Plus $42 million tax dollars
The $42 million in tax funds former Gov. Ed Rendell wanted to pass along to the sinking Aker Philadelphia shipyard required relaxation of previous agreements made by the shipbuilder, according to meeting minutes from the Philadelphia Authority for Industrial Development (PAID).
The shipbuilder was relieved of its employment obligations and liens held by PAID in a last ditch attempt to rescue the struggling company that received $429 million from city, state and federal taxpayers in 1998 to embark on reviving an industry that had been virtually dormant for decades.
Under agreements approved by the PAID board on Dec. 21, Aker was released from “certain employment obligations…of the master agreement (from 1998).”
Employment agreements at the time required the use of women and minority owned business and a minimum work force of 1,000 – a figure that was rarely reached over the past 12 years.
Aker Philadelphia was also relieved of any prior liens PAID or its parent, the Philadelphia Industrial Development Corporation (PIDC), had on equipment at the shipyard on the Delaware River, in return for accepting the $42 million in tax dollars proposed by Mr. Rendell.
Aker contends that unless it receives orders for new ships, it will close operations by June.
The company has built 16 ships during its tenure at the former Philadelphia Naval Yard, but has no orders going forward. Those ships represent half the number of ships built in the United States in the last decade.
The PAID minutes reflect an expectation by its board that if Aker can build one or two ships on speculation, that activity would “…enable (Aker) to obtain orders for future ships, stabilize the shipyard and maximize employment.”
In the same document, it is stated Aker has told PAID and PIDC “the current global economic climate and lack of investment will result in decrease (sic) in employment and ultimate close (sic) of operations at the shipyard expected (sic) second quarter of 2011 without such investment.”
Attempts to reach PAID officials were unsuccessful.
A spokesperson for the Office of the Budget of new Gov. Tom Corbett said she would attempt to determine if the $42 million proposed by Mr. Rendell had been finalized. Mr. Corbett took office on Jan. 18.
