Colossal defense contractor Lockheed Martin is pressing Montgomery County officials for a tax break on a lodging facility at its Bethesda campus — a move that would cost the cash-strapped county almost half a million dollars each year.
And the company has the backing of County Executive Ike Leggett,
Lockheed’s Center for Leadership Excellence, which houses company workers undergoing training, would not be subject to the county’s hotel tax under legislation introduced by Leggett. The bill applies to all lodging facilities that are used exclusively by a company’s staff, contractors, vendors and “other invitees.”
The Lockheed facility is the only building in Montgomery County that meets that standard.
Supporters say the measure could attract more business to the wealthy suburb. But those opposed to the bill say county coffers would be $450,000 lighter without the tax money from the contractor.
“Lockheed Martin is worth billions of dollars to this county,” said Leggett spokesman Patrick Lacefield. “Not only do we have to promote economic development, we have to keep what we have.”
Between April and December of last year, the center brought 9,000 workers to the county and generated 6,000 spillover room nights in county hotels, according to Budget Director Joseph Beach. The facility has also created 175 new jobs, he said.
Still, others question why such a well-established business needs new tax incentives, particularly in the wake of filling a $1 billion budget gap.
“You simply cannot give away so much of our money when our citizens are suffering from furloughs, layoffs, hiring freezes and drastic cuts in services,” Fran Pollner, of Takoma Park, wrote County Council members. “This proposed tax break is unfair and unnecessary and deprives us of needed funds. Please reject it.”
A public hearing on the bill is scheduled for Sept. 21, when council members return from the election recess.
But some are already questioning the plan.
“I want to know how it’s going to impact the [hotel] industry in the area,” said Councilman Marc Elrich, D-at large. “They’re basically going to be drawing business from hotels that are really struggling. I don’t think we should do something just because it’s good for Lockheed.”
The bill mirrors a new state law that exempts similar facilities from a 6 percent sales tax.
Lockheed Martin officials did not return calls for comment. The defense company claims its operations had a total economic impact of $7.1 billion between 2007 and 2009 in the county.
