Seeking bigger and cheaper space to house its growing operations, aerospace firm Korry Electronics is moving its 600-plus workers in Seattle...

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Seeking bigger and cheaper space to house its growing operations, aerospace firm Korry Electronics is moving its 600-plus workers in Seattle to unincorporated Snohomish County, most likely in late 2009.

The decision, announced Thursday, came after talks with the Port of Seattle to build a new facility on Port property fell apart last week.

In the arrangement with Snohomish County and a private developer, Korry gets a much sweeter deal than the Port offered — about 47 cents per square foot annually, versus $2.30 to $2.50 per square foot annually, according to the Port of Seattle. The move also puts Korry near Paine Field, amid a cluster of other aerospace companies and close to major client Boeing.

“We appreciate their willingness to meet our needs,” said Korry President Dan McFeeley.

The county is leasing a 14-acre parcel on airport property to developer Capstone Partners, which will build a 250,000-square-foot building and lease that to Korry. Capstone will pay the county $289,000 a year for 55 years.

Construction is scheduled to begin in August, a county release said.

The deal “highlights for other companies that we’re ready to compete for their jobs,” County Executive Aaron Reardon said.

Korry’s migration also underscores how Seattle is becoming a costly place for manufacturing firms, and how difficult it is for local officials to make competitive offers.

The city would like to keep its manufacturing base. In 2004, the average annual wage for an industrial job amounted to $55,500, $8,300 more than the average job, said Karin Zaugg, spokeswoman for Seattle’s Office of Economic Development. The city says it has about 120,000 industrial jobs.

Most of the 238 manufacturing employees at Korry earned between $10 and $30 an hour, according to 2006 data it filed with the Department of Revenue data to qualify for the state’s aerospace tax break. That translates to between $20,800 and $62,400 per year.

“We are sad to see them leave Seattle, but we’re glad they’re staying in the region,” Zaugg said.

In a recent interview before the announcement of Korry’s move to Snohomish County, Port of Seattle CEO Tay Yoshitani said there was a “huge gap between what we think is a reasonable rent and an offer they apparently have.”

“I know the essence of their deal at another location, and it’s significantly more attractive than what we’ve been able to put on the table,” Yoshitani said, adding “I’d take issue with anybody who would suggest we did not try our darnedest to keep Korry in Seattle.”

Korry’s McFeely said before the Snohomish County announcement that the firm’s chief impediment to staying in Seattle was that “the city has just become a very expensive place to do business.”

“We are manufacturing in a very cost-competitive world and we need the rents of our buildings to be appropriately priced … Really, it isn’t anybody’s fault, the thing that’s driving us out is truly economics, economics on a large scale,” McFeely said.

He said the company is pondering “creative” transportation schemes to help its employees make the move.

Korry is a unit of Bellevue-based aerospace and defense supplier Esterline Technologies.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com