Asimi Picks Butte Over Spokane For New Plant Local Job Recruiter Blames Inability To Offer Incentives For Loss Of Project

The legal inability to offer tax-increment financing has cost Spokane a high-tech manufacturing plant that would have spent up to $500 million in construction and brought almost 300 jobs into the local economy, officials say.

“We’re real upset that we are losing this many good jobs,” Bob Cooper, president of the Spokane Area Economic Development Council, said Thursday. “This is a company that would have preferred to stay in the state of Washington. They said it many times over.”

Advanced Silicon Materials Inc. (ASiMI), located in Moses Lake, produces silicon used in the manufacture of computer microchips. A subsidiary of the Japanese conglomerate Komatsu Ltd., the company decided several months ago to expand its manufacturing capacity.

ASiMI narrowed its list of expansion sites to Moses Lake, Spokane and Butte, Mont. Earlier this week, ASiMI selected Butte as its new location.

In a news release issued Wednesday, ASiMI said its project in Butte will be built in two phases, with operations of the first phase expected early in 1998.

The company will invest about $250 million in the first phase and will employ about 165 people when it is completed. Construction of the second phase is expected to begin in 1997, the company said. About 100 workers would be added with the second-phase start-up in 1999.

“Factors influencing the decision to locate in Butte include reliable and competitively priced electric power, available work force, tax-increment financing, and transportation of finished product to customers,” Lyle Warren, ASiMI’s chief executive officer, said in the release.

Company officials were unavailable for further comment Thursday.

EDC officials said the tax increment financing package offered ASiMI by Butte was worth $40 million.

Cooper explained that Montana, like Idaho and many other states, allows local government to pay for infrastructure improvements to a proposed building site as an incentive for companies to locate there.

The theory is that the future tax revenue produced by the new company will more than offset the up-front costs to local taxpayers in the long run.

“It’s an investment concept,” Cooper said. “Other states understand that. They know they get significant value out of this kind of project.”

But the practice is not legal in the state of Washington, and that was what tilted ASiMI to Butte, Cooper believes.

“When you have to go back to Japan and explain a $40 million difference in up-front costs between Butte and Spokane, well, I can’t blame them for the choice they made,” Cooper said.

The Washington restrictions amount to “a pretty archaic way of looking at things,” Cooper charged. “It’s shortsighted. We end up putting a lot of artificial barriers around ourselves because of some legal mumbo-jumbo.”

Cooper said a broad alliance of government agencies, utility companies, real estate brokers and others worked hard to offer a package to ASiMI that could overcome the Montana advantage.

“There was a tremendous effort by the whole community,” Cooper said.

But that effort ultimately failed.

“The only positive spin out of this is we can now go to the Legislature and offer this as an example of what happens when you are so short-sighted,” Cooper concluded.

, DataTimes