Marriott to move headquarters to downtown bethesda with $62 million in incentives – the washington post electricity lab activities

For Marriott, now the largest hotel company in the world, the deal marks the second publicly funded incentive package the $17.3 billion firm has received from the state and county in less than 20 years, likely reigniting a debate over how far elected leaders ought to go to chase corporate employers.

The company’s plan to move 3,500 employees to a new complex near the Bethesda Metro station by 2022 follows the lead of other corporate moves out of sprawling office parks to more urban locations, but it could put new strains on public infrastructure such as Metro’s troubled Red Line.

“This was not a kind of corporate entity that I was prepared to lose, and the county could afford to lose, because this is an international brand that is irreplaceable in terms of what it does for jobs, and for the reputation and the prestige of the county,” he said in an interview.

Twenty years ago, the company’s current location, near the intersection of Interstate 270 and the Capital Beltway, was considered a gem. In 1999 the state and county offered up about $43 million to Marriott and fast-tracked road improvements in exchange for Marriott’s commitment to stay put at its current location and add 700 jobs.

Around the same time, Sorenson also sent administration officials scrambling when he sharply criticized Hogan for not signing legislation to tax online competitors, according to documents obtained through a Freedom of Information Act request.

After Hogan vetoed a bill requiring online booking companies such as Expedia to collect sales tax last in May of last year, Sorenson wrote to Hogan’s secretary of commerce and former campaign manager that he was “so deeply disappointed” in the decision that Sorenson — a Midwesterner praised for his cool demeanor — delayed writing because: “I worried my remarks would be too intemperate without a cooling down period.”

“That decision is, in our view, bad policy, contrary to what we understood to be the Governor’s position and only superficially explained,” he wrote. Hogan stood firm on the tax issue (though the legislature overrode his veto), and a few months later another Marriott representative, Jim Young, emailed Maryland Secretary of Commerce Mike Gill, asking for examples of headquarters incentives he could use in a presentation to the company’s executive chairman J.W. “Bill” Marriott Jr.

Marriott was considered a plum, especially after its acquisition last month of Starwood International, raising the prospect it might bring jobs from Starwood’s Connecticut headquarters. The deal combines the Marriott, Courtyard and Ritz Carlton brands with Starwood’s Sheraton, Westin, W and St. Regis lines.

Officials in D.C. and Virginia discussed a pursuit of Marriott, but it’s unclear how aggressively they pushed. Leaders in both jurisdictions remained wary about chasing a company they viewed as likely to remain in Maryland, according to officials familiar with the process were not authorized to discuss it.

Economic researchers increasingly advise against elected leaders poaching jobs from one another, which creates little overall economic growth for the region. A Brookings Institution report on the Washington economy last year showed that regional growth has slowed in part due to an overemphasis on competition for existing jobs.

But Maryland and particularly Montgomery County political leaders have been often criticized in the past for not being aggressive enough in pursuing such deals. The county just passed its biggest tax hike in seven years and is reeling from a persistent slowdown in commercial development that has afflicted other suburban areas plagued by traffic and poor public transit options.

The $62 million incentive package Maryland leaders eventually offered includes $44 million in grants to be divided by the state and county plus $18 million in tax benefits, two-thirds of which would come from the county. Some of the tax benefits stem from pre-existing legislation aimed at spurring economic development.

Marriott’s decision sounds the gun for the competition among some of the region’s top developers — including Carr Properties and Boston Properties — who have pitched plans to tear down dated office and retail plazas with immediate access to the Bethesda Metro, according to executives who were not authorized to discuss the plans publicly. Any of the locations would likely bring thousands of new riders to the Bethesda Metro, which could relieve some of the county’s congested roads but further strain an already faltering Red Line, the oldest in the system.

When Marriott departs its current offices the county will be saddled with a complex that — despite the millions in improvements it received for Marriott in 1999 — has become a poster child for increasingly vacant suburban office parks. The Rock Spring center’s prospects are so bleak that county planners recently proposed ideas for preventing it from becoming a ghost town, further draining the county tax coffers.

“They are going to have built a 700,000-square-foot building, which means 3,000 construction jobs. They are going to make Bethesda one of the leading commercial centers in the entire region. And we get a return on our investment,” Berliner said.