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Originally published July 12, 2013 at 8:51 PM | Page modified July 12, 2013 at 10:13 PM

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Washington, South Carolina take new steps to appeal to Boeing

Gov. Jay Inslee is pushing for a streamlined permitting process for a potential expansion of Boeing’s Everett plant. South Carolina officials are also continuing to maneuver to appeal to the aviation giant.

Seattle Times staff reporter

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Washington state and rival South Carolina each took new steps this week to appeal to Boeing as the company weighs where to assemble the 777X, an upgraded version of its popular 777.

Gov. Jay Inslee is pushing the state Department of Commerce to label the potential expansion of Boeing’s Everett plant a “Project of Statewide Significance,” a never-before-used designation that would allow for an expedited permitting process.

The expansion would enable the company to build the wings of the 777X in Everett, Inslee explained.

“I can’t imagine a project that has more significance to the entire State of Washington than the facilities necessary to design and fabricate the 777X and its component parts,” Inslee said in a Thursday news release that promised future moves — including potential economic incentives — to persuade Boeing to build here.

Later Thursday, city officials in North Charleston, S.C., approved a large tax break crafted to benefit the company.

The City Council simultaneously cut its top corporate rate for businesses with gross earnings of more than $250 million, from 10 to 5 percent, and created a new top rate of 0.1 percent for earnings above $7.5 billion.

In essence, the reduced rates are meant to limit Boeing’s annual payments to the city to about $1 million as the company ramps up operations.

The moves on opposite sides of the country, while not directly related, illustrate the continuing fight for Washington to secure Boeing operations generally and 777X production specifically.

Boeing has for years been transferring some jobs from Washington and establishing new operations in other places, especially North Charleston.

The first Boeing-designed airplane not built in Washington was flown in South Carolina in May 2012. Earlier this year, the company announced a new $1 billion investment in the state — in return for $120 million in tax incentives.

Washington has also for years sought to make itself as appealing to the company as possible. Most notably, the state in 2003 gave two decades of tax breaks worth more than $3 billion to land the Dreamliner assembly plant.

Boeing officials have said they haven’t decided much of anything about the 777X program. Industry analysts expect it to be launched this year, however.

A key question is where to assemble the plane’s big wing.

Scott Hamilton, an Issaquah-based analyst, said South Carolina clearly took the more dramatic action this week.

“The move by Inslee is a good first step, and it kind of makes you wonder where Gary Locke and Chris Gregoire were when they were governors,” said Hamilton, of Leeham.net.

“But it still doesn’t make Washington fully competitive.”

Hamilton suggested that Washington needs to enact major new economic incentives, as it has before to land other Boeing planes.

Alex Pietsch, the director of Inslee’s Office of Aerospace, said officials are considering new incentives. Pietsch said it’s not fair to compare only what happened this week.

“This is just our first step in this 777X process,” Pietsch said. “We’re continuing to look at other things that can be done to make sure we’re meeting the needs of the company.”

Boeing officials have called Everett an attractive site for the 777X, as the 777 itself is built there.

On Friday, company spokeswoman Sue Bradley said officials are “pleased that (Washington state officials) are taking some proactive steps to remain competitive for the 777X.”

But she noted, “when we go forward with a program, there are so many business decisions and strategic decisions that are in the mix.”

Pietsch said Washington state officials are working on a report to share with the company about state efforts to make doing business here more appealing.

“They haven’t given us any indication that this is exactly what they want,” Pietsch said, “but they have indicated that this is good work and we should continue to do it.”

The “Project of Statewide Significance” designation was created in 1997 but never used.

The Department of Commerce, which technically awards the label, is still working on revising the rules that govern it, said spokeswoman Penny Thomas.

Meanwhile this week, Pietsch said a nonprofit coalition called the Washington Aerospace Partnership has engaged two consultants to discuss economic competitiveness, Community Attributes and Revel consulting.

In addition to discussions about new economic incentives, Washington state’s plan includes transportation and port improvements, expanded engineering-degree programs and workforce training, according to an announcement made by Inslee in May.

“We cannot afford to lose the 777X — it is the future,” the plan says.

The Legislature approved more than $30 million in aerospace investments this year, according to the governor’s office.

More than $17.5 million of that went to engineering programs at state universities.

Information from The Seattle Times archives and The Associated Press is included in this report.

Brian M. Rosenthal: 206-464-3195 or brosenthal@seattletimes.com. On Twitter @brianmrosenthal

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