to an end, giving the engineering and building contractor an ⿿opportunity to assess the best location or locations for our business,⿝ Michael told the Washington Business Journal in July.

Bechtel, which is constructing the Dulles Metro extension, enlisted CB Richard Ellis to search for new office space. In the end, Maryland came up with the money to keep much of the company where it is today.

⿿We are pleased to retain our Power business in Frederick,⿝ Bechtel CEO Bill Dudley said in a statement. ⿿We first moved to Frederick in 1999 and have found it to be a welcome community to locate our Power business⿿ headquarters.⿝

Staff reporter Daniel J. Sernovitz contributed to this story.

Copyright 2011 American City Business Journals

http://www.bizjournals.com/washington/news/2011/10/21/with-95m-loan-bechtel-stays-in.html?ana=thestreet

Copyright bizjournals.com 2010

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