7E7 BID MAY GO UP NORTH.

Byline: Jim Skeen Staff Writer

PALMDALE - Palmdale officials are predicting the High Desert will be bypassed in favor of Washington state when Boeing announces, possibly as early as today, where the company intends to build its next jetliner.

Palmdale, one of at least two dozen communities vying for the project that could create 800 to 1,200 good-paying jobs, put together a package of incentives totaling about $99 million.

Palmdale officials expect, however, Boeing will keep the work in Washington state, its traditional center for airliner building for decades.

``We put together our best offer, not just for us, but for the state,'' Palmdale Mayor Jim Ledford said. ``We think they might stick around Washington.''

Boeing officials are likely to have a ``circle-the-wagons'' mentality after recent leadership changes and controversy involving a proposed air tanker deal with the Pentagon, Ledford said.

Palmdale officials said Washington state's incentives proposed for the 7E7 work total $3.2 billion in state tax credits over the next 20 years.

``There's no way we can fight that,'' said Danny Roberts, the assistant executive director of the city's redevelopment agency.

Roberts said he was disappointed California did not receive a stronger look from Boeing.

``In terms of having a facility ready to go and having a place to do flight testing without worrying about the weather conditions, we have everything they need here,'' Roberts said.

Palmdale's offer centered around its enterprise zone designation. Businesses in the zone can receive tax credits for equipment purchases and for hiring employees through a variety of state programs.

Based on an estimate of a $900 million investment, of which 60 percent is expected to be for machinery and equipment, the savings from state sales- and use-tax credits would total about $76 million. The hiring-tax credits would generate an additional $23 million.

Palmdale officials put forward Site 9, the former B-1B bomber assembly plant adjoining Air Force Plant 42, as a candidate for the 7E7 assembly site. The site is within city of Palmdale but is owned by Los Angeles World Airports, the city of Los Angeles' airports department.

Site 9, at Avenue P and 30th Street East, has more than 1.3 million square feet of manufacturing and office floor space. It was used by what was then Rockwell North American Aircraft, now part of Boeing, to build 100 B-1B bombers during the 1980s. Boeing sold the plant several years ago.

Recently, DreamWorks Pictures used one of Site 9's massive hangars as a soundstage for the filming of the Steven Spielberg movie ``The Terminal,'' starring Tom Hanks.

Boeing plans to build up to 3,000 7E7 jets over a 30-year period, starting in 2005. The program is expected to create 800 to 1,200 direct jobs and as many as 2,000 to 3,000 support jobs.

Boeing officials would not comment on the site selection. A spokesman states on the company's Web site:

``Boeing intends to build the 7E7 in a location that gives it the best opportunity to be successful. Boeing's top priority is to ensure a fair and rigorous process that results in the right decision for the 7E7 program.''

Other states whose officials have publicly disclosed interest in pursuing the 7E7 production include Washington, Indiana, South Carolina, Ohio, Georgia, Arizona, Kansas, Texas and Wisconsin.

The 7E7 is Boeing's attempt to bring big-jet ranges to mid-size airplanes. The 7E7 is being designed to carry 200 to 250 airline passengers on trips of 7,200 miles.

Boeing projects that the aircraft would use 20 percent less fuel than other wide-body aircraft.

Production will begin in 2005. The first flight is expected in 2007, and delivery to the first airline customers is expected in 2008.

Jim Skeen, [phone]

james.skeen(at)dailynews.com